NEC hears how Ghana, others rip off Nigeria

■ How NEC and Economic Advisory Council (EAC) will synergise, by Osinbajo

Nigeria has lost over N472 billion in oil revenue in six months, and the figure may climb to nearly a trillion by year’s end. Worse, neighbouring Ghana, that will not stop denigrating and persecuting Nigeria and Nigerians, along with others, are complicit in this huge revenue loss.

According to an ad-hoc committee headed by Gov. Godwin Obaseki of Edo State, set up by the National Economic Council (NEC), chaired by Vice President Yemi Osinbajo, the losses were through the smuggling of crude oil.

A comprehensive report to Thursday’s NEC meeting of Governors stated NNPC reported a loss of 22.64 million barrel of crude oil valued at USD 1.35 billion for 2019 half-year; and possibly USD 2.7 billion for a full year at a global oil price of USD 60 per barrel, if not checked.

“The losses were recorded on the following pipeline:
a.   Nembe Creek Trunk Line (NCTL) – 9.2 million barrels
b.  Trans Niger Pipeline (TNP) – 8.6 million barrels
c.   Trans Forcados Pipeline (TFP) – 3.96 million barrels
d.  Trans Escravos Pipeline (TSEP) – 877 Thousand barrels,” the report said.

It blamed the losses on the absence of governance structure for the pipeline such that no one is held accountable whenever there is a breach on the lines.

Other reasons are:- Slow and inadequate prosecution of oil thieves, despite numerous arrests and seizures.

– Absence of petroleum products filling stations in most oil producing Communities that make them resort to illegal bunkering and refining

– Huge internal and external markets of stolen crude oil which include Ghana as well as some neighboring countries.

The Obaseki committee recommended the restructuring the maintenance of all pipelines as a way of tackling the perpetrators of oil theft as well as a legal framework that will ensure every criminal is duly prosecuted, imprisoned and all assets confiscated.

Other recommendations are:

▪ the setting up Special Courts to try offenders, set-up of Legal Task Force to coordinate the prosecution of arrested offenders as well as train special judges to handle cases of oil theft.

▪ NNPC to engage the National Intelligence Agency (NIA) to identify markets for the stolen products.

▪ Governors of the oil producing states to step up actions to develop their communities with their 13% derivation allocation as well as implement programmes that will be impactful to make life easy for the people. They should also create employment opportunities for the youths in these regions.

▪ Propose a funding arrangement to be jointly funded by the Federal, State Governments and oil companies.


Meanwhile, in response to a request for clarification by members of the National Economic Council (NEC) regarding its relationship with the newly announced Economic Advisory Council, EAC, Vice President Yemi Osinbajo, SAN, has said both councils are for the benefit of the President.

Prof. Osinbajo spoke at the 97th NEC meeting today at the Council Chambers.
“If NEC wants to be briefed regularly by the Economic Advisory Council, EAC, we will request the President to do that,” the VP explained to the Council observing that such interaction will promote synergy.

Below are detailed highlights of NEC deliberations as released from the Office of the Vice President:

NEC (5TH IN 2019) 97TH NEC MEETING – THURSDAY, 19TH September, 2019   

UPDATE ON THE NATIONAL LIVESTOCK TRANSFORMATION PLAN BY THE GOVERNOR OF EBONYI STATE, DAVE UMAHI, CHAIRMAN OF NEC TECHNICAL COMMITTEE ON THE NLTP

The chairman reminded NEC that the Committee was to address the 
Farmer/herder crisis

The Committee presented a National Livestock Transformation Plan 2019 – 2028.

The Plan is not targeted at only cows but a holistic strategy to address animal husbandry.

The Plan has six pillars:

▪Conflict Resolution

▪Justice and Peace

▪Humanitarian Relief and Early Recovery

▪Human Capital Development

▪Cross cutting issues

▪Economic Development

The Committee proposed an implementation guideline to guide FG and States

N100 billion has been budgeted to support the project.

FG is to contribute 80% in grant to support States, while States will contribute land, project implementation structure, personnel and 20% cost of the project.

Council Resolution

Need to look at the Trans-Human West Africa Regional Protocol – because the country cannot allow such movement of cattles without registering and monitoring them

Council emphasised the need to establish the fact that NLTP is a creation of NEC and State Governors  and is completely distinct from RUGA.

NEC adopted the National Livestock Transformation Plan on January 18, 2019.  It is a creation of the National Economic Council.

States will determine, whether or not they are willing to participate, as FG did not impose this plan.  Participation remains voluntary.

The role of the FG is to coordinate, monitor and help implement the plan.

 UPDATE ON ACCOUNT

        Honourable Minister of State for Budget and National Planning reported to Council that balances in the underlisted accounts as at 17th September, 2019 are as follows:

EXCESS CRUDE ACCOUNT (ECA)       = USD 274, 583, 856 .78

STABILIZATION ACCOUNT                    = N23, 796, 349,487.76

DEV. NATURAL RES. ACCT FUND        = N105, 135, 613, 817.27

UPDATE ON BUDGET SUPPORT LOAN FACILITY

The Honourable Minister of State also briefed on the Budget Support Facility that State Governments are expected to start servicing from September 2019; and repayment is over 240 months.

