Gas Oil

Non-oil budgeting sustainable despite challenges’

In the wake of the country’s dwindling foreign earnings occasioned by continuous fall in the global crude oil price, economic stakeholders have stated that non-oil budgeting is sustainable despite its challenges.

They said the pandemic has offered Nigeria the opportunity to plan the country’s budget without putting oil revenue into consideration as long as the government priortises diversification.

Prof. Akpan Hogan Ekpo, Department of Economics, University of Uyo, who spoke to The Nation in an exclusive interview, noted that  budgeting without oil revenue can be achieved by providing the basic needs of life such as health, education, housing, food, shelter, jobs, and security to at least 85 per cent of Nigerians.

Akpan said; “It is not entirely correct to say that oil cannot grow the economy. It can but it depends on how and what the oil revenue is used for. In the short and medium terms, oil as a non-renewable asset, the revenue so derived can be targeted at hard and soft infrastructure.

Investment in hard infrastructure like power, roads, rails, etc and soft infrastructure (education and health) would enhance growth.

“If crude oil is refined in Nigeria and exported, the economy would earn foreign exchange. The oil sector could provides inputs for the chemical, pharmaceutical and agricultural sub-sectors and the resultant backward and forward linkages would grow the economy, generate jobs and provide revenue for government.

“For Nigeria, the oil revenue is perceived as permanent and hence every activity in the economy is dependent on revenue earned from crude oil export. The revenue from oil is exogenous; Nigeria has no control over its price and quantity. It is the vulnerability, uncertainty and price and output fluctuations that pose huge challenges for the country.”

He pointed out that it is unhealthy to finance development from an exogenous source of revenue with the features so described, stressing that the present covid-19 pandemic and the collapse in oil prices (twin challenge) has driven the economy into deep recession.

The Professor of economics maintained that economic diversification is the way out of the present economic quagmire, adding that diversification largely depends on the strategy of government and its economic development philosophy.

The National Chairman of Non-metallic Mining Group of Manufacturers Association of Nigeria (MAN) Mr. Afam Mallinso Ukatu, stated that most countries have survived without oil and are doing well, saying that Nigeria can fund its budget adequately through mining and agriculture if only infrastructure is put in place.

Ukatu noted that the current pandemic is an opportunity for Nigeria to leverage and change its narratives by diversifying into other forms of investment opportunities available in the 744 Local Government Areas of the country.

“The money doled out for SMEs is not getting to them because of bureaucracies involved and documentations that may not be easy for them to provide early enough.

“The opportunities in mining cannot be ruled out, but the necessary infrastructure should be put together, so that agriculture and mining could take their right position.  This is because all the agricultural produce gets bad within three days, even before they get to the market. But if there is constant power supply, a lot of interested investors would invest in the value chain processing and jobs would created, while wastages would be minimised and the overall GDP would be enhanced. By this, there would be conservation of scarce forex earnings, which will also lead not only to food sufficiency but also to food export,” he stressed.

Ukatu expressed that boosting agriculture; mining and other non-oil sector should be the government’s priority now, adding that it can conveniently fund the nation’s budget without considering oil earnings.

N17bn contract debt for inclusion in budget

The Federal Government is to include the about N17bn debt owed contractors of the Federal Ministry of Agriculture and Rural Development in the 2020 revised budget that is currently before the National Assembly.

It was learnt that the move by the government was aimed at halting the continued picketing of the ministry by about 50 members of the Concerned Unpaid 2018 Contractors of the ministry.

For about two weeks, aggrieved contractors of the ministry had continued to stage protest at the ministry, a development that had hampered activities at the ministry.

It was gathered on Sunday that the National Assembly had to wade into the matter, as it urged contractors to stop the picketing based on the fact that their monies were now captured in the amended 2020 budget.

On May 21, 2020, The PUNCH reported that contractors of the ministry stormed its Abuja head office to demand the payment of their money.

They blocked the major entrance to the minister’s office and also prevented the permanent secretary from entering his own office.

Efforts by security officers and other personnel at the ministry to pacify the angry protesters were futile as the protests continued for several days.

The contractors insisted that they must get their payments for the contracts executed since 2018.

However, the coordinator of the aggrieved contractors, Chidi Kanu, told our correspondent on Friday that members of the group would pause their protests following the intervention of the National Assembly.

He said, “We will be telling the public why we want to stop demonstrating for now, because what they (NASS) told us is that they want to put the debt owed us by the ministry in this 2020 budget that is currently being amended or reviewed.

“They, therefore, assured us that immediately they pass the budget, the ministry of agriculture will now pay us. But we don’t just want to leave it at that.”

Kanu said the contractors would continue to hold government and its agencies to their words until the N17bn debt was cleared.

Another affected contractor, Daniel Mozie, said members of the procurement committee of the green chambers of the National Assembly had assured contractors that all would be done to ensure they get their monies.

This came as it was gathered that the Senate Committee on Agriculture was moving to probe activities of the agric ministry following the recent scandal that rocked the ministry in connection with the alleged buying of a N7bn uncompleted building by its former Permanent Secretary, Mohommed Bello.

It was gathered from officials of the ministry and its contractors that although Bello had been cleared of the allegation, the Senate committee believed it was vital to further probe the matter.

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