Okonjo-Iweala: Opens up on true state of Nigeria economy
| credits: File copy
Nigeria’s finance minister and co-ordinating minister of the economy, Dr. Ngozi Okonjo-Iweala, has responded to media stories accusing her of hiding the true and ‘shaky’ state of the Nigerian economy in public speeches, while stating the ‘parlous’ reality in a closed session with members of the Nigerian economic team.
Online reports had accused the minister of telling her colleagues in the Economic Management Team chaired by the President Goodluck Jonathan about the serious problems being faced by the economy, while painting a rosy picture in addresses made in the open..
According to a variant of the report: “At Tuesday’s meeting, a presidency source said, the minister painted a gloomy picture of the economy and hinted that there was an urgent need for “stringent budgetary measures” to arrest the downward slide.
“Although the meeting was convened to review the government’s plan to create 3.5 million jobs in the agriculture sector and consider the report of a subcommittee on the automotive industry, Mrs. Okonjo-Iweala could not hold back on the disturbing prospect of the economy.
“The minister explained that crude oil production now hovers around a disturbing 1.3 million barrels per day, a figure far lower than that seen during the height of the protracted militancy in the Niger Delta.
“The Nigeria National Petroleum Corporation, NNPC, had on April 18 reported a drop in crude oil production in the first quarter of 2013, January to March, which cost Nigeria a loss of crude oil revenue to the tune of $1.23 billion (N190 billion). That loss is now set to continue and the country might not be able to meet its obligation to its customers.
“Mrs Okonjo-Iweala also informed the meeting that crude oil theft had continued unabated and was at its highest level ever despite the best effort by government to stem the tide. Nigeria is estimated to lose about $6 billion annually to crude theft and the development, the minister lamented, is now severely hurting the economy.
“The administration has paid several billions of naira to former Niger Delta militants to guard oil installations and block oil theft. But if anything, the situation has worsened.
“At the meeting, the minister also predicted a further dip in national revenue following the increase in shale gas production around the world, a situation she said would definitely have serious adverse effect on oil prices and sales.”
Not true, the minister said and went on to debunk the report with the transcript of her presentation at the meeting.
Read the full report below:
A TRANSCRIPT OF THE SPEECH OF DR. MRS. NGOZI OKONJO-IWEALA, MINISTER OF FINANCE AND COORDINATING MINISTER OF THE ECONOMY, NIGERIA, AT THE MINISTERIAL PLATFORM HELD AT RADIO HOUSE, ABUJA ON MONDAY, JUNE 11, 2013
Thank you very much to the Honourable Minister of Information for that very rousing welcome and for hosting us for this event.
For my colleague, the Honourable Minister of Sports, I don’t think it’s coincidental that Sports and Finance are together today, because I’d always joked that if I was not the Minister of Finance, I’d love to be the Minister of Sports. So, I totally envy him in his job, especially now that we’re winning.
And to my colleagues, the Honourable Minister of State (Finance), the Perm Sec., and all the members of the audience here; I want to say that we’re going to handle our presentation in such a way that I will start up, pass to my minister of state and then he will pass back to me to round off. And I can’t start this without first acknowledging the support of the President to the Ministry of Finance. It’s not an easy ministry to run, as you all know. Nobody likes Finance because everybody likes to say they never have enough. So, we are grateful for the support. We are also very proud of our staff in the Ministry of Finance – the budget office, the Accountant-General’s office; and I want to thank them openly because, without their dedication and good work, we would not be able to accomplish what we have today. So, what I’m going to tell you, some of it you may have heard when Mr President presented his mid-term report and score card, but it bears repeating. And some will be additional expatiation on that; or new information.