Council resolved that Governors should meet with the Ministry of Finance and Central Bank of Nigeria to sort out the details of repayment modalities and the Vice President will ensure same and ensure the meeting between the Governors, CBN and Finance Ministry in order to facilitate the speedy resolution of the matter.

UPDATE ON THE PRESIDENTIAL ENABLING BUSINESS ENVIRONMENT COUNCIL (PEBEC)

The Secretary of the Presidential Enabling Business Environment Council (PEBEC) Dr. Jumoke Oduwole gave an update on building an Enabling Business Environment. She informed Council that:

▪There is currently a reform wave in African countries, as contained in the African Development Bank (AFDB) Economic Outlook Report released in January, 2019.

 ▪That in the 2019 World Bank ease of doing business ranking, Nigeria is ranked 146 with Micro Small and Medium Enterprises (MSMEs) making up to 90% of Business in Nigeria.

▪That the Economic Recovery Growth Plan (ERGP) 2017-2020, which has three broad objectives; which includes restoring growth; Investing in people and Building a competitive economy has positioned Nigeria in the path of building a competitive economy.

▪That PEBEC is mandated to make Nigeria’s ranking to top 100 in the 2020 World Bank Doing Business index.

▪ Achieve the required political buy-in across all arms and levels of government.

Furthermore, she told NEC that PEBEC has in the past 3 years achieved the following:

▪Moved up 24 places in the World Bank Ease of Doing Business ranking

▪32 Nigerian states, led by Kaduna, Enugu, Abia, Lagos and Anambra states have improved in their ease of doing business environment.

▪An independent EODB survey adjudged Nigeria’s reforms as impactful in terms of reduction in time, cost and procedures of doing business.

REPORT OF THE AD-HOC COMMITTEE ON CRUDE OIL THEFT,
PREVENTION AND CONTROL PRESENTED BY GOVERNOR EDO STATE

The 13 member Ad-Hoc Committee which is chaired by the Governor of Edo State, Mr. Godwin Obaseki, in their report, told the Council that the Committ ee is constituted to address:
 i.        Impact of vandalism, oil theft and illegal bunkering on oil production;
 ii.        Effectiveness of the activities of the JTF and other Security Agencies
 iii.    Consider the set-up of Special Courts to prosecute offenders, among others.

The Terms of Reference of the Ad-Hoc Committee is to include:
·        restoring and sustaining the three major pipelines;
·        assessing the challenges and draw up a roadmap to guide further actions towards finding a lasting solution to the problem;
·        co-opt individual or corporate body to facilitate the work of the Committee and update the Council regularly.
– The Ad-Hoc Committee in its findings discovered that there were losses. NNPC reported a loss of 22.64 million barrel of crude oil valued at USD 1.35 billion for 2019 half-year; and possibly USD 2.7 billion for a full year at a global oil price of USD 60 per barrel, if not checked.
– The losses were recorded on the following pipeline:
a.   Nembe Creek Trunk Line (NCTL) – 9.2 million barrels
b.  Trans Niger Pipeline (TNP) – 8.6 million barrels
c.   Trans Forcados Pipeline (TFP) – 3.96 million barrels
d.  Trans Escravos Pipeline (TSEP) – 877 Thousand barrels.

– Absence of governance structure for the pipeline such that no one is held accountable whenever there is a breach on the lines.
– Slow and inadequate prosecution of oil thieves, despite numerous arrests and seizures.
– Absence of petroleum products filling stations in most of its oil producing Communities that make them resort to illegal bunkering and refining
– Huge internal and external markets of stolen crude oil which include Ghana as well as some neighboring countries.

The Committee made the following recommendations to the Council:
i.  The need to restructure the maintenance of all pipelines as a way of tackling the perpetrators of oil theft. 
ii.  Have a legal framework that will ensure every criminal is duly prosecuted, imprisoned and all assets confiscated.
 iii. Setting up Special Courts to try offenders, set-up of Legal Task Force to coordinate the prosecution of arrested offenders as well as train special judges to handle cases of oil theft.
iv.  NNPC to engage the National Intelligence Agency (NIA) to identify markets for the stolen products.
v. Governors of the oil producing states to step up actions to develop their communities with their 13% derivation allocation as well as implement programmes that will be impactful to make life easy for the people. They should also create employment opportunities for the youths in these regions.
vi. Propose a funding arrangement to be jointly funded by the Federal, State Governments and oil companies.

Council Resolution

Council resolved as follows:

Recommendations given will be presented to the President who is also the Minister of Petroleum for the final decision and implementation.

The Chairman of Council also asked NNPC to make a presentation to the Council on the state of PMS and smuggling across the borders.

ANY OTHER BUSINESS

Governors requested clarification from the Council Chairman on the relationship between NEC and the newly formed Economic Advisory Council.  The Vice President explained that both Councils are advisory for the benefit of the President, while NEC is established by the Constitution.  The Vice President added that NEC could be briefed regularly on the activities of the newly found EAC with the permission of the President.