National Assembly
2013 Budget Amendment Bill…
•Jonathan asks N'Assembly to restore budget cuts
•Minister: I never said economy would collapse
•Nigeria's $1bn dual-tranche Eurobond over-subscribed by 400%
Ndubuisi Francis,Nzeshi Onwuka and,Omololu Ogunmade
The National Assembly is up in arms against the Coordinating Minister
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 National Assembly 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 minister to 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 comments that 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 of the 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 budget amendment bill, the House of Representatives accused the minister 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 invite the 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 current strike 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 its responsibilities 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 affected our 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 sharp drops 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 to achieve 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 than what Nigeria offered in 2011 when it issued a $500 million Euro bond
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