I want to begin with what it is that the Ministry of Finance does. I want to remind people of our mission. Our mission is to manage the nation’s finances in an open, transparent, accountable and efficient manner that delivers on the country’s development priorities. There are four basic things we do in managing these finances and helping to manage the economy. The first is macroeconomic management. It’s the job of the Ministry of Finance, working with the Central Bank, to have a stable macro-economy. If there’s no stability, if things are moving, exchange rate is volatile, inflation is high – we have experienced it in this country before – what happens? You cannot even begin to think of development of the economy. So, that’s one of our jobs.
The other, of course, is managing the finances and mobilising finances for the real sector of the economy; meaning the other sectors that create jobs can grow. Then we also have the job of supporting enabling reforms that make this economy move. And finally, we have the job of supporting job creation indirectly and directly. So, we’re going to talk about what the Ministry of Finance does and has achieved in those four areas.
Let me start with something that we said during the mid-term report. The first is, on the macro-economy, I want to report that the economy is strong and stable. But of course, it faces challenge of inequality and inclusion; meaning that even though the economy is strong, we have problems with jobs and unemployment. We have problems with working to eradicate poverty. We need to move faster. We need to grow faster in order to tackle these problems. So, we are not saying that everything is solved, or that everything is great, but it’s strong; and that stability provides the platform on which we can use to solve the other problems.
What do I mean? We talked before that if you notice – everybody follows the exchange rate between the dollar and the naira – it has been relatively stable in these past two years at 155 to 160. At least, that is something you can evidence for yourself and attest to. It has been stable because we have also been able to accumulate reserves. People wonder why we are saving these reserves that are now almost $50 billion – we’re at $48 billion now. It’s very important because the reserves are what make the exchange rate stable. When the reserves are going down, that’s when you experience that instability and people can come and attack your currency. So, we have managed, working with the Central Bank – I also want to give them credit for good monetary policy – to be able to grow these reserves, stabilise, so that now, we have an exchange rate that can allow people to plan and allow people to do their work. As the Honourable Minister of Information said, inflation is coming down; from about 12.4% in May 2011, it has slowed to about 9.1% now and these all form the bedrock of this stability.
We have made savings. Part of our reserves is also the Excess Crude Account savings that we talk about. We have had about $4 billion in May 2011. We grew it to about 9 billion dollars equivalent at the end of 2012, and now we’re about $6 billion. Why are we down? Because the Excess Crude Account helps us to manage the economy and keep growing even when we experience shocks like when oil production comes down because of either oil theft, or leakages from pipelines and so on. You know, the money we have saved enables this country to keep going and we have enough to keep us going even in the face of shocks for another four to five months whilst we try to solve our problems. This is something that Nigeria did not have before and we are very proud of it. In the past, when we experience shocks, what did we do? We would have to go to the IMF or World Bank to go and look for money – the IMF in particular to shore up the economy, to shore up our balance of payments (that’s what economists call it). But now, even through all the ups and downs that we have experienced, have we gone there? No. Because Nigeria has now put itself – with the existence of this Excess Crude Account – in a position where in the event of any shock, we can go there to stabilise ourselves. That’s why Nigerians must support this account, the saving of this money; the Sovereign Wealth Fund. This country like a family must be able to put money aside so that if you experience shock, you don’t go around begging, you can stabilise yourself with your own savings. That’s what we manage to do.
The second thing I want to talk about is about GDP growth. This stability has enabled the economy to grow. Certain sectors are growing – I will come to that. Overall, this economy is growing and growth is projected at 6.75% by us; by the National Bureau of Statistics in 2013. Even the IMF has projected higher growth, but we’re being very cautious. Over there [referring to a slide], you will see how we compare with some other countries; with the whole of sub-Saharan Africa, they are growing at 5.6%, so we are much higher; even the emerging markets, we’re higher than them. And you can see Brazil, China, South Africa – South Africa at 2.8%, we at 6.75% et cetera – so we are doing well!
