Re: Downside of Debt Sustainability Claim

By Abraham Nwankwo

After reading the above captioned article on the back page of Thisday of Monday, May 21, 2012 we have considered it necessary to make observations and clarifications for the benefit of the general public.

It is pertinent to state upfront that the Debt Management Office (DMO) subscribes to the principle that effective and efficient use of resources to generate maximum output and overall budgetary/fiscal discipline, are imperative not only for debt sustainability, but for overall economic sustainability. It is fair to observe that these elements are among the target change parameters in the country’s Transformation Agenda.

Ordinarily, in any economy, government borrowing from the domestic debt market has the potential to crowd out the private sector. However, it is pertinent to note that before 2003, the market for long term debt (bonds) had been abandoned for nearly 18 years – mainly by the military governments. From 2003, the DMO worked with other government agencies and market operators to resuscitate and develop the market. In doing so, it took advantage of the need to fund fiscal deficits as contained in the annual Appropriation Acts to issue long-term bonds. Deliberately, the DMO set up the structures, institutions and procedures that led to the development of the market for 3-year, 5-year, 7-year, 10-year, and 20-year bonds. These bonds in combination with the Treasury Bills of 91-day, 180-day and 360-day tenors have led to the establishment of a sufficiently reliable yield curve. More than 16 companies have issued long term debt instruments in the market since 2003.

Meanwhile, having used its borrowing operations to develop the market, the government is conscious of the need not to crowd-out the private sector. Accordingly, it plans to progressively reduce its borrowing from the domestic market over the next few years along the path of fiscal consolidation as stated in the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), 2012 -2015.
In this regard, the article under reference misrepresented the statement of the Coordinating Minister for the Economy/Honourable Minister of Finance (CME/HMF) by stating that she “promised” to reduce Nigeria’s debt to N500bn in 2015. What the CME/HMF has repeatedly explained is that in line with government’s strategy to create more borrowing space for the private sector in the domestic debt market, government’s new domestic borrowing will be reduced progressively from N852bn in 2011 to N500bn in 2015. This is clearly a statement that the flow, which is new borrowing, will be reduced progressively and in no way means that the total outstanding debt stock will be reduced to N500bn. For the avoidance of doubt, it is important that analysts and commentators do not mix up stocks and flows in the analysis of public debt.

The article, relying on a number of invalid presumptions, repeatedly attempted to question the DMO’s Debt Sustainability Analysis (DSA). Hence, the need for clarifications. The DMO conducts DSA every year in collaboration with the Central Bank of Nigeria (CBN), Budget Office of the Federation (BOF), Federal Ministry of Finance (FMF), National Bureau of Statistics (NBS) and National Planning Commission (NPC). The DSA makes 20-year projections on the country’s debt sustainability based on baseline, optimistic and pessimistic scenarios for external and domestic debts. The stress test analysis takes into account reduction in revenues in the event of a drastic fall in oil prices to arrive at conclusions about sustainability. In particular, it considers that oil is the major contributor to government revenue and this has influenced the decision to be guided by a more conservative debt/GDP limit of 25% against international peer group standard of 40%.

For the avoidance of doubt, the DMO borrows in accordance with the annual Appropriation Acts where the projects to be executed are clearly stated. The writer tended to mislead the public to think that the DMO is responsible for both the demand for borrowing and the implementation of the borrowing. This is false. The demand for borrowing is strictly an element of the budgeting process, reflected in the size of the fiscal deficit. When the Appropriation Bill, containing the fiscal deficit is enacted by the National Assembly and signed into law, the DMO is under national obligation to borrow money so that the planned resources are available for MDAs to execute the planned projects and programmes.

The bearing of AMCON Bonds on the public debt was also inaccurately presented in the article. As at date, the FGN has guaranteed AMCON bonds to the tune of N1.742 trillion, and not N4.5 trillion. However, based on the AMCON Act 2010, the FGN is required to guarantee all AMCON bonds. Thus, if AMCON appropriately approaches the FGN to guarantee additional bonds, the FGN would oblige. The guarantee of AMCON bonds does not automatically constitute an addition to the public debt stock; rather, it is a contingent liability.

