Near Exchange Of Blows In Parliament Over Oil Cash

Hell nearly broke loose in Parliament on Wednesday November 10, during a meeting of Members of the Joint Committee on Finance and Energy to discuss the Petroleum Revenue Management Bill.

According to insiders, the disagreements, which nearly resulted in exchange of blows, started after the Majority side tabled a motion, seeking to amend clause 5 of the bill which forbids government from using the nation’s oil resources as collateral for loans.

The Minority had long accused the Mills administration of harboring plans to amend clause 5 of the bill to allow the administration to use the nation’s oil revenue as collateral to contract huge loans.

Although the Government has persistently denied the minority’s claims, Wednesday’s meeting exposed the falsehood that may have characterized past denials of the government on the issue.

Insiders told Citi News there was near exchange of blows over the issue at the meeting of the Committee Chairman; Hon James Avedzi who moved the motion for a continuation of debate on the proposed amendments.

Amidst rising tempers, Hon Avedzi abruptly truncated the meeting in an attempt to prevent the exchange of words to degenerate into fisticuffs.

When Citi News caught up with him after sitting of Parliament on Thursday November 11, he confirmed the incident but denied that there was near exchange of blows at the meeting.
 
"If we had insisted that we should continue to go on that issue nobody knows what would have happened. But we are matured people and we don't expect that to happen so the best thing to do was to call off the meeting and thats just what I did. Parliament is about debates from time to time we disagree on issues and later come to a compromise" he said.

Ghana Must Learn From Nigeria

Courtesy of GhanaWeb, Thursday,November 11, 2010
By Kojo Appiah-Kubi, Phd

One of the biggest challenges facing Ghana currently, as the newest oil-producing country, is how to use its oil wealth strategically to promote sustainable development. The country can, however, count itself luckier to be able to learn from its big brother, Nigeria, which has been producing oil since 1958 and has consequently accumulated such a worth of experience, both positive and negative. One such experience that Ghana would have to learn is how Nigeria having earned billions of dollars from oil exports today is languishing economically with a massive debt burden and high levels of poverty.

Over the period 1971–2005, for instance, Nigeria is estimated to have earned an extra $390 billion in oil-related fiscal revenues or 4.5 times 2005 gross domestic product (GDP), expressed in constant 2000 dollars. During this same period the proportion of its population estimated to be leaving in poverty rose successively from 28% in 1980 to a peak level of 70% in 1990 before levelling off at 54.4% in 2004. The latest records estimate about 48% of Nigerians to be poor. In absolute terms the per capita GDP of the average Nigerian plummeted from US$1,200 in 1981 to about US$300 in 2000. Economists refer to this coexistence of vast oil resources and extreme personal poverty in Nigeria as the “resource curse”. What is more ironic is that this huge flow of oil revenues has been accompanied by rapid substantial increases in the country’s external debt from $3.4 billion in 1980 to about $33 billion in 2002. This mountain of debts and its associated colossal service burden reached a crisis level in the advent of the new Millennium and contributed to cripple Nigeria’s economy so much as to cause the then President Obasanjo to declare the country insolvent in 2002 by completely halting its debt payments and later applying for the debt (HIPC) relief, which was granted in 2005.

But how did Nigeria land itself in debt problems, its oil wealth notwithstanding and what can Ghana learn from the mistakes of Nigeria? The origins of Nigeria's external debt problems date back to the policies pursued during the 1970s oil boom that led successive governments to emphasise on heavy investment in public works, import-substituting industries and public consumption. During the mid seventies the presence of proven oil reserves amidst increasing oil prices gave Nigeria a perceived credit-rating far higher than its domestic and macroeconomic fundamentals would have otherwise justified. With the industrialised world seeking for other oil sources to meet their ever increasing demand for oil alternative to the volatile Middle East, it turned to Nigeria with offers of new loans to build its social and economic infrastructure. Without any blueprint for the sustainable utilization of its oil revenues, the country began a massive infrastructural development financed with short term loans. Indeed some western countries, with their eyes on Nigeria’s oil, competed among themselves to finance and construct infrastructural projects and import substitution industries.

Nigeria also saw in its oil wealth and increasing oil revenues from rising oil prices a de facto collateral for loans, and, without due consideration to revenue volatility normally associated with oil price instability, borrowed to finance misguided spending programmes. Against all common sense of fiscal caution the government ran deficit budget financing and borrowed against future oil income to finance large-scale ‘iconic’ projects designed ostensibly to boost economic activity, symbolize government achievement and lift local and regional profile. Gigantic projects like the building of a new capital city, Abuja, three huge steel mills, 14 airports, among others, pro¬gressed very fast during this period. That was also the time when many young Ghanaians saw in Nigeria a greener pasture in search of jobs and flooded there after them. With rising oil boom in the 70s and early 80s, the non-oil sector and local agricultural produce became totally neglected and the economy consequently became increasingly dependent on rising imports of consumer goods and other raw materials. During that time, as is reported, due to ship traffic congestion, the vessel turnaround time at the Lagos port exceeded one month.