The GDP Illustration
Now, I want to spend one minute on something very important, because after we talk, people will say, “GDP growth, what is GDP growth? It’s not important; that’s not what we will eat.” But let me explain to you that without that growth, you cannot even begin to solve the problems of this economy. Let me illustrate to you. [She picks up a cake]. This cake symbolises our income, our GDP or your income within your household. GDP is nothing but the income of the country – the amount of cake you have to eat; you and your wife and children – the same with a country. So, let’s say this is the amount of cake we have to eat.
Now, these are four people sharing this cake – four people: a man, his wife and two children, or Nigeria with a population of let’s say 167 million people. So, this is the cake we have. You have this cake. Having this cake does not mean that every problem in your household is solved. Is it? It doesn’t mean that your income can now take care of all your relatives in the family who still have problems. It doesn’t mean that in your household, you don’t have problems of people not being employed, but you have this cake that you’re sharing. Now, what happens if we add three more people? Suppose, as a family, you marry another wife and you add one wife and three more children. How many are you now? (Answer: Seven). This is the cake. What will happen if this cake doesn’t grow? All of you will be suffering. Isn’t it? When you marry that wife and have more children, or even if you have four and you have another three or four; you will want your cake to grow. That is the same way we want GDP to grow – right? So, this is the first cake. What happens if the cake doesn’t grow is that all of you will start suffering. [She takes up another cake].
Supposing you now have a bigger cake; put all the people on top and you now have the seven people; would you not be better off? What if you have an even bigger cake? You see this biggest cake? You can put so many more people on top. [Speaking to assistants to collect illustrative materials: “give me all the people, give them to me, all of them will be there”]. And what will happen? That means you will have even more food. So, is it not false when people say that growing the cake does not matter? It matters; because if you have the same cake and your size is growing, what will happen is that you become even poorer and poorer; isn’t it? If it is not growing, you will suffer even more. Now, Nigeria has a cake – our GDP – and our population is growing at 2.5% per annum. If we don’t grow this, we will stay with the same cake and it will become worse and worse. So what we want to do is grow this cake as fast as possible, as large as we can, while solving the other problems. Note that I didn’t say growing the cake solves all the problems; but if we don’t grow the cake, we are going to suffer.
So, don’t listen to those who say, “What is GDP growth – it doesn’t matter.” It is not true; it matters tremendously. It’s with this growing cake that you can now call those people in your family or village who say you are not helping them. Isn’t it? If your cake is growing, you can call them; help them with their health problems, help them with food, help them with other things. But if you say cake does not matter, then you cannot help them at all. This is what GDP growth is about. I want Nigerians to understand this so that we don’t have this challenge of, “What is GDP?” In fact, we need to grow at almost 8 to 10 percent per year. In fact, Vision 2020 projects 13 percent in order to solve unemployment and other problems that we have. I’m sorry I spent some time on this, but it’s about time for the Nigerian population to stop being deceived by people who are not telling them the truth about what happens in the economy.
Now, let me quickly pass to other things. The first thing this country does, of course, is prepare the budget and everybody knows about it; to manage the finances and we have the DG Budget here. We’ve had problem with getting budget preparation done on time, and I want to say that for the first time, the 2013 Budget was prepared in record time and also passed by the National Assembly in record time on 20th December 2012, just before Christmas. Now, this should give us the year to implement; but of course, you know that we have some challenges with implementation and some things that we need to agree with the National Assembly in order to make the budget hold. For this year, we have been working on it but it has not stopped us from moving forward. We released first quarter capital – 400 billion; didn’t we? And work is going on. We released second quarter capital – 200 billion – so we will continue to implement to the best our ability, and it’s the job of Finance to make sure that we get that money in.
But the money that we get in also depends on what happens with the sectors of the economy. So, Finance does not print money. We don’t manufacture money. We only can disburse money that comes into our coffers; that the country genuinely earns from its oil and gas, from agriculture, from all the other aspects, the money it gets from taxes that it collects even on non-oil revenue and Customs taxes. So, once we get all those in, we disburse them. But if anything happens and we experience a shock, for example, this year, Customs is a little bit down in terms of collection because importation has come down, especially importation of rice; partly because we are growing our own, more of it as we said in the midterm report; but also because people stocked up last year in anticipation of what would happen. So, when we have these things happening, then the income reduces and Finance has to manage whatever comes in. So, I want people to know when they’re feeling very stressed out that there’s not enough money, Finance does not have money hidden somewhere in the safe; it is what it gets that it disburses.