Since AMCON bonds are a contingent liability, they should and are not included in the debt/GDP ratio or any other indicator of solvency and liquidity. However, they are included in the sensitivity analyses and stress tests, which reflect possible shocks that could derail the direct ratios. This is the right approach and the DMO Nigeria adheres to this globally tested and accepted methodology in the preparation of the annual debt sustainability analysis.

It is completely incorrect for the writer to claim that “DMO has failed to grapple with the public debt implications of the activities of the AMCON.” For the records, the DMO has worked cooperatively with AMCON to develop a credible package for self-redemption of the bonds it is issuing in exchange for the non-performing assets of the banks. The deposit money banks are contributing into a Sinking Fund, 0.3% of their total balance sheet, annually to cover any shortfall AMCON could have after recoveries from the assets it has acquired. In addition, the CBN is contributing N50 billion per annum to the Fund. So far, AMCON’s performance in assets recoveries is better than projected.

The article is also outrightly misleading in respect of its position on MDAs’ outstanding obligations to local contractors. For the avoidance of doubt, the DSA conducted by the DMO takes into account outstanding obligations of MDAs to local contractors. Verified data on the obligations are available at the BOF. Furthermore, it is necessary to differentiate between structured public borrowing (external and domestic) and operational obligations that arise from the routine implementation transactions of MDAs, which are part and parcel of the implementation of the annual budgets. While the former falls squarely within the purview of the DMO, the latter is managed by the BOF. In this regard, the various improvements being introduced by the FMF and the BOF in budget preparation, implementation, monitoring and evaluation are aimed at, among other goals, ensuring timely payment for completed jobs and minimization of arrears of obligations to local contractors. However, for debt sustainability analysis, obligations to local contractors are adequately captured.

To equip investors and creditors (local as well as foreign), the DMO maintains an elaborate website with detailed quantitative and qualitative information. In addition, the DMO proactively organises local and foreign roadshows. In line with this practice, and as a complement to regular interactive fora with the local media and other stakeholders, between February and April this year, the DMO organised non-deal roadshows in two European and four USA cities. The purpose was to give existing and potential investors, first hand information and answers to questions on, not only the Nigerian debt market, but on broader issues of the Nigerian economy and polity.

AfDB Predicts 4.5% GDP Growth for Africa

28 May 2012

Font Size: a / A

Oil tanks


   Reuters
The African Development Bank said on Monday it forecast the continent's economy would grow 4.5 percent this year and 4.8 percent in 2013, but warned the festering euro zone crisis may hurt demand for African exports.

Africa's economy grew 3.4 percent in 2011, with North Africa's economic output expanding 0.5 percent and sub-Saharan Africa growing by more than 5 percent, Reuters reported.

"The economic outlook for Africa remains optimistic. Natural resource-rich economies are expected to do better than more mature emerging economies," AfDB said in its annual African Economic Outlook.

.US: Nigerian Judiciary Corrupt with Impunity

Mrs Hillary Clinton

By  Tokunbo Adedoja    

United States has said that despite the fact that the nation’s law provides criminal penalties for official corruption, government does not implement it effectively, “and officials frequently engaged in corrupt practices with impunity”.

The US also said though the constitution provides for an independent judiciary, the Nigerian judiciary "remained susceptible to pressure from the executive and the legislative branches, and the business sector".

These verdicts were contained in a new report titled: "Department of State’s Country Reports on Human Rights Practices for 2011", which was submitted to the Congress Thursday  by the Secretary of State, Mrs Hillary Clinton.

The report lamented that, "Official corruption and lack of will to implement court decisions also interfered with due process. The law provides for access to the courts for redress of grievances, and courts can award damages and issue injunctions to stop or prevent a human rights violation. However, the decisions of civil courts were difficult to enforce."

