No one has been brought to book over the N1 trillion subsidy theft

By Omoh Gabriel

LAGOS – The Federal Government has directed the Petroleum Products Price Regulatory Agency, PPPRA,to from now on, make public names of companies that draw from the subsidy fund.

This fact was disclosed by the Minister of Finance and Coordinator of the economy, Dr. Ngozi Okonjo-Iweala, in an interview with Vanguard.

She said: “Since we are still under a partial subsidy phase-out regime, that means we still have to maintain some subsidy. It is important for Nigerians to know that things will be done differently; that the Ministry of Petroleum and the Petroleum Products Pricing and Regulatory Agency, PPPRA, are looking at a new way of managing subsidy.

“There will be a more limited group of marketers— those who have genuine business in the sector and are known. They will look at criteria; we fix the number, limit it to a smaller number that can be more easily monitored and I think all these should be published so that Nigerians will see.

“We are looking at PPPRA publishing this, so we are not going to be administering subsidy in the old way where there were so many companies, more than a hundred were involved. We are going to have a more limited number, we are going to know who they are and the amount of fuel they will be importing will be known. Every Nigerian should be able to follow and this should be published.


On loan burden

“Back to the issue of loan, you asked how we can assure Nigerians that the nation is not yet again brought under a heavy loan burden and that loans are prudently applied.

As someone who was involved in the debt cancellation under the President Olusegun Obasanjo’s government, who actually spear-headed the discussion, there is absolutely no intent. I will be the last person and the President Goodluck Jonathan will also be the last person to subscribe to a situation in which we would pile up debts. We watch those indicators like a hawk. Mr President is very clear on this issue. As you well know, we have some ratios that we monitor with regard to GDP.

“The norm internationally is that it should not exceed 60 per cent of GDP. In Nigeria, we have adopted 30 per cent of that because we want to be really careful. Right now, our debt to GDP ratio is about 20 per cent well below the 30 per cent ratio we have set for ourselves. I may need to also clarify that the $7.9 billion external borrowing that we are talking about is over three years, not one year.

“At end of that period, even with the GDP growth rate we have, we are still going to have a ratio of around 20 per cent or so. Twenty per cent to 21 per cent is not going to be much because our GDP is growing and our debt is not growing as such. We are very prudent.

“The only segment that we have monitored even more closely is internal debt. We don’t want domestic debt to keep growing because interest rate is so high in Nigeria. Right now, what the government is trying to do is to issue bonds at an interest rate of about 16 to 17 per cent and that is a very high rate.

“We want to diminish the amount of borrowing domestically as well and we intend bringing down domestic borrowing from 2011 to 2012. You saw that we brought it down from N852 billion last year to N794 billion this year and we will continue to do that so that we don’t accumulate too much interest on domestic debt.”


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