With so many projects being implemented at the same time the country’s capacity to efficiently implement these projects for which loans have been contracted became seriously challenged and outstripped. The results were a high level of mismanagement and pervasive corruption. The high level of corruption led the World Bank to conclude that 80 percent of Nigeria’s energy revenues benefit only one percent of the population.

It appears that Ghana is poised to repeat the past mistakes of Nigeria. Ghana is beginning to produce oil soon but has no blue print as to how it intends to use the expected revenues productively. There is currently the talk about the need to build the country’s social and economic infrastructure just like the Nigerians did in the late 70s and early 80s. For this reason, the country is ready to borrow huge sums of money against future potential oil-revenues to finance these infrastructural projects without due consideration to availability of implementation capacity, due diligence, economic viability and impact assessment, etc. The 10 billion STX Korean Housing loan, the largest loan deal ever in Africa, is a particular example. This loan alone is equivalent to about 60% of the country’s Gross Domestic Product. Just at the same time this loan deal is being processed the Chinese want to over beat the Korean offers with tens of billions of dollars in loan pledges for infrastructural and trade financing. The Japanese also seem to be doing their utmost best to attract the attention of Ghana with billions of loan offers. The Europeans, with their long colonial, trade and other business affiliations with Ghana would definitely not want to be left out of the Ghana show. The big brothers in the Americas, US and Canada, are indeed also putting together their own dancing and musical tunes to attract the interest of Ghana government most.

But why has Ghana become so attractive to the developed world, when just a few years ago, the country was having difficulty in securing credit financing of about a few tens of thousands? The news is that Ghana is going to export oil soon in commercial quantities, a commodity with an extremely high demand in the developed countries. Just like what happened to Nigeria in the 70s these developed countries are using these jumbo loans to secure the long term development of their own respective economies with regular supply of oil. In the case of Nigeria the first major borrowing of US$1 billion, referred to at that time as the "jumbo loan" was contracted from the international capital market in 1978, increasing the total external debt stock to US$2.2 billion. Thereafter, the debt stock rose astrono¬mi¬cally in epidemic proportions from $3.4 billion in 1980 to $17.3 billion in 1985 and $29.2 billion in 1990 and $33 in 2002. Indeed Nigeria’s checkered past has important lessons for Ghana’s future, lessons that should be learnt if the country does not want to suffer the same resource curse that Nigeria suffers.

The first lesson is the acceptance not to over-blow the relative importance of the oil, despite its tremendous potential economic impact if managed properly. It is unfortunate that the oil is being seen by politicians as the panacea to all of Ghana’s problems. Rather it should be seen as just one of the many finite natural endowments of the country, whose benefits could only be maximised through innovative high-value addition. The present and future generations stand to benefits from this resource only if the country does not follow the Nigerian example of using the oil revenues in frivolous investments.

Utilization of oil revenues should be based on a credible long term monitorable development plan to bring about structural transformation in the economy, meant to reduce Ghana’s growth dependency on a narrow set of low-value agricultural commodities and other natural resources, which are subject to the volatilities of the world marketplace. This plan should best be separated from the annual budget based on the consolidated fund so as to avoid benchmarking government economic policies against the state of the oil sector. The oil revenue spin-off should also be used to strongly strengthen the private sector in the non-oil sector through tax incentives and infrastructure development. Non-tariff barriers to support domestic manufacturing should be tenured and targeted. With so many positive and negative experiences abound from which Ghana can learn, failure to use the oil resources sustainably is not an option.

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Nigeria: Arms Import - Frightening Details Uncovered

Lagos Vanguard
As the nation awaits the resolution of the riddles surrounding the illegal importation of the large cache of arms and ammunition including rockets through the Apapa Ports in July, more damning and frightening details continue to ooze out from security sources about the arms import

Sunday Vanguard reliably gathered that the investigating teams are still baffled about the mystery surrounding the loading port of the deadly cargoes. Whereas there have been various attempts to link the 13 containers of arms to Iran, Hamas fighters in Gaza, etc, insiders insisted that investigations so far have revealed that before the cargoes arrived the Lagos ports, they had gone through trans-shipment in Greece, Spain and India. However, there is no certainty yet about the original loading sea port.