Now, let me move quickly to one of the things we have delivered. Nigerians have complained that the cost of government is too high; we are spending too much on recurrent budget. What have we developed in Finance? With the support of the President and all of you, we’ve managed to take expenditures down from 74% recurrent of the total budget to 68% in 2013, and we’ll continue to take it down to the best of our ability. We have the envelope system. People don’t understand it but it enables us to engage other ministries and agencies in the management and setting of the budget. That allows them to put forward their priorities in a way that we can engage them in a conversation and to prioritise especially in terms of completing uncompleted projects of which we have about six thousand in this country and these are some of the systems that we’ve put in place to make that work. I talked a little while ago about the fact that imports are down. Whilst that means that some of our revenue are down, but we’re happy because we want to diversify this economy. Nigerians don’t want to keep importing. So, non-oil imports have decreased – things like textiles, plastic, rubber – things we’re making here; and those things have even increased in terms of exports. I’m sure that the Minister of Trade and Investment will say more about that. But I also want to mention our waiver and tariff policies to just let you know that Mr President has insisted on a policy of not doing individual waivers. So this ministry is doing sectoral waivers. When we give a waiver now, it is to encourage a whole sector not just to encourage an individual; and those kinds of policies; we’ve done them for aviation, for agriculture, for solid minerals. They can import spare parts and equipments at zero duty. And this is all designed to spur the rest of our economy.
Quickly, let me move on to talk about debt. On Friday, I think it was on the back page of This Day, I wrote an article about our debt because there are so many misconceptions about it. I want you to know that no one in government – neither Mr President nor the Ministry of Finance, the debt management office and the legislature – we don’t support that Nigeria becomes an indebted country again. So, what are we doing? The ministry is delivering a very prudent and strategic debt management approach to the country. I want you to look at some of the numbers. You know, we say that our national debt is low; and that is true because if you measure us against so many indicators you will see. If you look at that, you will see that domestic debt is really the issue. And if you look at the flow of domestic borrowing, you will see that it spiked in 2010 where we increase salary by 53% at once.
Now, I’m not against increase of salary, so don’t let anybody go from here and misquote me. But it has implications; and in order to cover it, domestic borrowing spiked. Bonds had to be floated. It’s not that good to borrow for things like recurrent expenditure and consumption. So, part of our new strategy is not to do that; to start lowering domestic borrowing. One of the things Mr President said to us is, we have to bring it down and we’re doing it. From N852 billion in 2011, we went down to N744 in 2012, and for 2013 budget, I think to N588 billion, and we’ll continue to bring it down. That’s part of the new strategy.
At the same time, we’re slowing down the growth of the debt stock. So, it’s not that the debt stock won’t grow, but it will grow much more slowly than before; and you can see it. The debt stock, total debt is now at about 7.5 trillion naira made up of 6.49 trillion domestic and about 1.0 trillion external and we will slow that down by trying to retire the bonds that are coming due instead of rolling them over at high interest rates. I’m very proud to say that in 2013 we retired 75 billion in bonds and that’s the first time we’ve done it in so many years. That is part of the overall strategy.
The last part is that we have also developed a sinking fund and every year we put in 25 billion in it so that we can continue to retire this debt and not grow it at a very fast pace. We will be borrowing, but it will be for very prudent things that really make a difference on the ground for Nigerians and it will be at a much slower pace. Now, quickly, the ministry has worked hard – Federal Inland Revenue Service, the Customs Service – to try and bring in more revenue into our coffers. And of course, they face challenges. We have to improve in terms of our tax collection and I want to tell you that we are launching a tax drive for non-oil revenue taxes to increase; and you will be seeing very soon, adverts from FIRS to push this on. The Customs is also modernising its operations with an objective to become a modern Customs system that can manage destination inspection and all the things that Customs does by the end of this year.
