N700bn Needed for Stable Power Supply - Minister
From Kunle Aderinokun in Abuja
Finance Minister, Dr. (Mrs.) Ngozi Okonjo-Iweala, at the weekend said the Federal Government needed about N700 billion (an equivalent of $5 billion) in the next five years to ensure adequate power supply to Nigerians.
The minister while co-chairing the closing plenary of the Nigeria-US Investment Conference organised by the Nigeria Economic Summit Group (NESG) and Corporate Council on Africa (CCA) also said about N98 billion (an equivalent of $700 million) was needed for the construction and rehabilitation of federal highways across the country.
Okonjo-Iweala said the World Bank had estimated that the power sector would gulp about $ 1 billion per year in the next five years to be able to make headway in meeting the country's need.
She pointed out that the biggest challenge that faced the Federal Government was the delivery on infrastructure and that the needs are enormous.
"If we don't do that and Nigerian people and businesses don't see this concrete evidence of the reform, then the acceptability will not be there. We are focusing a lot on investment in infrastructure. 85 per cent of he 2004 budget is going there - to roads, power, water, education, health and security. I think that in 2005, we would repeat about the same," he said.
While stating that the Federal Government has increased power generation to about 4,500MW for about 130 million people, she said the level was nothing compared to that generated in South Africa for the use of only 45 million people.
Given this scenario, therefore, she invited the private sector to invest in the power sector.
The finance minister disclosed that the Federal Government had realized N4.596 billion from the sale of state enterprises namely National Truck Manufacturing, Daily Times, West African refinery, Sierra Leone, Delta Steel and that six more enterprises including ALSCON, Ihechiowa Palm, Ore-Irele Palm, Electricity Meter Company, Peugeot Automobile of Nigeria (PAN) will soon be sold.
On the Ports, she noted that 110 proposals have been received and evaluated with 96 'concessioners' pre-qualified. She also said the Public-Private Sector Partnership (PPP) bill is still in the National Assembly and that the electricity bill would be passed in December.
She added that the Federal Government through the Due Process has saved the nation about N118 billion from over-bloated contracts. This has increased from N102billion recently announced by the Senior Special Assistant on Due Process, Dr. (Mrs.) Oby Ezekwesili. She added that the mechanism has enabled the government cut down the cost of government contracts.
On civil service reforms, she said the government embarked on the reforms to strengthen the civil service. She said that five pilot ministries have been chosen to push the reforms. According to her, "Ministry of Federal Capital Territory (MFCT) has finished payroll audits, computerized its payroll. About 238 people relieved of duty so far."
Lamenting that there have been stiff oppositions to the reforms, she said progress was being made to make the civil service more efficient. "Its very tough reforming the civil service. Quite a bit of resistance but we are working at it and we hope to make some inroads to shrink the size of the government and get it to the level that it should be," she added.
She further disclosed that the fiscal responsibility bill presently with the National Assembly would be passed in March 2005.
The Fiscal Responsibility Law has been defined as a set of rules that assure openness in the setting of goals for the revenue and expenditure of government; clarity of rules for management of public finances; open budget preparation, execution and reporting and; availability of comprehensive information on government financial activities to the public.
In his presentations on Land Transport Infrastructure in Nigeria, Mr. A.I Safana of the Federal Ministry of Works, Abuja said the country has 32,000 km federal highways, 3,200 km of railway lines while 92 per cent of Nigerians travels by road.
He noted that the railway system is almost at stand still while an average of 55 people die everyday in road mishaps in the country.
Safana who expressed confidence that private sector participation could solve the land transport system problem in the country pointed out that the private sector could participate in road infrastructure through build-operate and transfer, and rehabilitate-operate and transfer systems.
He pointed that in some African countries, the private sector participation with government have recorded successes. He said such countries include Chad with the National Transport Program Support Project, Maputo Corridor Toll road where the Wit bank of South Africa is involved, the Platinum Highway where Warmbaths of South Africa are involved and the 1286 km Joint Senegal-Mali railway linking Dakar to Bamako.
Meanwhile, giving the summary of the recommendations and action agenda, chairman, NESG, Alhaji Mohammed Hayatou-deen said the conference wanted the Federal Government to provide a regulatory framework especially the establishment of a new mining act and new national policy on solid minerals.
He added that the government should streamline business registration procedure in Agriculture, Agro-Allied Industries/Solid Minerals and re-establish pioneer status scheme.
Also, he said the conference recommended that the geological survey activities should be highly prioritized while also urging for the establishment of more export processing zones (EPZ) even as they wanted the government to formulate regime of incentives.
In the financial sector, the forum urged the government to consider it a priority the consolidation of the banking system through mergers and acquisitions, equity investment, competitiveness.
The conference, he said, also wanted the banking system to provide long-term funding and reduce the cost of funds.
On housing and social infrastructure, the forum recommended that rather than build, the government should provide tax and other incentives to private developers to be able to provide mass housing and also provide infrastructure around new developments.
He added that the conference wanted government to encourage credit unions to invest in housing. Similarly, they recommended that the government should encourage the use of local materials for building construction and also expedite the land reforms.
The government was also advised by the conference to implement the policy which provides for it to contribute 2.5 per cent its capital budget to the National Housing Fund (NHF).
As for the ICT sector, Hayatou-deen said the government should continue stable, open and transparent regulatory environment and develop local venture capital. The government was also asked to stimulate the development of hi-tech corridor.
Similarly, the Federal Government was also urged to accelerate ports reforms and replace the railway narrow gauge with standard gauge.
In the Energy sector, the conference impressed it on the operators to uphold highest standards in the area of safety, environment stewardship, community development, corporate governance/accountability.
The operators were also advised by the conference to use local suppliers/community for good and services required.
While urging the government on the enforcement of rule of law and sanctity of contract, the conference also wanted the government to fast track the deregulation and liberalization of the downstream and power sectors.
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