FG to Raise $2bn from Concession of Lagos-Kano/Port Harcourt- Maiduguri Rail
The federal government plans to raise $2 billion through the concession of the existing Lagos-Kano/Port-Harcourt-Maiduguri rail line, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, has said.
Udoma, who also explained that the federal government had released N400 billion out of the budgeted N1.8 trillion capital vote for the year, said discussions were on with General Electric (GE) to take over the rail line as part of the efforts to multiply revenue sources to fund the budget.
“We are working on all fronts at the same time. One is to get oil production back – it is very important. Two, is the asset sales, concession and all that. We are discussing with General Electric, and I will give that as a practical example,” Udoma said in a document released to THISDAY monday, adding that the firm had already committed to bring in $2 billion into the concession arrangement.
He said that the concessionaire would take over the rail lines, revamp them and build coaches in the country, explaining that the process of getting the thing through would however take some time.
“We have to wait for the various government agencies because there are certain procedures we have to go through. This is why we met and said, is there a way we can fast track some of these things? Because we need the money today, not in three or four months’ time,’’ Udoma explained.
The minister said the recurrent budget, as contained in the 2016 Appropriation Act, had been “virtually fully’’ implemented.
“As far as the recurrent is concerned, the 2016 budget has been virtually fully implemented. The emoluments have been paid in full. We’ve released all the money. At the federal level, all salaries have been released. We have met that in full,’’ Udoma stated.
He added: “We have also met all debt service in full. With regards to overheads, we have not met that in full but we are almost there. The problem has been capital. In the capital budget, we planned to spend about N1.8 trillion, but we’ve only spent about N400 billion.
“So, we have not been able to meet up with the level of capital releases. The reason for that is that if you look at the first six months of the year, the revenue performance was N1 trillion less than we projected.’’
The minister added that given that rate, it meant that at the end of the year, there would be N2 trillion less revenue than the country expected, saying there is no economy and person that could manage that without being where the country is tuesday.
On how soon Nigerians are likely to see some activities against the background that many analysts at the Economic (Ministerial) Retreat said recently that the federal government should pump a lot of money into the economy and see some busy activities happening, Udoma said the federal government completely agreed with that, stating that the Economic Management Team had been meeting for the last months over the fiscal stimulus to see how it could raise additional revenues.
He added: “We need to raise additional revenues. To release more money, you need to get the money first. So, we have a fiscal stimulus plan, which we have been developing over the last months. We intend to do a number of things. We are looking at assets sales, concession, and getting advance payments from licensing rounds and all that.
“We are targeting to raise between $10 billion to $15 billion and we have started that process. Why are we looking for dollars? It is because what we need to charge this economy is actually foreign currency. It is foreign currency shortage that is really responsible for where we are today. So, we have to look for foreign currency. We have a plan already.
“We have prepared a bill because we want to fast track some of these processes in order to be able to get the money from concession and all that. There are two sources of getting these additional funds. One is getting more crude oil production. At that time, we still thought we will be able get more oil production and get back to 2.2mbpd.’’
The minister further stated that the federal government was also looking at a strategy to contain the militant activities, adding that the government didn’t expect it to be as prolonged as it has been.
He said that the federal government, with the help of all stakeholders in the region, is still working to reduce the militant activity through dialogue and other strategy.
“If we can reduce them, we can take oil production immediately to 2.2mbpd. If we do that, we will be able to pump this additional money into the economy,’’ he stated.
On whether Nigeria is still producing around 1.1m barrel per day, the minister said it is now moving up because Qua Iboe Terminal had started operating.
Udoma also made some clarifications on the monies recovered and lodged in the Treasury Single Account (TSA) and looted funds recovered by the Economic and Financial Crimes Commission (EFCC).
“On the TSA, what we talk about is a flow. It is not that the TSA has recovered a surplus. The TSA is a mechanism for making sure that all payments go through a central point so they can be tracked, but those funds belong to various agencies and they end up being paid into the national treasury,’’ he stated.
“So, the issue of maybe N3 trillion lying idle in TSA is not correct. The money that has been flowing through, the cumulative amount is what is being spoken about. That money is not lying there idle for us to take. This has been clarified so many times. The Minister of Finance has said so on several occasions and I can’t understand why the issue isn’t still clear,’’ he said.
On the funds recovered by the EFCC, he said that until the legal processes were completed, the federal government could not spend them.