The objective is that we shouldn’t only look at the expenditure side all the time, we must also look at growing our revenues in the country; and this is what Finance has done.
I want to spend just one minute before handing over to my colleague on a few things that Finance is delivering to make public financial management more efficient and more transparent. We have to step away from the manual management of our finances whereby, for instance, for payments, we used to send money in bulk to ministries to pay their staff, to pay for their expenses. We have now put in place three electronic platforms that we are introducing and implementing at the moment. The Integrated Personnel and Payroll Management System is in place and it is allowing us to pay staff straight through biometric data means, we can check and pay them directly. Now, we haven’t done all MDAs; we’ve done about 215 and this exercise has helped us weed out about 45,000 ghost workers and save ourselves about 118 billion naira. That’s a lot of money.
Now, people say to me, where are these ghost workers and who is responsible? I just want to say here that we’ve looked and we’ve found that in almost every ministry, department and agency we had series of these ghost workers and it is identifying who to pinpoint, that’s what we’re looking at now. But it is very difficult because with people coming and going within ministries, it is not easy. The important thing we are facing is to get them out so we can save the money and put in place systems to make sure that this does not occur. That’s what Finance is doing.
We still have to complete the rest of the MDAs by the end of this year. We’ve also put in place a government integrated financial management system and, in the beginning, this has slowed down the transfer of resources to ministries. Bear with us, this will improve. But what this means is that transparently we can connect the MDAs, be able to see all our money and be able to pull it back. So, all those who may be contemplating this, I think you should revise your thinking because transparency is on the way.
Now, to stem leakages and improve our finances, we also worked very hard in the ministry to totally change the way we do business in terms of paying subsidies. We audited N1 trillion in subsidy payments under the presidential task force led by Aig Imokhuede, and we found N32 billion questionable. We have recovered N14 billion as we speak and we have tightened the payment process, so that there is more independent verification of how that is being done. The other thing the ministry has delivered is the cleaning up of the contributory pension scheme. This is something very painful to Nigerians that they would work and then people would steal the money that should be for their pension in their old age. This is not acceptable. So, to reform this, the President gave us permission to implement a section of the Pensions Reform Act which had hitherto been blocked; it had not been implemented, to bring all these pensions – the defined benefit systems – under one roof, under a pension transition administration department, and that will enable us to keep a hold on this fraud and to keep it at bay because these things will be managed under one roof transparently. The implementation of this is now underway.
The contributory pension scheme is fine, we have more than N3 trillion there, it’s working well and I want to reassure Nigerians of its good health. So, it’s only people who are still under the old scheme which we are reforming that are affected. We are implementing a more transparent system. Within the next six months, by God’s grace, we’ll have everything together with biometric systems in place so we can also pay our pensioners directly.
So, let me just say to you that all this, as was said by the Minister of Information, have been validated; all these things we’re doing, which amalgamate to underpin a stable economy have been validated outside. You don’t have to listen to me or Mr President or even the Minister of Information. Just check what the rating agencies are doing. Nigeria is one of the few countries being upgraded and rated as stable in an environment where other countries, including some close to us here in Africa, are being downgraded, and I think that Nigerians, even if you’re critical of government, you have to accept external evidence that we have a stable economy. The grading does not say that we’ve solved all the problems of our economy – no country ever does that – but it says that we’ve got the platform with which to do it.