In the report, US also noted last year's suspension of the President of the Court of Appeal (PCA), Justice Ayo Isa Salami, by the National Judicial Council (NJC) over his refusal to apologise to the NJC and the then Chief Justice of Nigeria (NJC), Justice Aloysius Katsina-Alu, and his compulsory retirement by President Goodluck Jonathan, who acted under his constitutional authority.

The report however noted that, "The case raised questions regarding the partisan nature and level of independence within the judiciary."

Giving details of the case, the report said: "Salami had accused Katsina-Alu of interfering in the proceedings of the 2007 Sokoto State gubernatorial court case. In an attempt to settle the dispute, the NJC set up three panels to investigate the disagreement.

"The panels declared neither justice was at fault, declared the issue resolved, and requested that Salami apologise to the NJC and Katsina-Alu. The Nigerian Bar Association reached contrary findings, and Salami refused to apologise."
It specifically noted that, "Massive, widespread and pervasive corruption affected all levels of government and the security forces."

While noting that the government brought few persons to justice for abuses and corruption, it said despite the arrest of several high-ranking officials by the EFCC, allegations continued that the agency's investigations targeted individuals who had fallen out of favour with the government, while those who were in favour continued their activities with impunity.

On the anti-corruption crusade of government, the report said that since 2005, the EFCC prosecuted 26 nationally prominent public officials and recovered N1.7 trillion ($10.5 billion).

It however noted that "only four of these officials - former Inspector General of Police Tafa Balogun, former Bayelsa State Governor Diepreye Alamieyeseigha, former Edo State Governor Lucky Igbinedion, and PDP chieftain and former Nigerian Ports Authority chairman Olabode George - were convicted", while the courts granted bail to all the others.

The report also identified the harsh and life threatening conditions in Nigeria's prison and detention centres as one of the human rights problems in the reporting year, adding, "Most of the country’s 234 prisons, built 70 to 80 years earlier, lacked basic facilities."

It said the prison system included 11 maximum security prisons, 80 satellite prisons, 10 farm centres, eight zonal offices, and six directorates - all of which held prisoners and detainees.

Quoting statistics released by the Nigerian Prison Service last year, it said the country’s prisons held 48,124 inmates, with individual prisons holding as much as 500 per cent of their designed capacity. 

Citing examples, it said Owerri Federal Prison had a capacity of 548 prisoners but held more than 1,635,  Ogwuashi-Uku prison in Delta State, with a capacity of 64 prisoners, held 358 inmates, while Port Harcourt Prison, with a capacity of 804 prisoners, held 2,594.
The report said other serious human rights problems identified included arbitrary arrest and detention; prolonged pre-trial detention; sporadic abridgement of citizens’ right to change their government due to some election fraud and other irregularities; infringements on citizens’ privacy rights; restrictions on freedom of speech, press, assembly, religion, and movement; official corruption; violence and discrimination against women; child abuse; and female genital mutilation.

It said other serious human rights problems included killing of children suspected of witchcraft; child sexual exploitation; ethnic, regional, and religious discrimination; trafficking in persons for the purpose of prostitution and forced labour; discrimination against persons with disabilities; discrimination based on sexual orientation and gender identity; vigilante killings; forced and bonded labour; and child labour.

It however identified the abuses committed by Boko Haram, which was responsible for killings, bombings, and other attacks throughout the country; abuses committed by security services with impunity, which included killings, beatings, arbitrary detention, and destruction of property; and societal violence - including ethnic, regional, and religious violence, as the most serious human rights problems during the reporting year.

On the importance of the report, Clinton noted that Congress mandated these country reports more than three decades ago to help guide lawmakers’ decisions on foreign military and economic aid.

She said: "Today, governments, intergovernmental organisations, scholars, journalists, activists, and others around the world rely on these reports as an essential update on human rights conditions around the world."

It was also noted in the report that, while political leaders influenced the judiciary, particularly at the state and local levels, also identified understaffing, underfunding, inefficiency, and corruption as problems which continued to prevent the judiciary from functioning adequately.

It further gave a harsh verdict on operators in the judicial arm as it said: "Judges frequently failed to appear for trials, often because they were pursuing other sources of income and sometimes because of threats against them."