It was further learnt that although the 13 containers (alongside 70 others), consigned to one Mr. Ali Abbas Usman Jega of No. 6B Nouakchott Street, Wuse Zone 1, Abuja, arrived the ports on July 15, 2010 on board the vessel MV CMA CGM Everest through doctored manifest and without Form M, it was the unsuccessful attempt to convert the containers to diplomatic cargo and trans ship or re-export same to State House, Banjul, The Gambia, that aroused the suspicion of the State Security Service (SSS), which raised a red flag to the Customs Area Comptroller, Apapa Ports.

Sources confirmed that when the doctored manifest details were electronically-imputed into the Customs ASYCUDA System, they showed that not only did the cargoes not have Form M, there was also no Risk Assessment Report (RAR), a clear violation of the cargo clearance process in Nigeria. Although an alert concerning the cargoes was raised, neither the importer nor the agent came forth to make any declaration. And, if there was no declaration (laying of claim),the Customs could only keep an eye on the containers pending the expiration of the 90 days permitted by law before being put on the Uncleared Cargo List.

The Gambian connection
Sunday Vanguard was told that suspicions heightened when, in August, a Customs licensed company, Jedo Investment Company, first attempted to re-export the containers to Banjul, The Gambia - a request that was rejected because only a shipping company could make such application to the Customs. Then, in September, a shipping company, CMA CGM Delmas Nigeria Ltd, submitted a purported manifest amendment to change the consignee to Kanilai Farms, State House, Banjul, The Gambia. This would have facilitated a seamless re-shipment as a diplomatic cargo, except that there was no formal notification from The Gambian High Commission. Two, there was no Form CCI, a mandatory document for diplomatic shipment.

Meanwhile, the two export officers of the Customs Service who may have been involved in the re-shipment efforts have since been with the SSS for interrogation.

More worrisome to the investigators is also the allegation that the Iranian suspect in the illegal arms saga had domiciled in a notable first generation top rate hotel in Abuja for three months to the knowledge of the security agencies. However, not a few Nigerians and security experts have queried why the security personnel did not act promptly with such information at their disposal.

However, experts had argued that had the Ports Service Providers, who got the multi-million naira contracts to install fixed scanners at the nation's ports since January 1, 2006, worked to contract terms, the Customs Service would have been able to detect the content of the 13 cargoes since July 2010, whether anyone made a claim to ownership or not. (Fixed scanners allow easy viewing of the content of containers, vertically and horizontally, whereas the mobile scanners which are in use, do not). But about five years into a seven-year contract, these contractors, who have earned great profit, had put Nigeria at a disadvantage because of the non-installation of the fixed scanners.

Rather than scan and know the content of cargoes, the Customs and security services still have to do manual inspection, only after the export seal may have been broken within the law, with all the disadvantages and temptations attached to human involvement in port clearing.

The nation woke up on Tuesday October 26, 2010, to a frightening story of illegal importation of 13 containers of arms and ammunition through the Lagos ports since July 15, 2010. Upon joint examination by the Customs and all the security agencies at the ports on October 26, the containers were discovered to have been concealed within marble slabs ammunition of various calibers including 7.65mm light ammunition with cartridges, 60mm, 80mm and 120mm mortar, rockets with firing pins and grenades.
The anxiety was fueled by the fear of illegal use of firearms, especially in view of the October 1 twin-bomb blasts which led to loss of 14 lives near the Eagle Square venue of the national parade for the 50th independence anniversary, the Boko Haram insurrection in the North-East and armed militancy in the Niger Delta region and serial kidnappings in the South-East. The SSS has since charged some suspects to court while the alleged mastermind, Mr. Henry Okah, is facing trial in a Johannesburg court for alleged involvement in the October 1 blasts in Nigeria.

Mean time, the National Security Adviser, General Andrew Azazi (rtd), has urged Nigerians not to jump into conclusion till investigations are concluded.

UN joins probe,reports Hugo Odiogor

Meanwhile, the United Nations (UN), plans to send a three-man team to Nigeria to get first hand information on the illegal imported arms
The UN is said to be worried about the implications of the arms movement to the ongoing initiative to ban illegal trade in arms by its members. The world body is also concerned about the prospects of internal and regional arms race in Nigeria and in the West African sub-region where civil wars and internal conflicts have propelled the propensity to spend huge resources to acquire deadly weapons.

