Paris Club Refund: Nigerians Want Governors Held to Account

• Kwara, Bayelsa begin disbursement of funds

Crude Oil Price Rises 1% over Drop in US Inventory Ejiofor Alike with agency report

Crude oil prices jumped more than one per cent wednesday after a US report showed a bigger weekly draw than forecast in crude and gasoline stocks along with a surprise drop in distillate inventories.

The Energy Information Administration (EIA) said US crude stocks fell 4.7 million barrels during the week ended July 14, exceeding estimates for a 3.2 million draw in a Reuters poll.

Brent were up 60 cents, or 1.2 per cent, at $49.44 a barrel, while US West Texas Intermediate crude for August was up 54 cents, or 1.2 per cent, at $46.94 on its second to last day as the front month.

EIA said distillate stocks decreased 2.1 million barrels and gasoline stocks declined 4.4 million barrels.Hammed Shittu in Ilorin and Emmanuel Addeh in Yenagoa with agency report

Many Nigerian have called on state governors to make judicious use of the second tranche of the Paris Club refund which has been released to the 36 states by the federal government.

The federal government on Tuesday released a state-by-state breakdown of N243.8 billion paid to state governments as the second tranche of the Paris Club refund of over-deductions on Paris Club, London Club Loans.

The Minister of Finance, Mrs. Kemi Adeosun, in a statement said that the debt service deductions were in respect of the Paris Club, London Club and Multilateral debts of the federal and states governments between 1995 and 2002.
According to the statement, the payment was approved on May 4 but the breakdown of payment was only released July 18 after series of agitations from Nigerians.

The News Agency of Nigeria (NAN) recalled that President Muhammadu Buhari had approved the release of N522.74 billion as first tranche of payment to states.

“This is in partial settlement of long-standing claims by states governments relating to over-deductions from Federation Accounts for external debt service arising between 1995 and 2002.

Most of those who reacted accused the federal government of not ensuring that the first release was utilised by the states before releasing another tranche.

Reaction on their social media pages on Twitter and Facebook, they called on the state governors to ensure that local governments got their own refunds adding that the money should be seen as an opportunity to pay arrears of unpaid salaries, allowances and pensions.

On Twitter, Nas wrote: “If FG had not published the Paris Club refund i know some state will pretend as if nothing came.”

Boason Omafaye of Channels Television wrote: “Are State Governments that have now received total of N767bn of FG Paris Club refunds, required to refund their various local governments as well?”

Oluseun Onigbinde of BudgIT wrote: “Low-key the second round of Paris Club bailout is going on. Money that was printed without any backing asset. Well done sir.”

Mayowa Adediran wrote: “N7,901,609,864.25 from Paris Club refunds. Yes sir, the seven hills of Ibadan re watching. Clear the backlogs. Oyo workers and pensioners need those payments @AAAjimobi Paris Club refunds.”

Israel Odita wrote: “Paris Club: Indeed this cash sharing system is not the way to build an economy. It is destitution as state policy. May we outgrow it soonest.”

Meanwhile, following the release of the Paris Club refund, Kwara State Governor, Alhaji Abdulfatah Ahmed, has approved the release of N1billion to local government councils in the state to offset part of their salary arrears.
The state Commissioner for Finance, Alhaji Demola Banu, who made the announcement in a statement in Ilorin wednesday, said the N1billion was part of the N5.1billion received by the state government as its share of the Paris Club refunds from the federal government.

Banu said the N5.1billion received by the state government was 12.5 per cent lower than the amount it was expecting from the federal government.

The commissioner said the balance of the refund would be utilised for projects and programmes designed to enhance the welfare and security of all citizens and residents of the state.

Also, the Bayelsa State Governor, Mr. Seriake Dickson yesterday confirmed the receipt of N10 billion from the federal government as its share of the second batch of the Paris/London Club refund.

Dickson said that out of the money refunded , N919 million was meant for the eight local government councils, warning against misuse of the funds which was already being disbursed would not be condoned.

He also directed the State Commissioner for Finance, Maxwell Ebibai to immediately release the money to enable them carry out their obligations, especially to clear some outstanding salaries.

A statement by his Chief Press Secretary, Daniel Iworiso-Markson, said the governor made the confirmation at the Government House in Yenagoa when he hosted labour leaders in the state.

The governor warned that the money for the councils should be properly utilised and not be shared by a few to further enrich themselves at the expense of the workers in their respective councils.

Dickson said: “I have directed that the money should be transferred to them latest tomorrow (Thursday). As for this money, let me make it clear that is not for them to share and ‘chop’. It is not a free money, so those who will be celebrating that money has come to be shared will be disappointed.

While thanking the labour leaders for their support and understanding, the governor said the disclosure of the refund from the federal government is in line with his administration’s open policy on public finance.

The State Commissioner for Information and Orientation, Mr. Jonathan Obuebite who briefed journalists after the interactive session between the governor and the labour leaders said it was agreed that part of the money should be used to clear the backlog of salaries.

“ It was resolved that the government will use part of the fund to pay one and a half month salary . Initially, we had thought that it was N14 billion that will come in so we can pay two months but that was what came in. Pensioners are also going to be paid”, he said.

Analyses polled by Reuters had forecast a 1.2 million barrel build in distillates and a 0.7 million barrel draw in gasoline.

The drawdown occurred even as EIA said US production climbed to 9.43 million barrels per day (bpd), its highest since July 2015.

Reuters quoted analysts as saying that rising US production has made it harder for OPEC and other producing nations to support prices with their own output cuts.

Supplies from the Organiation of the Petroleum Exporting Countries (OPEC) remain high. Rising output from member states Nigeria and Libya have cast doubt on efforts to reduce the crude glut.

The head of Libya’s National Oil Corp said the country aims to produce 1.25 million bpd by the end of the year and 1.5 million bpd by the end of 2018.

Nigeria and Libya are exempt from a deal between OPEC and other producers, including Russia, to cut production by 1.8 million bpd.

A Russian energy source said the country is ready to keep working with OPEC to rebalance oil markets.
An OPEC and non-OPEC committee meets in Russia on July 24 to discuss the impact of the deal.

While OPEC-led cuts have offered prices some support, rising supplies from Nigeria and Libya, two OPEC states exempt from the pact, and increasing U.S. production have weighed on the market.
Kuwait said the market was on a recovery track due to rising demand and said it was premature to cap Nigerian and Libyan output.

An OPEC and non-OPEC committee meets in Russia on July 24 to discuss the impact of the deal.
Under the supply deal, OPEC is curbing output by about 1.2 million bpd, while Russia and other non-OPEC producers are cutting half as much, until March 2018.

The Nigerian and Libyan recovery has prompted talk among producers about asking them to join the supply deal.
The Secretary General of OPEC, Muhammadu Barkindo downplayed expectations this would be addressed soon, saying a meeting on July 24 in Russia of some OPEC and non-OPEC ministers would discuss Nigerian and Libyan output only at a technical level.