Apart from that, it noted that, "court officials often lacked the proper equipment, training, and motivation to perform their duties, with lack of motivation primarily due to inadequate compensation."

The report also said: "There was a widespread perception that judges were easily bribed and that litigants could not rely on the courts to render impartial judgments. Citizens encountered long delays and alleged requests from judicial officials for bribes to expedite cases or obtain favourable rulings."

Assessing civil judicial procedures and remedies, the report noted that although the constitution provides for independent judiciary in civil matters, "the executive, the legislature, and business interests, however, exerted undue influence and pressure in civil cases".

Rwanda 'Backing DR Congo Mutiny'

28 May 2012

Font Size: a / A

Congolese soldiers have been conducting operations against rebels in the M23 movement

The UN says it has evidence that a rebellion in the Democratic Republic of Congo is being fuelled by recruits and support from neighbouring Rwanda.

An internal UN report seen by the BBC cited defecting soldiers, who said they had been trained in Rwanda under the pretext of joining the army, before being sent over the border to fight.

The conflict broke out in April after a mutiny by some Congolese army officers.

Some of the leaders are Tutsi officers who had been linked to Rwanda.

They were incorporated into the Congolese army in 2009 as part of a peace agreement.

The area has suffered years of fighting since the mid-1990s, when over a million ethic Hutus fled across the border into DR Congo following the Rwandan genocide.

There has so far been no response from the Rwandan government to the allegations.

Tens of thousands have fled the recent violence in the east of the country.

The BBC's Gabriel Gatehouse, in the eastern Congolese city of Goma, says the UN spoke to 11 defectors there.

They had deserted their posts in the mountainous jungle area on the border between the DR Congo and Rwanda.

The UN report says the deserters were Rwandan nationals, recruited in Rwanda under the pretext of joining the Rwandan military. They were given weapons and training, and were then sent into DR Congo.

Some of the men were recruited as early as February 2012, the report says.

This is a potentially significant detail, our correspondent says: if the claim is true, it would suggest Rwanda was preparing for conflict before the mutiny by rebellious officers began in April.

One of the deserters, the report says, is a minor.

Earlier, there was fresh fighting between government forces and the army mutineers.

A spokesman for the mutineers, Vianney Kazarama, told AFP that the Congolese army was attacking one of their strongholds in Nord-Kivu province with heavy weapons.

The mutineers say they belong to the March 23rd Movement which originated from an armed ethnic Tutsi group, the CNDP. They agreed to be integrated into the Congolese army under the 2009 peace accord but recently started to defect en masse, complaining of bad treatment.

Bosco Ntaganda, who is known as the "Terminator" and wanted by the ICC for alleged war crimes, is accused of masterminding the mutiny. He denies the claim.

Before the peace deal, the CNDP militia threatened to invade Goma, leading some 250,000 people to flee.

People in and around the town of Goma blame these troops for persistent unrest - including looting and rape - since the formal end of DR Congo's war in 2003

Clark: 2015 is Diversionary, Says PDP

28 May 2012

Font Size: a / A

Edwin Clark

By  Chuks Okocha 

In an apparent reaction to the statement credited to the former Minister of Information and Ijaw leader, Chief Edwin Clark, the Peoples Democratic Party (PDP) Sunday  said the call for President Goodluck Jonathan to contest the 2015 presidential election is diversionary, explaining that it is not an issue for discussion at least for now.

The party said discussion on 2015 was the handiwork of the opposition political parties to distract the President from his agenda of transformation.

But reacting Sunday, the PDP National Publicity Secretary, Chief Olisa Metuh, said what preoccupies the mind of President Goodluck Jonathan and the PDP was how to deliver dividends of democracy to the people of Nigeria.

According to Metuh, what the opposition political parties want at the moment is for PDP to concentrate its efforts on 2015 and then distract the President, adding, ‘’2015 is diversionary, we are not interested in 2015 now, we are more focused and to ensure that we deliver on our promises to the electorate.

“Nigerians do not have to live from election to election and the issue of election at the moment is secondary to us, we are very busy with governance and how to improve on the present situation.

