for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, over
her warning that the government would not be able to pay salaries by
September if the legislature failed to resolve the lingering impasse
over the 2013 Budget Amendment Bill.
President Goodluck Jonathan had forwarded a bill amending the 2013
budget of N4.987 trillion to the NationalAssembly four months ago, an
action the lawmakers have not been favourably disposed to.
Rather, the National Assembly has asked the executive to immediately
commence work on the 2014 Appropriation Bill.
The delay over the amendment had prompted the ministerto warn during a
radio interview on Ray Power FM Monday that if there was no resolution
on the bill, the government would not be able to pay public sector
workers by September.
Reacting to Okonjo-Iweala's statement, the Senate yesterday warned her
to desist from any act capable of putting the National Assembly on a
collision with the presidency on the 2013 budget amendment.
The Senate's spokesman, Senator Eyinnaya Abaribe, who said the Senate
was perplexed by the comment, dismissed insinuations that the economy
would collapse.
He said: "Firstly, the Senate does not view the comment kindly. The
feeling of the Senate and by extension, the National Assembly, has
always been that we don't expect ministers, appointees of the
president, to make commentsthat tend to make the legislature to be on
a collision with the executive.
"We are working towards the same purpose. We do not agree with the
minister that the economy will shut down if the National Assembly does
not do anything about the budget."
According to Abaribe, the third budget amendment proposal sent by
Jonathan to the Senate was more voluminous than the original 2013
budget document, adding that as a result of the size of the new
proposal, the Senate could not deliberate on it until senators
returned from their annual vacation in September. The vacation begins
in August.
"If there are differences, we shall discuss with the president in
order to trash them out. The president cannot expect us to pass the
proposal without looking into the volumnious document.
"The finance ninister should not put us on a collision course with the
president. The Senate will consider what was sent," he said.
Abaribe's reaction also coincided with the receipt of a new amendment
proposal read on the floor of the Senate yesterday before the
parliament suspended sitting in honour of the late Senator Pius
Ewherido who passed on June 30.
In the new proposal, Jonathan accused the National Assembly of
removing some capital votes from the initial proposed amendments
thereby making execution of such projects impossible.
But in his reaction, Abaribe said it was impossible to pass a budget
as submitted to the National Assembly.
As reported by THISDAY last week, the president's proposal indicated
new changes across the expenditure categories.
He also sought to restore the original budgetary allocations of some
capital projects "to promote national development".
Some of these projects under contention include some projects under
the Ministries of Works, Health, Power, Transport and Education, as
well as the budgetary allocation for projects under the Subsidy
Reinvestment Programme (SURE-P).
"You will further recall that the personnel cost was cut across all
ministries, departments and agencies (MDAs) which will make it
difficult for government to meet its obligations to its workers," the
president said.
Meanwhile, the Senate yesterday postponed voting on the constitution
amendment slated for this week as a result ofthe demise of Ewherido.
Debate on the amendment will now take place next week.
The upper chamber also set up a nine-man committee to liaise with the
family of the late senator on his burial.
Also reacting to Okonjo-Iweala's statement on the budgetamendment
bill, the House of Representatives accused theminister of blackmailing
the National Assembly and mandated its Committees on Appropriation,
Finance and Legislative Compliance to invite her to explain the
rationale behind her recent predictions on the economy.
The summon came just as the House also resolved to invitethe top brass
of the Nigerian security and intelligence forces over the increasing
incidents of illegal oil bunkering in the country's coastal waters.
The House said the briefing on the security situation across the
coast would take place behind closed doors.
The House also appealed to the Academic Staff Union of Universities
(ASUU) and National Union of Petroleum and Natural Gas Workers
(NUPENG) to call off the currentstrike embarked upon by both unions in
the interest of the nation.
Rising on Order 8 Rule 46 of the House Rules, Deputy Minority Whip of
the House, Hon. Samson Osagie (ACN/Edo), said the assertions of
Okonjo-Iweala were intended not only to blackmail the legislators in
the discharge of their constitutional mandate but also to incite
Nigerian workers against the National Assembly.
Osagie argued that the non-passage of the budget amendment bill could
not be an excuse for the non-implementation of the substantive budget.
He said the National Assembly had always been alive to
itsresponsibilities and would not be stampeded by "any government
appointee" in the discharge of its duties.
"We are aware that there is a valid Appropriation Act duly signed into
law by the president which is the operating budget for the Federal
Republic of Nigeria for the 2013 financial year.