Now, just before I hand over, I want to say one word on SURE-P, the subsidy reinvestment program. We promised Nigerians, at Ministry of Finance, that we will share with them the money that comes into this program transparently and what it is being used for transparently so that they will see because Nigerians were sceptical that this money will be put to good use. You can see on the screen. We have published every single month; we’ve kept faith with Nigerians. Every single month in the newspapers, we publish how much money comes in and you can see that; in 2012, N180 billion came in to Federal Government, the states got N154.6 billion, local governments, N76.4 billion. In January to May 2013, we have received N75 billion, state governments N64.4 billion, local governments N31.8 billion so far, and we have been publishing it.
And what has it been used for? We said, go and check for yourselves. We have used it for social safety nets for our women and children, to strengthen and improve immunisation for our children, to strengthen and improve safe delivery for our women. I know that no man here wants his wife to die; no woman wants to die in child birth. We have the names of every woman in every ward that has benefitted from this scheme. So, for those who say, “Ah, no one in my place has benefitted” you can verify it. We have it. If you want it, ask me. I will give it to you so you can check that people are really benefitting and they’re getting cash transfers.
When they come for pre-natal care, they get cash transfer of two thousand naira. When they come to have attended delivery, when the child is brought for immunisation; that is what we call conditional cash transfer program and, so far, in the present Saving One Million Lives program, more than 400,000 women’s lives and children’s lives have been saved through the money used by SURE-P.
In addition to that, we have been working on transportation and I know you heard from the Minister of Transport on roads and bridges built using this money; so I will not dwell on it. My intent was from the Finance point of view to just show you that we kept faith with Nigerians, we have been transparent, you can verify and we’ll be happy to give you all the information.
Let me now call on the Honourable Minister of State (Finance) to talk about the other things we have been doing in the financial sector.
Minister of State Takes Over
I am also not going to waste time. I am going to talk about what the ministry has been doing to actually ensure that we have reformed the financial sector. All the banks in Nigeria are fully capitalised. And we’re also happy today that the level of non-performing loan has come down to only 5%. Nigerian banks are the healthiest you can find in Africa and this has been shown. You remember 3–4 years back, most of the banks have reported losses, but today they are reporting profits that they never reported prior to 2008. And for those who have been following, the highest profit ever recorded in the history of Nigerian banking system was reported last year – N97.58 billion made by Guaranty Trust. You look at Zenith making 90 billion. Profitability has returned to the Nigerian financial system and people can now safely go and get finances.
The problem we have is the cost of borrowing. After now, interest rate is relatively high and we need to have lasting solution for it. That’s why we’re now restructuring and strengthening our development financing institutions so that they can give concessional loans to the critical sectors of the economy. To strengthen them again, the President set up a committee to look at how to solve the problem of development lending and we are going to establish a wholesale development finance institution that will be well capitalised which will lend wholesale money to the development institutions so that they can lend to the real sector. We are also inviting the private sector to come and invest in some of our development institutions. As you can see already, our infrastructural bank has some private sector and we are now trying to make sure that we get some private sector capital into that of agriculture.
Back to the capital market, last year, Mr President magnanimously approved forbearance to all our stockbrokers. Our stockbrokers are those who actually make the market perform and all of them have lost their capital. Most of the borrowing they did, they actually put in their money to borrow on the margin. They lost that investment. Yet, as far as the banks are concerned, they have to pay the nominal value of the debt while the real value of the shares that are underlying the debt are almost 20% of the loss they have taken. There is no way the capital market will actually progress with that kind of situation. Mr President magnanimously approved that forbearance and our stockbrokers are now healthy. They are now relieved of all these debts, they are now free to borrow more. And they’ve also regained confidence that yes, the Nigerian government can really support the stock broking companies, and you know that 60% of the money comes from international portfolio investors. Now, what we have done to our own domestic companies told them that we are really out to support our people. Therefore, they have more confidence in our market; money is now flowing.
