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Why Poor State of Roads Persists Nationwide -Fashola

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By Mathew Dadiya, Abuja

The Mjnister of Works and Housing, Babatunde Fashola has attributed the inability of Federal Government to address dilapidated roads across the country to none release of budgetary funds by the ministry of finance.

 

Fashola explained that most contracts failed due to under budgeting and poor funding.

Speaking to State House correspondents after the Federal Executive Council (FEC) meeting chaired by President Muhammadu Buhari on Wednesday, he lamented that no dime has been released to his Ministry from the 2019 budget.

He lamented that his ministry hardly accessed adequate funding to perform its statutory mandate hence the littering of uncompleted and abandoned projects across the country.

The mjnister’s explanation came amidst claims by the National Assembly, that about 20,000 abandoned projects litter the country.

Debunking the allegation Fashola recalled that when the Buhari administration came into power in 2015, it concentrated on completing all abandoned projects rather than initiating new ones so as not to forestall development, adding that only N18billion was allocated for works in 2015 budget.

He said that the decision has seen the government making efforts to complete ongoing road contracts left behind by its predecessors despite budgetary constraints.

Fashola said while the public misconstrued the challenges, the progress that has been made seems delayed because some of the projects including newly initiated ones suffered set back due to lack of community support, over-blotted compensation sums submitted by the public and lean budgetary provisions which, most times were not even accessible.

He said that despite these constraints, government never felt deterred, it has been reviewing cost of on-ongoing and abandoned projects to make them viable for completion.

“Today, two of the approvals were to revise the estimates of cost to enable contractors continue work.

“Council approved N519 million revision of contract of Oba – Nnewi – Okigwe Road to cater for change in cost of materials since the project was awarded in 2009. The contract sum revised from N3.7billion to N4.3 billion.

“The second contract that had a revision of estimated cost, is the 67 kilometers Alace-Ugep road in Cross River state, Council approved a revision from N9.16 billion to 11.22 billion, the revised cost is N2.052 billion.

“Council approved the change of contractor for the Chachangi bridge linking Takum and Wukari in Taraba State and re-awarded it at the cost of N2.132 billion.

“Katsina-Ala bridge was also approved at the cost of N3.576 billion, which include total bridge repairs, changing of expansion joints, changing of bearings and rehabilitation of the 3.2 kilometers access road at Ugbema junction in Benue State,” the Minister explained.

The minister further disclosed that despite the increased budgetary provision for the ministry of works from N18 billion in 2015 to about N300bn in 2016, 2017, 2018 and 2019, ”we still can’t find the money to implement the projects, we need community support as well.”

He also lamented that the ministry wasc faced with a challenge of over N10 billion compensation for the second Niger bridge.

”There is a very clear distinction doing a project that is uncompleted and a project that is abandoned. They mean two different things. If you ask me you say there is a report about 20000 abandoned projects, my ministry doesn’t have 20000 projects.

”One of the things we have done including what we have done today finding out why projects have not been completed in some cases the rates have become obsolete so the price of cement has changed, the exchange rate has changed, inflation has gone into the quantities in which it was awarded before we came. So we are trying to resuscitate some of those projects because we know that the contractors will not go back to work if the pricing is not right, that is one thing we are doing. 

”It is the government policy to ensure that we complete as many projects as possible. Unlike in the past, this government has focused on completing projects. 

”In addition to that, we have increased the budget size so the budget size for all of the Nigerian roads in 2015 was N18 billion. So those are accumulations that we now have to manage and overcome was as a result of under budgeting and under funding. 

”Now there is a distinction, we have increased the budget to roughly about N300 billion but we still can’t fund the N300 billion. 

”So when we get the approval that is the one half of the story, the other half of the story is that we don’t get all of the cash. So your investigation must include how much is being released against how much is being approved in the budget 

”There is yet another problem, the local communities, we are having problems there too. We have problem I think in Sapele-Ewu road, youths, community, compensation issues. Immediately we mobilize to site, people build all sorts of things within the right of way and file all sorts of claims for compensation. 

”When you look at how much you have to pay for compensation and how much you have to spend on the roads you begin to do your maths very carefully. So we need community support as well. 

”People who want infrastructure must also reasonably be willing to sacrifice. The amount we are facing now in claims in compensation for Second Niger Bridge is already in excess of N10 billion, just for compensation for land and all of that. 

”Now you hear the Minister of Finance, you hear everybody saying we need to raise money to fund infrastructure; there is a gap between our infrastructure needs, our commitments to respond and our income. So we have to fund a deficit. 

On one hand there is another side of the debate that is saying the country is borrowing too much so these are the challenges.”

Economy

Nigerian Banking System is Stable, CIBN Assures Nigerians

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The Chartered Institute of Bankers of Nigeria (CIBN) on Wednesday reassured Nigerians that the banking system remained “safe, sound and resilient,” dispelling fears of bank liquidations.

Its president, Prof. Pius Olanrewaju, gave the reassurance in a statement in Lagos to correct misinformation and fake news that licence of more banks would be revoked.

