…As NECA says Budget Delayed passage threatens foreign investment***
The President of Dangote Group, Alhaji Aliko Dangote, has
said premium motor spirit (PMS) or petrol that will be refined from Dangote
Refinery will not be sold at Federal Government’s regulated price.
This ends the speculation about how much the pump price
petrol from the first private refinery will attract when it begins operation
next year.
Dangote spoke on the sidelines of the visit of Central Bank
Governor Godwin Emefiele to the refinery in Lagos.
Dangote said though the plan is not to concentrate on export
entirely, he noted that petroleum products from the refinery will be sold at
export rate.
He said it is the duty of the Federal Government to
determine the price of fuel, adding that he doubts whether fuel subsidy will
continue but if it does, the government can engage the company to find a
mid-ground on how to tackle the issue of subsidy.
He said: “We are not here to concentrate on export but
pricing of products depends entirely on the government. If there will be
subsidy, which I doubt very much, that is the job of government not the job of
Dangote to determine what the price will be. But price of our export is what we
sell, which will depend on what the market is internationally, and locally if
there will subsidy, the government will carry that responsibility and not us.
Government has to engage us and see how they can find a mid-ground on that.”
On job creation, Dangote said the refinery and petrochemical
project is transformational. Considering that Nigeria depends on importation
to meet its fuel consumption needs and the attendant huge subsidy to keep pump
price at regulated price of N145 per litre, he said the project will create
massive jobs.
According to him, most filling stations don’t sell fuel
because of lack of fuel in view of issues around importation, adding that when
the refinery begins operation, it will put these filling stations and their
workers back to work.
He said: “Currently, more than 26,000 people are working on
the project and at the height of the project, the number of workers will soar
to about 80,000 people and there will be more than 50,000 workers living
internally in the company.”
Emefiele promised the apex bank’s assistance to other
refineries’ licencees whose banks can vouch for their credit worthiness.
Emefiele said: “CBN’s support depends on the company’s
capacity. I have not seen any other person that has received government licence
to set up a refinery. In any case, you don’t come directly to CBN, you
have to go through your bank and your bank has to assess your capacity to be
able to take on the project.
“My suggestion is that if there are people that have
interest in CBN’s support, they should go to their banks and if their banks are
able to display their credit worthiness to be able access such facility, CBN is
ready to support them in naira and dollar that they need to import equipment
that will enable them conduct their businesses.
“I have not seen any, if I see any through their banks, I
can assure they will receive this kind of support Dangote got from CBN.”
The CBN supported Dangote Refinery, which will cost $9
billion (N75 billion) and the fertiliser plant which will cost $2 billion with
N50 billion. The apex bank chief also stated that the refinery and
petrochemical project is funded by 60 per cent of Dangote’s equity with the
remaining 40 per cent funded by debts from local and foreign banks and CBN’s
support.
In the meantime, the Nigeria Employers’ Consultative
Association has decried the recurring delay in the passage of the national
budget, saying this does not help economic growth and threatens foreign direct
investment.
This was contained in a statement made available to our
correspondent on Sunday.
NECA, while decrying the development, said the trend was
already becoming a culture.
It noted that since 2014, the earliest time the budget was
passed was in 2016, and it was in March of that year.
President Muhammadu Buhari presented a budget proposal of
N8.83tn for 2019 to the National Assembly on December 19, 2018.
The 2019 total budget estimate is N300bn lower than the
N9.1bn budget of the preceding year.
The President said N4.04tn or 50.31 per cent was earmarked
for recurrent expenditure and N2.03tn, representing 22.98 per cent, earmarked
for capital projects.
Other estimates are N492.36bn for statutory transfers;
N2.14tn for debt servicing and provision of N120bn as a sinking fund. Since
then, there seems to be nothing concrete to have been heard concerning
the budget.
However, the Director General of NECA, Mr Timothy Olawale,
described as disheartening the continuous delay in the passage of the national
budget, arguing that some other African countries had moved beyond such level.
He added that if truly the country wanted to move onto the
track of economic prosperity as soon as possible, then it needed to accord
extreme importance to the early passage of the budget.
While he said there had to be a defined time frame, which should
be religiously followed as seen in other countries, Olawale advised the
executive and legislative arms of the government to shelve the cold war between
them in the interest of the nation and work on the budget.
He said, “The continuous delay in budget passage year on
year is worrisome and continues to be a major source of concern for the private
sector. The importance of quick passage of the budget cannot be over-emphasised
as it plays a very critical role in economic development.
“Looking at the trend from 2014, the earliest time the
budget was passed was in 2016 and that was in the month of March. Nigeria’s
fiscal year begins in January and ends in December; hence, we cannot begin to
imagine the dire consequences of the late passage of the budget on national
development and business growth.
“In Ghana, for instance, the budget for the 2019 fiscal year
was approved in November 2018. In Ethiopia, the budget for the 2018-2019 fiscal
year was approved few days before the commencement of the fiscal year in July
2018. Similarly, in Egypt, the budget for their 2018-2019 fiscal year was
approved about a month to the commencement of the fiscal year.
“The stability and predictability of the budgetary process
of these countries could be one of the reasons why they are becoming the new
desired destination for foreign investments.
“For some years now, the process leading to the approval and
passing of budget in Nigeria has always been a victim of the proverbial
fighting of two elephants. A critical component of the budget such as the
capital expenditure, which, to a large extent, plays a major role in economic
development, suffers. Infrastructural reforms, which are meant to attract
investments and improve the lives of the populace, are put on hold and business
decisions, which could translate to expansion and employment generation,
frustrated.”
While advising on the way out, Olawale stated, “If we truly want to get the country on the track of economic prosperity as soon as possible, we need to accord extreme importance to the early passage of the budget. There has to be a defined time frame, which should be religiously followed as seen in other countries. We also urge our lawmakers to give the 2019 budget the utmost importance it requires as budget passage should not suffer at the expense of politics.”
The Nation with additional report from Punch