The National Working Committee, NWC that is led by Alhaji Bamanga Tukur, was supporting President Goodluck Jonathan to ensure that dividends of democracy were provided for the people of Nigeria. The opposition parties want us to focus on election and who will win or not instead of democracy,” Metu said.

Clark while marking his 85th Birthday, said former President Shehu Shagari, contested  the presidential election in 1979 and won and in 1983, he contest for the second term in office before he was ousted by the military led former General Muhammadu Buhari.

He also said: “Former President Olusegun Obasanjo contested for the presidential election in 1999 and won and later contested for the second term in office in 2003 and won”, asking why the case should be different for President Jonathan.

Accordingly, he said: “Jonathan is a Nigerian. Nigerians voted for him beyond religious and cultural differences. What we should be asking is that he should perform as President in office. If he performs well, the same Nigerians should vote for him he has another term.”

Beyond that, Clark said section 137 of the 1999 constitution permits President Jonathan has the constitutional right to seek for a second term in office. I am not aware whether he made any commitment to contest for only one term to Nigerians which is irrelevant at the moment. Personal promises cannot override the constitution of Nigeria

FG Suspends Payment of Fuel Subsidy to Marketers

 Minister of  Petroleum,  Diezeani Allison Madueke

By Kunle Aderinokun and Ejiofor Alike

To avoid further crisis with the National Assembly over another "extra-budgetary expenditure", the Federal Government has suspended payment of arrears of fuel subsidy for 2011, which also covers the first quarter of 2012.

This year's N888 billion provision for subsidy also covers arrears carried over from last year, but the entire budget is virtually exhausted five months into 2012.
The shortfall is attributed to higher landing cost of imported fuel and underestimation of subsidy for local consumption in the current budget.

But the Petroleum Products Pricing Regulatory Agency (PPPRA), THISDAY, has rejected the directive by the Ministry of Finance to suspend processing of payments for marketers, insisting the ones for 2012 should commence to avoid fuel crisis, pending the resolution of the issue of 2011 arrears.

The Nigerian National Petroleum Corporation (NNPC) has also raised the alarm that the Ministry of Finance was about to plunge the country into a fuel crisis because its fuel subsidy

projection for 2012 was 19 million litres daily, instead of the "actual figure" of over 33 million litres.
But responding on behalf of the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, her Senior Special Assistant on Media, Mr. Paul Nwabuikwu, told THISDAY that the ministry would prefer not to join issues with other government departments and agencies.

“The issue of underestimation does not arise because the NNPC and PPPRA which had the responsibility did not provide any basis for estimation of consumption. They both gave very different estimates which could not sustain scrutiny. The ministry did the best thing in the circumstance which was to use an economic estimation method to arrive at the projected amount of subsidy for 2012 based on growth in income and growth in demand. This amount was based on the consumption for 2008 which was adjudged as a good base year from an assessment of various relevant factors,” he explained.

Nwabuikwu stated that in the course of preparing the budget, there was a lot of public concern about subsidy payments, adding that this was reflected in the probe by an ad hoc committee of the House of Representatives.

Various figures ranging from N1.2 trillion to N2 trillion were estimated as expenditure on subsidy last year which was considered as fraud by the public, while daily consumption was also estimated at various inconsistent figures.

According to Nwabuikwu, National Assembly estimation of the subsidy was N557 billion.
The finance ministry "had to do a lot of work" to estimate the amount which was eventually approved - N888 billion - through the legislative process, he added.

“So prudence and realism were our watchwords during the entire process. In the light of these challenges and the lessons learnt, we have commissioned the globally respected consulting firm, Mckenzie, to use their worldwide and resources to help us estimate the consumption, going forward. The bottom line is that we are determined to ensure that the interests of the Nigerian people are always paramount,” Nwabuikwu said, adding that the current efforts will eventually provide the authentic figures.

THISDAY gathered the Ministry of Finance has directed the PPPRA and the Debt Management Office (DMO) to stop issuing Sovereign Debt Statements (SDS) and Sovereign Debt Notes (SDN), respectively, to marketers.

