DETAILS of the proposed reforms in two critical sectors - industrial and the oil gas - were unveiled by senior officials of the Federal Government at different fora in Abuja yesterday.
The reforms, designed to reposition the sectors, are expected to bring succour to the embattled industrialists, who are groaning under harsh operating environment and to enthrone fiscal responsibility in the oil and gas industry.
For the industrial unit, a N500 billion Comprehensive Industrial Revival Fund is being packaged by the government to tackle the numerous problems facing operators in the real sector.
At a public hearing convened by the Senate Committee on Industries on the "Collapse of the Nigerian Textile Industries" in Abuja yesterday, Minister of Commerce and Industry, Chief Achike Udenwa, said besides the N500 billion strategic fund, another N100 billion was being sourced by the government to revamp the distressed textiles' industry.
His Petroleum Resources counterpart, Dr. Rilwan Lukman, said henceforth, all oil revenues accruing to the government would become public information accessible by all Nigerians and stakeholders to remove confidentiality from the nation's "oil business."
Lukman at the Stakeholders' Consultative Meeting on the Petroleum Industry Bill (PIB) now before the National Assembly for passage, hinted that oil revenues would also be collected through monthly royalty because "it is easily calculable and that it can be done by interested Nigerians."
Briefing the panel on the Executive's package for the industrial sector, Udenwa lamented that in the textile unit, 54 firms in the last 10 years had closed shop leaving only three in the country.
He listed some of the factors that aided the collapse of the industry as smuggling of fake textile products into the country, use of obsolete equipment, incessant power failure, and Nigerians' increasing taste for foreign goods.
Udenwa said the N70 billion intervention fund sourced by the last administration to address the problems in the industry was not realised before its terminal date.
"What the President Umaru Musa Yar'Adua's administration is proposing now is to source N100 billion to save the textile industry. This is being done in collaboration with the Bank of Industries," he said, adding that the problems facing the entire industrial sector were being addressed through the proposed N500 billion Comprehensive Industrial Revival Fund.
He said: "My ministry has proposed a Comprehensive Industrial Revival Fund worth N500 billion. It has been submitted to the economic team for thorough reworking."
The minister also revealed that a whopping N630 billion was spent on petroleum subsidy in 2008 which was equivalent to about 50% of the nation's capital budget. This situation, he said, has made deregulation policy a necessity.
Lukman said the present high level of confidentiality in the system gives room for manipulation and official corruption, which according to him, the Petroleum Industry Bill (PIB) is envisaged to curb.
"Good governance is promoted through the removal of much of the confidentiality as well as creating transparency. Confidentiality encourages corruption. The best way to fight corruption is to remove confidentiality from all procedures, contracts and payments. Every Nigerian including all stakeholders should have the right to know what is going on. The bill removes confidentiality on a scale not seen in the world before. Nigeria will move in one step from one of the most opaque petroleum nations in Africa, to one of the most open and transparent in the world. The texts of all licenses, leases and contracts and any of the changes to such documents will no longer be confidential. Payments to the government will be public information."
Not only that, all petroleum geological, geophysical, technical and well data would be accessible for all interested persons in a national database, he said
Lukman said the bill would result in a significant increase in transparency, adding "from now on, petroleum prospecting licences and petroleum mining leases can only be granted by the minister through a truly competitive bid process. Such process will be open and accessible to all qualified companies.
"The days when who-you-known reigns supreme in allocating favours to oil firms is over as every company involved in the upstream petroleum industry will be subjected to the same system of rents, royalties and taxes, depending on whether they operate in the onshore, shallow or deep offshore or inland areas," he said.
To facilitate the collection of oil revenues, the affected companies are to establish an electronic information system, with security key access for all persons that are authorised by government to inspect and audit.