From last year when we got the forbearance to date, the capitalisation of the market has increased by 70%. This has never been recorded anywhere. Everybody knows that in Nigerian insurance, you only do it under compulsion because people don’t have any confidence in the insurance sector. We know that this is a big problem and we went ahead to strengthen the regulatory authorities in order to bring sanity to the insurance sector. One thing we did in insurance, people just hook policies, report their own premium and declare profits where cash is not collected. So we came with No Premium, No Cover policy. At first, most of the brokers were not happy because the broker wants to make his money whether the man pays his premium or not. But today we say No, if you take insurance cover, nobody should recognise income unless cash is paid. So now, insurance is done on cash basis. Last year, we had a backlog of unpaid insurance of N55 billion; today, it is zero. All insurance are cash covered and that gives confidence to the policy holders.
When we came in, we had only 700 thousand. Now we have about 1.5 million policy holders and more equity is coming from abroad. We now have a lot of FDIs. About 10 companies have come into Nigeria and Nigerian companies can now even give insurance cover to oil and gas sector. There is 48% local retention of all the policies issued in that sector and this has actually improved our insurance industry and it will enable the industry to raise a lot of resources because in some countries, insurance companies have more money than banks. They even fund banks. We are encouraging our own so that they grow and we mobilise enough resources for investment in the real sector.
Another function we do is to ensure that all federally collected revenues are distributed to the three tiers of government according to the revenue sharing formula. In the past, FAC actually made it acrimonious; a lot of issues were there. We actually ensured that all outstanding issues that we met have been cleared. Today, when we come to FAC, we have turned it into committee where problems are solved, to committees where we educate ourselves, where we encourage others to copy the good practices of other states. We do peer comparison and we also ensure that we adopt the best practices and that’s why we’re just introducing the IPSAS – the International Public Sector Accounting Standards which all the states, parastatals and Federal Government are going to adopt so that our accounts are transparent and comparable to others. We have already ensured that we always hold FAC on time because holding FAC on time has a very serious implication on payment of salaries. And you know in Nigeria, unless salary is paid on time, workers are not happy. And you can agree with me that today, our workers are happy because we ensure that at least, Federal Government workers get their salary before 20th of every month and now with the electronic payment system, it is now – at least some get about 18th or 19th of the month and this has brought relative industrial harmony to Nigeria.
We also have a skill in the Federal Ministry of Finance for encouraging export of non-oil products. Before, few people know about the Export Expansion Grant. What we do, is in order to diversify the economy away from oil, all non-oil exporters get a grant based on the export proceed that they expatriated back. So, if you now produce anything non-oil and export, when you bring the money back we calculate based on certain parameters and you can get as much as 20% of the value of your export being given to you free by the government. Why are we doing that? It is because the cost of production in Nigeria is higher than the cost of production internationally. So, we have to make up for the cost of production to make our own manufacturers competitive. We have been doing that, yet we have some glut. We have the glut because growth in export has been growing very fast and we have to revise the system. We have parameters we have actually looked at and we realise that export growth is no more our problem in Nigeria because the target we set for our exporters; 71% of all exporters are growing higher than 10% every year. So, that has been solved. Re-investment of export growth; also 68.9% of our exporters are re-investing the money they get from the bank to develop their own companies. So, that is not also our problem.
Today in order to get the EEG (export expansion grant), you have to do well in the area of employment and you have to do well in the area of value addition. We are now reducing the weight for export and retention because we have already succeeded there. I think I will call on the CME to continue.
OK. Let me round off very quickly for Finance, because Minister of Information is telling me we need our own day. Let me just mention a couple of other areas quickly. The ministry supports; we are of finance but we’re also about making sure that the real sectors of the economy work. So in addition to the budget which we manage, we also have the task of mobilising resources for the sectors of the economy and I’m not going to go through all that I wrote; they can quickly roll it through the screen.
