…IMF warns, puts global debt at $180trn***

A new order which could effectively ignite the yearly Yuletide fuel scarcity was unfolded Sunday as Oil marketers in Lagos served the Federal Government a seven-day ultimatum to settle outstanding debts totalling N800 billion, or face total fuel depots closed down.

The marketers, comprising Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and Independent Petroleum Products Importers (IPPIs), said failure to meet the deadline would force its members to disengage workers from depots, and tactically close operation nationwide.

Confirming the seven-day notice, Mr Patrick Etim, Legal Adviser to IPPI who told newsmen that banks have taken over the investments and assets of oil marketers over unpaid debts; and marketers no longer retain any chcice than to ask their workers to stay at home over unpaid salary arrears due to huge subsidy debts, owed by the government.

“The only way to salvage the situation is for government to pay the oil marketers the outstanding debts through cash option instead of promissory note being proposed.

“As I speak, nothing has been done several months after assurances received by government saying it would pay off the outstanding debts.
“The oil marketers have requested that forex differential and interest component of government’s indebtedness to marketers be calculated up to December 2018 and be paid within next seven days from the date of the letter sent to the government,’’ he said.

Etim said that several thousand jobs were on the line in the industry, as oil marketers began cut-down of their workforce due to inability to pay salaries.

“At the inception of the current administration, marketers engaged the government with the view to secure approval for all outstanding subsidy-induced debts handed over to the current administration,’’ he said.

The counsel said that the current administration paid part of the debts with a substantial portion of the subsidy interest and foreign exchange differential still pending.

The Executive Secretary of DAPPMA, Mr Olufemi Adewole, also confirmed the seven-day ultimatum notice.

Adewole disclosed that the oil marketers on Nov. 28 served the ultimatum letter on the Debt Management Office (DMO), Minister of Finance, Chairman, Senate Committee on Petroleum Downstream, Department of State Services and Minister of State, Petroleum Resources.

“We urge the DMO to process and pay marketers in cash for their outstanding forex differentials and interest component claims, together with the amount already approved by the Federal Executive Council (FEC) and the National Assembly.

“Marketers are not in a position to discount payment on the subsidy-induced debt owed as proposed by DMO.

“The expected payment is made up of bank loans, outstanding admin charges due to PPPRA, outstanding bridging fund due Petroleum Equalisation Fund (Management) Board and in a few cases AMCON judgment debts.

“We urge that the Federal Executive Council (FEC) approved payment instrument, (the promissory note) be substituted with cash and paid through our bankers to stop the avoidable waste of public funds through these debts accruing interest,’’ he said.

DAPPMA also urged government institutions involved in resolving the lingering problem to appreciate the situation marketers faced and expedite payment of the debts in full without further delay.

It would be easily recalled that successive governments, including the present Muhammadu Buhari led Federal Government have annually thrown Nigerians into avoidable fuel scarcity, disrupting travellings at Christmas, except for those willing to pay as much as N400 per litre to black marketers.

It was particularly saddening last year, as the Group Managing Director, Dr. Maikanti Baru had assured Nigerians that there would be no Christmas fuel scarcity in 2017, because the NNPC had successfully stockpiled fuel as early as October 2017, in preparation for a most comfortable season’s celebration.

The pledge bounced and Nigerians bought fuel for even as high as N500 in Lagos from black marketers while government doled out various excuses.

Meanwhile the International Monetary Fund (IMF) has put the global debt at $180 trillion, warning highly indebted emerging-markets and low-income countries against what it termed pro-cyclical fiscal policies.

The body specifically, recently warned Nigeria against bending backwards to incure debts.

IMF Managing Director, Christine Lagarde, in a statement issued at the conclusion of the Group of 20 (G-20) Summit in Buenos Aires, called for collaborative action by G-20 leaders as global growth moderates and risks increased.

Lagarde emphasised that global growth remained strong, but that it was moderating and becoming more uneven.

She said pressures on emerging markets had been rising and trade tensions have begun to have a negative impact, increasing downside risks.

“Another urgent issue is the excessive level of global debt – about $182 trillion by the IMF’s estimate.

“It is important, particularly for highly indebted emerging-market and low-income countries, to rebuild buffers and reverse pro-cyclical fiscal policies.

“Increasing debt transparency, such as on the volumes and terms of loans, by borrowers as well as lenders, is as important as supporting debt sustainability,’’ Lagarde said.

According to her, choosing the right policy is, therefore, critical for individual economies, the global economy, and for people everywhere.

“The choice is especially stark regarding trade.

“We estimate that if recently raised and threatened tariffs were to remain in place and announced tariffs were implemented, about three-quarters of one per cent of global GDP could be lost by 2020.

“If instead, trade restrictions in services were reduced by 15 per cent, global GDP could be higher by one-half of one per cent.

“The choice is clear: there is an urgent need to de-escalate trade tensions, reverse recent tariff increases, and modernise the rules-based multilateral trade system.’’

To meet the challenges facing the global economy, the IMF chief made several policy recommendations to the G-20 leaders.

“First, fix trade – this is priority number one to boost growth and jobs.

“Continue to normalise monetary policy in a well-communicated, gradual, data-driven manner and with due regard to potential spill-over effects.

“Address financial risks, using micro and macro-prudential tools to tackle problems related to the leveraged ending, deteriorating credit quality and high exposure to foreign currency or foreign-owned debt.

“Use exchange rate flexibility to mitigate external pressures, avoiding tariffs and other policies that could weaken market confidence.

“Finally, eliminate legal obstacles to the participation of women in the economy which is key to tackling high and persistent inequality and would add to the growth potential of all G-20 countries,’’ Lagarde said.

She said she was encouraged by the G-20’s continued commitment to strengthening the global financial safety net, with a strong and adequately financed IMF at its centre.

“It is important that the G-20 leaders have pledged to conclude the 15th General Review of Quotas by our Spring Meetings and no later than the Annual Meetings in 2019.’’