Economy
Ngige Confirms FG Borrows from World Bank, Others to Pay Salaries
By Dipo Olowookere
Minister of Labour and Employment, Mr Chris Ngige, has confirmed that the federal government under President Muhammadu Buhari borrows funds from international sources to pay salaries of workers because of a shortfall in the country’s revenue.
Mr Ngige, while speaking on Sunday night on a programme monitored by Business Post on Channels TV, stated that the government takes borrowed funds from foreign institutions like the World Bank to offset some recurrent expenditures.
Last week, after the Senate resumed plenary, a letter from President Buhari requesting approval for fresh offshore loans of $4 billion and €710 million was read to the lawmakers by their head, Mr Ahmad Lawan.
This generated different reactions from various quarters. The government defended the borrowings, arguing that they were being used to develop the country, especially in the area of infrastructure.
In the midst of these, the Debt Management Office (DMO) said the nation’s total debt at the second quarter of this year stood at N35.5 trillion.
Some Nigerians had argued that the penchant for this government for borrowing was becoming unbearable, especially when the country was using about 98 per cent of generated revenue to service the debts.
But the government has maintained that the loans being taken by the federal government were not above the limit and that the projects being executed with the funds, including rails, were capable of generating revenue to repay them.
Next month, Nigeria will borrow between $3 billion and $6.2 billion from local and international investors through the sale of Eurobonds, adding to the debts already on ground.
While speaking on Sunday Politics anchored by Mr Seun Okinbaloye, Mr Ngige admitted that the central government truly takes funds from international lenders to pay workers.
“Talk in terms of something like the residency training funds; that money was appropriated in 2021. It was delayed because the President signed the supplementary budget [late] but because the resident doctors did not want to listen, they wanted the money to go into their accounts immediately, according to them.
“I told them, no, when the budget office explained [that] we don’t have this cash, the borrowing agencies [like the] World Bank and the rest will give us this money through the CBN (Central Bank of Nigeria (CBN) in Dollars and we change it to give to you, to pay you and others that are involved because we are funding the budget through some deficits.
“So, I will tell the budget office, expedite action, do this in one week because this is an emergency, these people are not accountants, they don’t understand and we put it down and the budget office rises up to the occasion, works day and night and put it out, Minister of Finance approves, AIE (Authority to Incur Expenditure) and the N4.8 billion is there, waiting to be disbursed.
“Give us the names of those to be paid and they bring (sic) their names through the post-graduate medical college and when the names come (sic), their parent body, which is the Ministry of Health discovered that there were names that were no resident doctors. So, how do you pay?
“Okay, they submitted 8,000 names, they have cleaned them down to 5,800, which means about 2,000+ are not resident doctors. How do you pay them?
“Further investigation, according to the Minister of Health, revealed that some of them are medical officers, senior medical officers, principal medical officers, who hold full appointments, some of them are not resident doctors but because they have been captured in resident doctors association, they want them to be paid; that’s wrong.
“We tell (sic) resident doctors, ‘give them more time to clean up’. They are cleaning it (the list) up, the money is there. So, I expected the resident doctors to go and help them clean up and submit the authentic list,” Mr Ngige said on the programme.
On Monday, while speaking on Politics Today with the same anchor, the spokesman of the President, Mr Femi Adesina, while asked if the government borrows for consumption, answered that the larger part of the borrowed funds is used for critical projects capable of boosting the economy.
By Adedapo Adesanya
Brent futures climbed $1.06 or 1.3 per cent to $83.55 a barrel on Friday amid ongoing uncertainty about the negotiations in progress that determine control of and reopening of the key shipping artery of the Strait of Hormuz.
In the same vein, the US West Texas Intermediate (WTI) futures finished at $78.18 a barrel after it chalked up 89 cents or 1.15 per cent.
Iran is reviewing a bill to ban American and Israeli vessels from the Strait of Hormuz, through which roughly a fifth of the world’s oil and liquefied natural gas normally passed before the war began at the end of February.
Market analysts noted that while this week’s signals on a potential deal have sent a roller-coaster ride in market sentiment, the market remains in the dark as to what needs to happen for the agreement to be clinched.
Part of the question being asked is whether the Iran-Oman agreement would allow a US-flagged vessel to transit the Strait of Hormuz or allow a vessel headed for an American port to go through.
Shipping through Hormuz remains heavily constrained as Middle East oil production is still well below pre-war levels while attacks on commercial vessels have continued even as negotiators discuss possible arrangements for the waterway.
Some also said that this week’s developments have signalled that hostilities between Iran and the US are not yet over. This is because the proposed deal is not easily workable because of sanctions and restrictive insurance clauses on any payments by the US government.
Iran is seeking fees of between 5 per cent and 7 per cent of the price of cargoes from ships using the strait, while Oman is discussing fees of about 3 per cent, while the Donald Trump administration wants no fees at all.
Citi has raised its third-quarter Brent crude forecast to $80 per barrel from $75 as the war drags on and repeated attempts at a deal fail to restore normal oil flows through the strait.