I’m very proud to announce that we have been very active to mobilise – sometimes zero interest – very low interest concessional financing for our sectors; money that is zero interest, 40 years to repay, 10 years of grace – the type that you cannot find easily anywhere. So we have been very careful to do that and 12 billion dollars worth, almost every sector. Agriculture – from China Exim Bank, from the World Bank, we have mobilised money. Environment: 450 million from the World Bank for environmental issues; transport. You know, we’re doing even guarantees so that we can have some of our infrastructure developed; for example, a letter of comfort to develop the Lekki deep sea port. So when you see all these things being developed, you know that Finance has done some work to make resources available or guarantees that make it work. Second Niger bridge – we’re now working on a private-public partnership arrangement where we’re going to co-invest with some investors that have been identified from outside with PPP to make sure that this bridge gets built. As we speak, they’re already on site trying to do some of the initial groundwork. We work with the World Bank, the African Development Bank, the Islamic Development bank and other banks to try to make this happen.
So, you can see, in health, in power, we are going to go to the market very soon to raise a Eurobond of about a billion dollars for the power sector. We know that power is what we need in this country; that’s what we have focused on. So, all that money will make gas available to fire the power and the emergency gas plan of the Minister of Petroleum Resources has already been yielding results in terms of making gas available to make our power situation better. But we want to support them to improve even more. So, we raise resources for that.
And the education sector – we’ve also raised money for states that have challenges: Bauchi, Ekiti, Anambra – so many of the states to benefit from that. In ICT we’ve raised resources. And aviation, housing – I can just say almost every sector of the economy – I’m proud to say we’ve done that. The Nexim Bank has also used resources to support trade for our economy; export-import bank which is under the Ministry of Finance. Let me just mention one interesting thing. We have supported the empowerment of women in the ministry through devoting some resources – 3 billion naira – to specific programs in five pilot ministries like Agriculture, Health, Water Resources, ICT and so on that focus on works, focus on delivering for women. For example, the Ministry of Works said that they will make more women contractors, sub-contractors. They will increase the number that will get contracts and jobs because women are not favoured and we have said that when they do it, we will support them with additional disbursement from this N3 billion. So we are encouraging support for women within this budget and that is something that the President really supports. So, these are some of the things we are doing.
Finally, we are supporting job creation. We are managing some job creation programmes apart from what we are doing for the real sectors of the economy, mobilising money for them in addition to the budget to create jobs like the 3.5 million jobs targeted by Agriculture in 2015. It’s the resources we help mobilise that will help them deliver that. But we are also managing some direct job creation being undertaken and implemented by government. Just a couple of examples which you know – we have the program that was mentioned by the Honourable Minister of Information, the YouWIN program of Mr President – this is his program – and I’m happy to tell you this is one of the most popular programs in Nigeria. From the first round we did, we have already created 14,000 jobs all over all parts of the federation. This is just the first survey. The second survey, maybe another 14,000 – that’s almost 30,000. The second round we just launched for women only and the third round we’re going to launch for men and women, the target of 80,000 to 110,000 jobs is easily reachable.
This program is surpassing our expectations in terms of job creation and we’re very proud of our young entrepreneurs who are doing this. We are also managing the Graduate Internship Program. Our objective there is to place 50,000 graduate interns with private sector. Over 1,000 private sector firms have applied. We have placed so far 1,309 graduates and we’re working very hard to speed up to place all the 50,000 who have been processed as qualified to participate in this scheme. And of course, we were previously supporting the community services program designed to create 370,000 jobs a year. We’ve moved that to the ministry of labour now, but I want to tell you that 178,000 jobs have already been created. And people who have seen these people working in the field, building ditches, doing drains, maintaining buildings have reported that they’re there and the jobs are real. So, these are some of the things that we have tried to do within the ministry to support the job creation agenda. I could go on and on.
We actually need more time but let me just stop here and say that Ministry of Finance is a multi-faceted ministry that is delivering day by day on the budget, on the additional finances for the sectors of the country, on managing direct job creation programs and on supporting the sectors – I haven’t even told you the things we do to support power through the bulk trader, to manage the debts of NEMCO, to push the various sectors along. We are doing so much more than we have time to share today and we are achieving results.
Thank you very much.”