Oil doom: Nigeria caught in web of international politics – Ita Enang

***Akwa Ibom is like under receivership

Senator Ita Enang represents Uyo Senatorial District of Akwa Ibom State. A Peoples Democratic Party (PDP) chieftain, he is one of the strongest voices at the senate. In this interview with ENO-OBONG OKON, he speaks on national issues as it affects Akwa Ibom State now and in the future. Excerpts:

The last time you were here you spoke about salaries of workers in Akwa Ibom State. It has now been paid?

I want to congratulate Akwa Ibom people; the workers and I urge them to bear a little more because it won’t continue to be like that. Only part of it has been paid, and part is still outstanding.

What percentage has been paid? Is it greater than what is left?

A great part is left. The schools have said; look, you have paid us some, you owe us some, so we will open the schools but we will not teach fully until you fully pay us. All these are going to count during the elections. Of course there is another thing that is outstanding; the pension funds deducted from salaries have not been paid.

What effect will this have on students?

I think it is very dangerous to the educational situation in the country right now. Akwa Ibom students and pupils are going to take national examinations and it doesn’t matter whether your state was on strike or not. It is going to affect your students in the National Examination Council (NECO) or the West African Examination Council (WAEC).

Any news as to when the salaries would be fully paid?

They will not be able to say, but I am sure that the situation is not going to be a lot better because the level of earnings of the Federal Government into the Federation account and by extension what comes to each of the state is going to be lower now because of the budget benchmark, and rise in other variables.

Based on what you have just said, I do know that as at January, the budget actually stood at 4.7 trillion naira and then it was N190 to $1, and also $65 per barrel for the oil bench mark. But as at last week, it has dropped drastically. How will this affect the economy?

Before you pass the budget, you have to have what we call the medium term expenditure frame work. The expenditure frame work tells you the amount of money you are likely to have, the sources of money you are going to have, the estimated amount you are going to have from oil, how much you are going to have from the non-oil, how much you are going to have from taxes, and how much in total will be your money. This is when you decide if you will borrow and then you also have the debt profile which shows you how and where you get money to fund the budget.

Mr. President submitted a medium term frame work at an exchange rate of N163 to $1, and he also submitted the oil benchmark at $65 per barrel of oil, and a quantum of production of 2.3 million barrels a day. Nigeria is a mono economy that is almost solely independent on oil. I raised the issue that Nigeria should not only be depending on oil at this time; that oil should just be like reserve. That we should begin to think like Delta State: Delta without oil, we should start thinking of Nigeria without oil. I raised the issue that there is over concentration in oil whereas there are solid minerals under the ground of the entire northern Nigeria, even some part of southern Nigeria, including Akwa Ibom State. If you go to Nasarawa State, you have a quantum of all other minerals, go to Enugu State, they have coal, but we have abandoned coal, we have gold in Kebbi, Sokoto, and part of Jigawa and other things underground. In the west, in Ondo you have bitumen. Why is everybody thinking about oil? Now that oil has ceased to be important, we are going to do solid minerals. So we should have been expanding. I drew attention to the fact that oil is becoming unimportant in the world. There is a conspiracy by the west; the United States and a greater country of the west.

Why would you say that?

Because Nigeria is almost not selling even a single quality of oil, I think our trade record is almost at zero between Nigeria and the United States. We are now looking for other countries of the east and Asia for our market. United States is not buying because one, they are buying from other countries; they are relying on their oil and other quantum of productions. But the cost of producing is so high therefore the Arab oil producing cartels now reduce the prices of their oil so that whatever happens, the United States will produce less because the cost of producing in the United States is very high. So if they reduce the price here, people will be forced or interested in buying from the Arab countries, because the cost of production is low, and then the cost of the oil itself is low compared to the high cost of production itself. So Nigeria is caught in the web of international oil politics. Therefore with the price coming down, we have to adjust the budget bench mark because oil sometimes go as low as $41 per barrel. So we decided to keep the benchmark at $52 per barrel.