The bank still expects the conflict to be resolved, but the five-month war has lasted longer than Citi anticipated and kept more geopolitical risk in crude prices. Citi left its fourth-quarter Brent forecast unchanged at $70 per barrel and still sees the benchmark averaging $65 in 2027.
By Adedapo Adesanya
Nigerian businessman and chief executive of Dangote Industries Limited, Mr Aliko Dangote, has unveiled plans for a new phase of investments and acquisitions as the conglomerate pushes towards its target of generating $100 billion in annual revenue by 2030.
Mr Dangote disclosed this while receiving a delegation of senior executives from global investment banking and financial services firm Goldman Sachs, led by co-chief executive of Goldman Sachs International and Global Co-Head of Investment Banking, Mr Anthony Gutman, during a tour of the Dangote Petroleum Refinery & Petrochemicals and Dangote Fertiliser Limited complex in Lagos.
Speaking after the visit, Mr Dangote said the refinery and associated industrial facilities underscore the transformative impact of long-term investment in Africa, stressing that the group’s ambitions extend beyond its current strategic plan.
“No matter how we try to explain what we have built, you cannot fully appreciate it until you see it. But this is only the beginning. We need to look beyond 2030.
“The next phase of our journey will include new investments and acquisitions as we continue to scale the business,” he said.
He added that detailed internal modelling had reinforced management’s confidence that the Group’s target of generating $100 billion in annual revenue by 2030 was achievable.
According to him, the projections were based on conservative assumptions and had strengthened the company’s conviction to pursue an even more ambitious long-term growth strategy.
Mr Dangote also revealed that the strong participation of employees in the refinery’s recent private placement reflected growing internal confidence in the company’s long-term strategy and future prospects.
The Goldman Sachs delegation, after an extensive tour of the 700,000 barrels-per-day refinery, described the project as an extraordinary achievement.
“It is extraordinary what Mr Dangote and the whole organisation have achieved. The ambition, the scale of the project, the quality of the project and the culture of the people is very impressive,” the executives said.
According to a statement issued by Dangote Group on Friday, the delegation was led by Mr Anthony Gutman and included Mr Adib N. Zouein, Co-Head of EMEA Emerging Markets Regional Sales and Head of the Middle East and North Africa region for Global Banking & Markets Public; Mr Ryad Yousuf, Global Head of FICC Sales Strats and Structuring; and Mr Jimi Adesanya, Head of Sub-Saharan Africa Sales (excluding South Africa).
The visitors were received by Dangote; Group Vice President, Oil & Gas, Mr Devakumar Edwin; Managing Director and Chief Executive Officer of Dangote Petroleum Refinery & Petrochemicals, Mr David Bird; Group Executive Director, Oil & Gas, Ms Fatima Aliko Dangote; Chief of Staff to the President/CEO, Ibrahim Dikko; Group Chief Branding and Communication Officer, Mr Anthony Chiejina; Group Chief Economist, Mr Hassan Mahmud; Group Chief Strategy Officer, Mr Aliyu Suleiman; and Head of Administration, Dangote Petroleum Refinery & Petrochemicals, Mr Musa Bala, among other senior executives.
By Adedapo Adesanya
The Senate Public Accounts Committee has heard that Nigeria spent N1.16 trillion on fuel subsidy in 2021, while N1.20 trillion was deducted from federation crude oil sales proceeds during the same period.
The disclosure came from the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr Mohammed Bello Shehu, during the committee’s ongoing investigation into the 2021 to 2023 Nigeria Extractive Industries Transparency Initiative (NEITI) audit reports on the oil and gas sector.
According to the commission, crude and petroleum product losses cost N16.2 billion, pipeline repairs accounted for N22.05 billion, while strategic stock holding attracted N6.75 billion.
The revelations come against the backdrop of Nigeria’s long-running fuel subsidy regime, which successive governments maintained to keep the pump price of petrol artificially low despite mounting fiscal pressures.
Over the years, subsidy payments consumed trillions of Naira, significantly reducing revenues available to the three tiers of government and contributing to widening budget deficits.
The issue reached a turning point in May 2023 when President Bola Tinubu announced the removal of fuel subsidy during his inauguration speech, declaring that “fuel subsidy is gone.” The decision followed years of concerns over the rising cost of the programme, allegations of fraud, and repeated recommendations by fiscal authorities and international financial institutions that the subsidy had become unsustainable.
The removal triggered a sharp increase in the pump price of Premium Motor Spirit (petrol), leading to higher transportation and living costs across the country. In response, the federal government introduced a series of palliative measures, including cash transfers, support for mass transit, and wage-related interventions, while arguing that savings from the subsidy would be redirected to infrastructure, education, healthcare, and other critical sectors of the economy.
The commission also argued that the current method of calculating the 13 per cent derivation fund undermines the constitutional intention of the policy.
Meanwhile, the committee stood down the Niger Delta Development Commission’s presentation until next Wednesday to allow lawmakers review its submission.
The committee also expressed displeasure over the absence of the Auditor-General of the Federation, warning that he must appear before lawmakers next Tuesday or face compulsory appearance through the constitutional powers of the National Assembly.