"We are also aware that from available field reports, the executive
organ of government is deliberately delaying or exercising undue
tardiness in the implementation of the 2013 budget.
"The House is worried that the Minister of Finance has consistently
insulted the sensibilities of the National Assembly through her
constant umbrage and blackmail of this institution," he said.
After Osagie's comment, there was no further debate on the matter as
the House endorsed the motion and insisted that the 2013 Appropriation
Act must be implemented to the letter in spite of the amendment
proposal pending before the National Assembly.
In another motion, Hon. Ali Madaki drew the attention of the House to
dwindling oil exploration in Nigeria and its attendant consequences on
the economy.
Madaki said the rising incidents of theft of crude oil in Nigeria,
estimated at 300,000 barrels per day, was taking its toll on the
economy.
He recalled that in order to stem the tide of crude oil theft, the
federal government had awarded pipeline surveillance contracts to some
firms to secure the nation's waterways but observed that the incidents
have remained on the rise.
Adopting the motion, the House asked the Federal Ministry of Petroleum
Resources to install automated metering to verify actual oil
production from the oil wells, flow heads and export terminals.
It also urged the federal government to fully equip the security
forces so that they can discharge their constitutional mandates as
provided for in Section 217 (2) (b) of the constitution.
The lawmakers also urged the federal government to prosecute those
involved in oil theft no matter how highly placed as this would
serve as a deterrent to others.
But in response to the National Assembly's anger over her statement,
Okonjo-Iweala informed THISDAY that she never said the economy would
collapse in the interview, insisting that it was the interpretation
given by the media.
She maintained her position that the budget amendment should be passed
to forestall the non-payment of public sector wages by September.
She said: "N32 billion was shaved off from the personnel cost by the
National Assembly. Although our total wage bill is N1.7 trillion, by
removing N32 billion, it has affectedour ability to meet our
obligations to workers.
"It is not that all civil servants will be affected by the N32 billion
deduction, but how do we determine who to pay and those we should not
pay by the alteration of the personnel cost by the National Assembly.
"So all I was saying was the legislature should please restore the
costs that were deducted for personnel as well as those of other
ministries."
In the meantime, Nigeria yesterday successfully returned to the
markets with a $1 billion dual-tranche international bond offering
comprising a $500 million five-year bond and $500 million 10-year bond
at coupons of 5.125 per cent and 6.375 per cent per annum
respectively, which were over-subscribed by 400 per cent.
In a statement issued by Okonjo-Iweala last night, the minister said
the issuance came on the back of highly volatile international
financial markets, which saw sharpdrops in prices of equities and
bonds following expectations of a tapering of quantitative easing by
the U.S. Federal Reserve Bank.
The anticipation of reduced liquidity and higher interest rates saw
investors sell off some assets especially those from the emerging
markets (EM) sector.
During this period of market turmoil, investors became averse to EM
risk, switching significant portion of their holdings into cash and
near-cash assets and away from tenored assets.
She said the success level of the two new Nigeria international bonds
against the backdrop of volatile financial markets in which only a few
new deals were priced, is further captured in the high level of
subscription recorded for each of the two new issues and the ability
to tap both the medium and long-term parts of the yield curve.
"The two tranche offering gave Nigeria the opportunity toachieve an
overall cheaper cost of borrowing (the 5-year bond was priced 125 bps
cheaper than the 10-year bond) while also creating new 5-year and
10-year sovereign benchmark reference points," the minister explained.
The transaction was distributed primarily to U.S investors, followed
by those in Europe, Asia and other regions of the world.
Investors that participated in the transaction included fund managers,
private banks/banks, pension/insurance funds and other investors.
Okonjo-Iweala added that the strong sponsorship and demand for
Nigeria's sovereign debt securities in the international capital
markets (ICM) was evident during the roadshow in Europe and the U.S.,
where top institutional investors considered Nigeria to be one of the
top performers among EM countries and certainly one of only a few
African countries with the appropriate credit story for investors
during this time.
The transaction marked the largest international public benchmark bond
issuance from a sub-Saharan African sovereign in 2013 year-to-date and
testifies to investors' ongoing interest in the unlocked potential in
Nigeria.
The minister disclosed to THISDAY that the bonds were 400 per cent
over-subscribed at 275 basis points lower thanwhat Nigeria offered in
2011 when it issued a $500 million Euro bond.
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