Olanrewaju emphasised the importance of clarifying rumours that additional bank licenses would be revoked, following the regulatory action taken by the Central Bank of Nigeria (CBN) against Heritage Bank Plc on June 3.

“We would like to allay the fears of bank customers and the general public that the assertion is false and misleading.

“The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) have debunked the claim,” the Chairman of Council, CIBN, stated.

He added that the ongoing recapitalisation process announced by the CBN aims to further strengthen the resilience of banks and their capacity to support the growth of the Nigerian economy.

“Consequently, we urge the public to continue conducting their banking services without hesitation or apprehension,” Olanrewaju said.

According to him, CIBN is committed to promoting best practices and ensuring that the sector remains safe and sound, in collaboration with other stakeholders in the ecosystem. (NAN)

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Business News

FG Secures Investment Commitments of over $30bn Across Sectors-Minister

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The Federal Government  has secured investment commitments of more than 30 billion dollars across different sectors of the economy.

Dr Doris Anite, the Minister, Industry, Trade, and Investment (FMITI), said this during her presentation at the Ministerial Sectoral News Conference to mark President Bola Tinubu’s first year in office  on Tuesday in Abuja.

The News Agency of Nigeria (NAN) reports that her presentation was titled “Unlocking Trade and Investment to Achieve Renewed Hope Agenda “- Key Achievements and Contributions of the ministry.

Anite said Nigeria’s investment landscape was now witnessing a significant influx of foreign capital, aligning with the Renewed Hope agenda  Tinubu.

She said in addition, the ministry was taking decisive and structured steps to attract capital investments, which would transform the nation’s homegrown enterprises and industries into global players.

“We have concluded stakeholders’ engagements with our domestic private equity and asset management firms towards the inauguration of an Investment Mobilisation Initiative aimed at increasing local and foreign investment as a catalyst for economic growth.”

The minister said in a bid to boost private equity capital formation, the Nigeria diaspora fund was initiated.

“The Nigeria diaspora remit between 20 to 25 billion dollars annually according to the World Bank, but these remittances have not been channeled intentionally to private equity.

“ Therefore, the investment initiative by my ministry is creating the platform to target, mobilise and utilise some of these funds into the productive economy.

“Our Private Equity and Asset Management firms are adept at attracting investments and the support from the Ministry is an assurance that the government is backing this investment drive.

“Government will provide the enabling environment, remove the roadblocks and red tapes to ensure that these investments thrive.”

Anite said the investment drive was not limited to only Nigerian Diasporans, but the ministry was also reaching out to all fund providers.

She said the ministry had also received support from development finance partners.

“I have no doubt that with the success of this initiative, Nigeria will witness a boom in the formation of businesses, and a strong financial and capital market.

“Nigeria will also witness the creation of a strong economic and industrial base to catalyse a one trillion dollar Gross Domestic Product (GDP) economy.”

Anite said the ministry was set to host the Nigeria Investment Summit, a platform to connect domestic and global investors to Nigeria.

“We are creating and de-risking the investment opportunities in Nigeria, and will showcase these as we inaugurate our digital dealroom which will present the investment opportunities and help facilitate the investments to happen.”

She said this had become necessary because most contracts issued in Nigeria had other jurisdictions as places for arbitration, mostly England.

“We have observed that this is so because most businesses experience delays in the arbitration and legal process for enforcing contracts.

“This red tape will be removed with the automated commercial courts, and this will boost investor confidence and increase investment flows.” (NAN) 

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Economy

Domestic Securities Market a Major Source of Funding for FG – DMO

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The Debt Management Office (DMO), says the Nigerian domestic securities market remains a major source of funding for the Federal Government.

The Director-General of the DMO, Patience Oniha, said this on Monday in Lagos at an interactive session with primary dealers in the Federal Government securities market.

According to Oniha, during COVID-19, when the international markets were closed, we were able to raise the full amount needed to fund the budget.

“Last year, we raised seven trillion Naira as new domestic borrowing. It speaks to the size of the domestic market, its resilience, and its sophistication, unlike we have in many African markets,’’ she said.

Oniha said that the 2024 budget had a deficit of six trillion Naira to be financed through new domestic borrowing.

She said that the National Assembly also approved N7.3 trillion Ways and Means for securitisation.

“Out of the new domestic borrowing of six trillion Naira, we have raised N4.5 trillion. For the Ways and Means, out of seven trillion approved for securitisation, we have raised N4.905 trillion.

“The financial sector has come a long way, and this is another strategic meeting to chart a way forward,’’ Oniha said.

Mrs Nadia Zakari, the President, Financial Market Dealers Association (FMDA), said that the Nigerian business environment was evolving and unique, necessitating such interactive sessions.

According to Zakari, such sessions are critical for both market operators and the Federal Government for them to be able to make decisions as they plan for the rest of the year.

“We stand as financial intermediaries, and we are in a very important position of interacting with other market operators, the end investors and the DMO,’’ she said. (NAN)

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