The minister further said: "The simplest government revenues to collect are royalties. Everyone can calculate and verify on the back of an envelope how much royalties should be collected from each oil and gas field each month. Therefore, the main emphasis of the new government petroleum revenue system is on royalties. The royalty percentages are designed in such a way that they automatically adjust to the economic circumstances. This is done with two sliding scales. One scale relates to the daily production of the oil or gas filed. Another scale relates to the oil and gas price. Also, royalties vary in four different geographical areas: onshore, shallow offshore, deep offshore and inland basins. If oil prices go up unexpectedly as happened in 2008, Nigeria will reap an instant benefit because royalties are levied every month."
Under the proposed law, each company is now required to pay corporate income tax just as he explained that Petroleum Profit Tax will be split into two, which include Corporate Income tax and the Nigerian Hydrocarbon Tax.
"The Nigerian Hydrocarbon Tax is not deductible for the Corporate Tax purposes, and is therefore a true extra tax. Under the Nigerian Hydrocarbon Tax to be simplified, many costs that are difficult to audit, such as interest on loans, will no longer be deductible," he said.
Meanwhile, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has given a tacit support to deregulation of the downstream sector of the oil industry even as the Nigeria Labour Congress (NLC) continues its protest against the move.
At a meeting yesterday, PEGASSAN President, Mr. Babatunde Ogun, said the union was not entirely against deregulation but that it was worried by the way it would be mismanaged.
He said: "PIB is long overdue and we support it. Our fear is the implementation and not the bill itself. On deregulation, our position is that the refineries must work and 50 per cent of what we produce should be refined locally. We must have national target. There is no doubt that we need to deregulate and we are making changes in the labour movement and we are also in talks with government. However, we need further engagement to move forward."
Also yesterday, the Nigerian Customs Service (NCS) said smuggling had become difficult to check because of the involvement of privileged citizens and poor facilities for the operations by its personnel.
The Director-General of the Standards Organisation of Nigeria (SON), Dr. John Akanya, raised the stake, when he told the House Committee on Industries that his life was being threatened by persons opposed to his efforts to stem the importation of fake products into the country.
NCS Comptroller (Import and Export), Mr. Julius Nwagwu, who narrated the ordeals of Customs officials with smugglers, alleged that highly placed Nigerians were neck-deep in the illegal trade.
Nwagwu said: "We all know that smuggling is capital intensive and is carried out by those who have the ways and means. How come the smugglers appear to be winning the battle? A situation where the officers of the Service are posted to border stations and they find themselves as tenants of big time smugglers. I want us to imagine what is expected of such officers by way of performance. Aside from the issue of the porous border stations, which I have always said with the 12,000 officers of the Nigeria Customs Service hold hands together we cannot cover the borders of this country. There is no doubt about it. However, that is not to say that we are giving up the fight."
"To whom much is expected, much should also be given. If you empower us with the necessary tools and support, I want to tell you that Customs officers in some situations have lost their jobs for insisting that the right thing be done. Wives of well-to-do Nigerians operate from Nigeria to Dubai as if they are going to Nassarawa State here. Do we ask ourselves what they go there to do? And by the time they are returning, you receive telephone calls from quarters you do not imagine telling you, 'please my wife travelled.' Somebody who travelled and is returning in one week with 10 suitcases, 12 suitcases, are we not mouthing policies? We all are involved, we all stand accused, we are all guilty. So, it requires a holistic approach and the moment that is done, I think there will be a way forward. You end up being blackmailed; you do not have access to the powers that be when these issues are being discussed; for refusing to let a smuggler to operate, when you are reported the story is turned that you are not facilitating trade but it is because you have refused to facilitate fraud. You are labelled; when it is time to uplift officers you are marked down and you will not even know what is happening to you; you will not know the angle from which it is coming because you have been destroyed for insisting that the right thing be done."
Corroborating the NCS' story, Akanya, said: Our own mandate is to check quality of imported products. We are having problems of smuggling and dumping of substandard products in Nigeria. When I travelled to the United States (US) I got the names of 14 companies involved in this syndicate of smuggling. SON has raided and confiscated what we see. We have lost vehicles, we have lost fights, where our personnel almost died. My life is in danger, I received threatening calls everyday in the attempt of the organisation to rid the country of substandard goods."
0 comments:
Post a Comment