Another problem is that we have dollarized the Nigerian economy that you see that in shops and other places, you see people trading with dollar, which is an offence. That is why I brought sometime in 2011-2012 a bill to criminalize the spending of the dollar in Nigeria unless you are a Bureau de Change.

You said that this was a celebration budget as at when it actually came up. Why?

I said I am celebrating the crash in the price of oil because its going to send all of us back to thinking. We had an economy that ran on coal. First it was concentration of groundnut, and we did not diversify. I also celebrated the crash in oil because it is going to make it possible for us to work because what makes life in Nigeria more difficult is that we draw raw crude, send it abroad to be refined for you, it is imported back for you, you pay export and import duties and then that is what increases the price of refined products like diesel, kerosene and petrol. I said that it is going to encourage us to work on the local refineries, which I have always called private refineries while others prefer to call it the illegal refineries.

What effect will it have on Akwa Ibom?

We are not likely to have excess crude money coming into the state any longer. Two, last year’s budget was at the rate of $77 per barrel trade mark, and this year, we are budgeting at $52. So the amount of money is going to be less by about one third that is going to every state, every tier of government. This is going to have effect on Akwa Ibom state. So as much our debt is going to affect, capital projects flow is going to be affected, and then, I think money is going to have value again. So if you don’t have money from taxing the companies, taxing the workers who work in those states, and then not much money is coming from the Federal Government, then you will have to hold your head with your two hands and think on what and how to do to earn money to run the government.

Let’s look at the excess crude account. You said the federal government and the National Assembly deleted the provision which was incorporated into the 2014 appropriation bill that money should not be spent except it is authorized by the Appropriation Act?

I definitely accused the minister of finance and the Director General of the budget office of the federation because they are responsible for this. It was deleted from the Appropriation Act, and I told them that it is not deleted from the constitution; that any money that gets into the federation account should be shared between the states. We have money that is called excess crude, the states meet to share and the state government would take their own to the house of assembly, the  Federal government will keep part of it; their own share. There will be spending, and so that is misapplication, misappropriation. The federal government cannot get that money and spend without telling the legislature what you are spending on, because you are spending money which is not appropriated.

Let’s go back to talking about the effect of the debt on the state. What exactly are they?

Well, there is what we call the foreign debt and local debt. The local debts of the state include the money that we go to the bank and took for certain projects. I think that Akwa Ibom State House of Assembly should really examine the debt situation of the state and find out what it is going to leave to the next government. I am afraid that at this stage, Akwa Ibom is like under receivership because most of the obligations are not able to be met.

Are you talking about succession?

I am talking about the succession arrangement. Therefore I urge the people to look at the political parties and then vote for the party that has the neutrality and not the party that wants to succeed so that it can auction the state or hand over the insolvent state to the auctioneers.

Do you think that it could have been possible that Akwa Ibom State would have rid itself from this debt owing the fact that we are from the state that gets so much allocation?

That is the surprise. When you put Akwa Ibom alone, and consider Abia, Anambra, Ebonyi and Enugu state, Akwa Ibom still takes more than the five states. I think it was over ambition at that time. I think we might not have anticipated that the level of revenue would go down. I think we overpriced projects and we are paying for it. For instance, the federal government is awarding a road of 250 kilometre, Akwa Ibom will award for about 1.5 billion, and that is part of the reason we have not been able to get paid by the federal government because the pricing of our projects for federal roads is far away and out of the destination of the federal government. And so when you present your bill, it is not easy to be honoured. We also have a situation that whatever is refunded, after it is refunded by the federal government, we don’t hear of it and you don’t know what is done with it. This is the kind of situation that is putting the state as an insolvent state that we are almost going for the auctioneers.

Advice to the people of Akwa Ibom on this particular situation?

I want to say that when they go to the polls, they should not allow the continuity of the current state and party, and by succession of the government to the defective, they have to vote for another political party and a different government so that they will be out of the situation. They should not again vote for the PDP in the state, they should vote for the All Progressives Congress (APC).