The UN team, expected in the country next week, according to diplomatic sources, is interested in getting a clearer picture and accurate information on the origin and destination of the arms, and the choice of Nigeria as a trans-shipment point. According to Sunday Vanguard sources, the UN is worried about the arms haul in Nigeria which came at a time there is a global move to halt illegal trade in arms through the UN's Small Arms Treaty. The treaty is scheduled to be ratified before the end of the year as part of efforts to combat international terrorism
If passed by the UN and endorsed by national governments across the world, the UN's Arms Sales Treaty would compel the national governments to, among others, enact tougher licensing requirements, making law-abiding citizens face tougher bureaucratic red tape before owning firearms legally; confiscate and destroy all "unauthorised" civilian firearms (this excludes all weapons owned by governments); ban the trade, sale and private ownership of all semi-a utomatic weapons; and create an international gun registry, setting the stage for full-scale gun confiscation.

However, there are questions on whether Nigeria will destroy the intercepted arms and ammunition or keep them as part of its armoury. There are also worries that Nigeria could become a dumping ground for "all kinds of weapon into the west coast." Nigeria is a signatory to international conventions on non-proliferation of small and light weapons, and one of the major promoters of the initiative in the West African sub-region. But whereas our neighbours have shown better resolve in promoting human security, Nigeria has not been seen to be doing much despite the presence of multiple agencies including Task Forces.

An expert in conflict resolution, Dr. Ademola Adeleke, told Sunday Vanguard: "there is a lot of misinformation concerning the seized arms saga as the attempt to throw the issue into the international domain by linking the cargo to Hamas may have served the primary purpose of momentarily diffusing domestic tension. Yet, the fact remains that we are very far from getting to the roots of the matter and the government as usual will compound the issue by withholding information from Nigerians. Adeleke dismissed as wrong the attempt to drag Nigeria into the politics of the Middle-East because the imported arms came into the country illegally and the Nigerian government security operatives were alerted early enough to intercept the cargoes. He said it was wrong for anybody to brand Nigeria as part of Hamas axis as insinuated by The Jerusalem Post, an Israeli newspaper. There are moves reportedly initiated by the Presidency to improve on the pro-activeness of its security asset as well as solicit more international

co-operation and seriousness on the part of local operatives
The Dean, College of Development Studies at the Covenant University, Ota, Ogun State, Professor Kayode, contended that with what is happening in our security community, "every Nigerian is a potential refugee and the worst thing that could happen to the middle class will be a situation where those who are living comfortably would queue for food in refugee camps. This is a prospect that stares Nigerians in the face as the political class drives the country to the precipice because of their inability to manage their greed," Kayode told Sunday Vanguard.

He said what is playing out is the failure of the Nigerian state and the political class to place the interest of the nation above sectional interests and with the elections in 2011 approaching, the issue of physical security has become urgent

ACCRA GOES BLACK

Manet Court - Off Spintex Road, Accra



The entire city of Accra suffered its worst electrical outage of the year on Monday prompting many manufacturing outlets and retail stores to close down. Heavily affected were communities around Spintex Road where residents complained about damages to their appliances and electronic equipment due to the off-and-on surges. Some angry residents blamed the government for turning deaf ears against numerous complaints over this problem some dating back to eight years as roots of neglect and administrative incompetence.

Telescope happened to chat with John Akakpo, a homeowner at Manet Court residential complex off Spintex Road.
"It is bad that traffic here is the worst in the city .It is equally disgusting that each week we have to call the appliance repairman to fix our refrigerator because of this crazy unannounced power shut-offs five or six times a day. The sad part is the politicians dont care because most of them live around here and drive in darkness on surrounding dusty roads.They all talk big about progress and want foreigners to invest here but what businessman will tolerate loss of his expensive machines and so many down-times ? The next time I cast my vote I will remember this.I hope the President realises that the people's patience is worn off over this. We have many so-called PhDs and Electrical Engineers around Why have we been having this problem for such along time ? If the management is incompetent why should all of us suffer instead of changing them ? Something must be wrong somewhere"

At East Legon residents cared more about security than effects of the outages on their appliances. "Robbers usually operate in darkness and these outages offer them golden opportunities to invade our homes. We have had enough of this. I heard the President talk about going after armed robbers which is good but he must also target token areas that give them haven. To me the government's inability to deal with these power failures makes them accessories of crimes committed in darkness. I had my dog chase them away twice this week. I just dont know what to do anymore. The criminals seem to wait for such chances and they outnumber the police who are fighting hard to contain them." Gordon Blay blurted with resignation and disgust.
After nervously waiting, confused as to where or whom to complain power was partially restored in some sections of the city at 10 pm probably awaiting to go off again the next day - a reocurrence too familiar to residents of the city.