But the PPPRA has rejected the directive, insisting that “if the arrears of 2011 are to be suspended, payment for 2012 should commence to avoid fuel scarcity”.

Under the subsidy regime, PPPRA issues SNS to marketers, who forward them to the Debt Management Office to obtain SDN, which they use to make subsidy claims for imported cargoes.

But it was gathered that acting on the instruction of the Ministry of Finance, the DMO has withheld the Sovereign Debt Notes of marketers, who had submitted their Sovereign Debt Statements for processing of payment.

It was however learnt that the PPPRA has protested to the Director General of the DMO, Dr. Abraham Nwankwo, insisting that they should release the debt instruments for the payment of the marketers to avoid fuel crisis.

The official in charge of issuance of sovereign debt notes at the DMO, Mr. Atiku Saleh, referred THISDAY to the Ministry of Finance, saying “that is where the directive came from”.
“We don’t administer fuel subsidy; we are just clearing house. When they (Ministry of Finance) asked us to stop; we stopped,” he said.

THISDAY gathered that the DMO has withheld Sovereign Debt Notes for payment of marketers under Batches C1 (2) and D1 (2), after receiving the Sovereign Debt Statements from the PPPRA for the two batches.

The PPPRA, it was learnt, has also issued the Sovereign Debt Statements for Batch E1 (2), while Batch F1 (2) is scheduled to be issued by Friday.

A source close to PPPRA told THISDAY that the Executive Secretary of the agency, Mr. Reginald Stanley, has protested to the Director General of the DMO.

“If the DMO cannot pay for the arrears of 2011, they should start the payment of subsidy for 2012 to avoid fuel scarcity,” the source said.

It was learnt that a stakeholders’ telephone conference, which was anchored by the Managing Director and Chief Executive Officer of Access Bank Plc, Mr. Aigboje Aig-Imoukhuede, was held on Tuesday over the issue.

Imoukhuede is the chairman of the committee set up by the Ministry of Finance to examine the claims of arrears of subsidy for 2011 currently being made by the marketers.

A source close at the Ministry of Finance told THISDAY that the action was taken because “what they have budgeted for the payment of arrears of 2011 have been exhausted but more claims are still coming. Claims have overshot the budget and the minister has said that she will not embark on extra-budgetary spending".
NNPC accounts largely for the incoming claims as the corporation has continued to make claims for arrears for 2011.

But the spokesman of the NNPC, Dr. Levi Ajuonuma, told THISDAY that the Ministry of Finance was about to plunge the country into fuel crisis by misleading the government on the daily consumption of petrol.

“I want you to alert the nation that the Federal Ministry of Finance is about to plunge this country into fuel crisis and when this crisis starts, we know whom to hold. How can anybody say that Nigeria with a population of 167 million consumes 19 million litres of PMS daily? The Ministry of Finance made provision for subsidy based on 19 million litres pay day, instead of over 33 million litres, which the country is consuming. So, within four months into the year, they have exhausted the money budgeted for subsidy but instead of going to Mr. President to apologise for their mistake, they are looking for whom to blame. If anybody hides his head in the sand and play the Ostrich, the person will have himself to blame at the end of the day,” he said.

Ajuonuma stated that the Ministry of Finance has no right to deny anybody, who genuinely imported fuel in 2011 his claims, so long as the papers have passed the tests.

“There are ways of verifying arrears and once they are genuine, the Ministry of Finance must pay. They cannot deny the NNPC or marketers their genuine claims. The Federal Ministry of Finance must pay genuine businessman and women, whose papers have passed the tests,” he said.

“Are they not aware that nobody is bringing products into this country? The day this crisis will start, we know whom to hold,” he added.

Marketers, who spoke to THISDAY, stated that the banks were no longer granting them credit facilities to import fuel on account of their inability to pay outstanding credits for 2011.

This development, it was learnt, has the potential to plunge the country into fuel crisis, if not resolved urgently.

One of the marketers told THISDAY that the last allocation/import permit for 2011 was given to the marketers in December 2011 and the allocation took care of the first quarter of 2012.

