- As Buhari seeks N’Assembly’s approval for $29.96bn loan to curb recession
Singapore-based Samudera Shipping Line has recorded a drop of 17.2% in revenue from the container shipping business in the aftermath of Hanjin Shipping’s filing for court receivership in late August.
On the back of prevailing pressure on freight rates and a 2.1% decrease in volume handled to 273,000 TEUs, largely due to the loss of volume after Hanjin ceased operation, revenue from the container shipping business declined to USD 52.1 million in the third quarter of 2016 from USD 63 million recorded in the same period a year earlier.
The company’s bulk and tanker division operated a smaller fleet during the quarter following the disposal of four tankers since December 2015. This, along with the
scheduled dry-docking of tanker and lower charter-out rates for the group’s vessels, led to a 29.3% plunge in revenue from the bulk and tanker business to USD 7.7 million in the third quarter, against USD 11 million seen in the three-month period a year ago.
Samudera Shipping Line cooperated with Hanjin on slot exchange arrangements for various services in the region.
Following Hanjin’s receivership, the group said that it is engaged in ensuring “the continuity and reliability of its service routes” as it is looking for replacement cargo on the affected sectors.
In the meantime, President Muhammadu Buhari has asked the National Assembly to approve his administration’s external borrowing plan of $29.96bn for the execution of key programmes and infrastructural projects across the country.
The sum, if approved, will be spent on projects in this year’s budget and up till 2018.
The President also sought legislative approval for virements totalling N180.8bn in the 2016 budget to cater for votes by some sectors of the economy.
Buhari made the requests in two separate letters to both the Senate President, Bukola Saraki; and Speaker of the House of Representatives, Yakubu Dogara, which were read to lawmakers in both chambers of the National Assembly during Tuesday’s plenary.
The President, in the external borrowing plan, said the fund would be spent on the provision of infrastructure in agriculture, health, education, water supply, growth and employment generation, and poverty reduction through social safety net programmes, among others.
“The total cost of the projects and programmes under the borrowing (rolling) plan is $29.960bn, made up of proposed projects and programmes’ loan of $11.274bn; special national infrastructure projects, $10.686bn; Eurobonds, $4.5bn; and Federal Government budget support, $3.5bn,” Buhari stated.
The President explained that the loan became necessary due to the serious infrastructural deficit the country was facing.
“Considering the huge infrastructure deficit currently being experienced in the country and the enormous financial resources required to fill the gap in the face of dwindling resources, and the inability of our annual budgetary provisions to bridge the deficit, it has become necessary to resort to prudent external borrowing to bridge the financing gap, which will largely be applied to key infrastructure projects, namely power, railway and roads projects, among others,” he stated.
In the N180bn virement request, the President noted that it would involve the transfer of the money already appropriated for special intervention programmes, both recurrent and capital, to critical recurrent and capital items.
According to him, the request becomes necessary due to a number of reasons, including shortfalls in provisions for personnel costs, inadequate provision for the Amnesty Programme, continued requirements to sustain the war against insurgency, and the depreciation of the naira.
The President’s letter on the subject read in part, “In the course of implementing the 2016 Appropriation Act, several MDAs have presented issues pertaining to salary shortfalls, the settlement of part of which has led to the depletion of the public service wage adjustment. This vote, which had a provision of N33,597,400,000, now has a balance of N2,758,296,000.
“The Committee on Salary Shortfalls, set up by the Minister of Finance, has come up with a figure of N41,875,983,020 as the amount required to settle salary shortfalls of non-lPPlS MDAs. Similarly, most of the lPPlS (Integrated Payroll and Personnel Information System) MDAs have already been notified by the Office of the Accountant-General of the Federation that they would soon be locked out of the IPPIS platform, as their personnel cost budgets would not cover salaries for the rest of the year.
“The contingency vote of N12bn has a balance of only N1,827,570,443. It is considered necessary to augment this vote in the light of frequently emerging contingencies. Only N20,000,000,000 (already fully released) was provided in the 2016 budget for the Niger Delta Amnesty Programme. Consequently, the allowances to ex-militants have only been paid up to May 2016. This is creating a lot of restiveness and compounding the security challenge in the Niger Delta.”
It added, “The provision for the NYSC (National Youth Service Corps) in the 2016 budget is inadequate to cater for the number of corps members to be mobilised this year. In fact, an additional N8.5bn is required to cover the backlog of 129,469 corps members who are currently due for call-up but would otherwise be left out till next year due to funding constraints. Similarly, the provision for meal subsidy for the Unity Colleges is inadequate for the number of students in the schools.”
A breakdown of the virement proposal showed that N71.8bn is for public service wage adjustment; N35bn for the Amnesty Programme; N19.8bn for the mobilisation of remaining batches of youth corps members for the year, among others.
The President added, “You may also wish to be informed that the Federal Ministry of Power, Works and Housing has also requested for the virement of the sum of N300m appropriated under the 2016 appropriation of the Transmission Company of Nigeria for the construction of the 132KVA substation at Gwaram, Jigawa State, with Project Code No. TCN 018023829, and the construction of two units of 60MVA 132/33 in Gagarawa, Jigawa State.
“However, it was observed that while the line to be vired from exists in the budget book published by National Assembly, the lines to be vired to do not exist. It is, therefore, recommended that the sum of N300m meant for the construction of the 132KVA substation at Gwaram, Jigawa State be vired to budget line TCN 018021775 for the reconstruction of fallen transmission towers and replacement of glass insulators, etc., which have an appropriation of N4,880,000,000.”
World Maritime News with additional report from Punch