“This means that the cargoes were coming in up to March 2012. For the cargoes that were imported in March, the government had 45 days to process payment and this spilled over to the second quarter of 2012 and we are yet to be paid. So, no allocation was issued in the first quarter of 2012,” he said.

A source privy to the stakeholders’ meeting held last week told THISDAY that the marketers aligned their views with the position of the PPPRA that the Ministry of Finance should start paying subsidy for 2012, pending when the issues of the arrears of 2011 are resolved

Govs Insist on Privatisation of NNPC, PHCN

Governor Chibuike Amaechi

By  Onyebuchi Ezigbo
Governors of the 36 states under the aegis of Nigeria Governors’ Forum (NGF) has resolved to support constitutional amendment that will facilitate a speedy unbundling of the Nigerian National Petroleum Corporation (NNPC) and Power Holding Company of Nigeria (PHCN).
The position of the governors were contained in a presentation made by the Chairman of the forum and Governor of Rivers State, Hon. Chibuike Amaechi,  at the retreat on the  review of the 1999 Constitution in Port Harcourt, over the weekend.
The governors’ position on NNPC comes against the background of a resolution by the House of Representatives, which recently adopted as part of the report of its Ad hoc committee on the oil subsidy regime, a recommendation urging government to restructure NNPC to make it more transparent and accountable.
“Everyday we hear of deregulation of the petroleum sector.  The truth is that nobody wants to deregulate. So, on your own you owe this nation a responsibility to break up NNPC even if it means putting it in the Constitution. When it stands on its own you can then remove it. Everybody is talking about deregulation, but nobody actually wants to. We need to deregulate. If it is not happening, please put it in the Constitution. The governors will support you,” he said.
Amaechi said it was baffling why we have agencies that do not obey the Constitution.
“The Constitution says all revenues accruing to the nation must be in the federation account. But because some people are above the Constitution, monies that are accruable to the country are not paid into that account. And the excuse they give is that the Appropriation laws passed by the National Assembly included a clause that says they can take their money upfront.
“Your laws cannot override the Constitution because you and I derive our existence from the Constitution. This is what they call the Rule of Law. That is why we ask, ‘should we keep NNPC the way NNPC is? Shouldn’t we tear it apart and make it a company, bold investors should come in? Should it become an agency of government?
The governor also spoke about the frustrating situation in the power sector where a state cannot distribute power generated from its facility due to the monopoly being enjoyed by PHCN.
“We have a total of 545 megawatts of power in Rivers State and nobody can feel power simply because you have made a law that empowers the Federal Government to distribute power alone,” he said.
So Rivers State has 545 Megawatts of power and we need just 400 Megawatts but can't discharge this power to our people,” he added.
“We have a total of 545 Megawatts of power in Rivers State and nobody can feel power? Simple: because you have made a law that empowers the federal government to distribute power alone,” he said.
He queried the rational for holding on to a regulatory framework which clearly retards development rather than accelerate.
Meanwhile, the participants In a communiqué issued at the end of the retreated presided over by the retired Chief Justice of the Federation, Justice Muhammad Uwais, recommended that the system of local government administration instituted by the 1999 Constitution should be reformed to guarantee the autonomy, efficiency and viability of the local government system.
The retreat was attended by the Speaker and the Deputy Speaker of the House of Representatives as well as eminent personalities and experienced resources persons.
Papers presented at the retreat covered several areas of interest in constitution amendment including: electoral reform; citizenship, indigeneship, and residency rights in the 1999 Constitution; immunity clause, accountability, and judicial reforms; national security and police reforms; federalism, local governance and political restructuring.
In the communiqué, participants held that the 1999 Constitution as amended did not fully address all the desired amendments by Nigerians and that current efforts to amend the 1999 Constitution should be geared towards responding to several other issues that are pending which will greatly impact on our democracy.
The communiqué further resolved that the present and future efforts to amend the Nigerian Constitution should take full cognisance of the gender implications of proposed amendments, and that the interests of women need to be particularly considered