Highlights of the 69th National Economic Council Meeting chaired by the Vice President, Prof. Yemi Osinbajo, SAN are as follows:
A. UPDATE ON SEPARATE FUNDING STREAM FOR JOINT VENTURES CASH CALLS (JVC)
• Minister of State, Petroleum Resources briefed the Council that the current upstream JVC arrangement in Nigeria’s Oil and Gas Industry are incorporated JV with NNPC and the IOC partners
• Minister proposed a new self-funded JVC Cash Calls i.e. IJVC
• Some benefits of the self-funded JV i.e. IJVC:
– Improves accountability within the governing structure of the JVs
– A self-funding entity outside otherwise cumbersome government budget process
– Less political interference given that operational control rests with joint teams and ultimately IJVC entities when formed
– It also focuses on commercial decision making
• Council heard that a decision on the proposal would be taken once negotiations for the new IJVC are concluded
B. PRESENTATION ON MEDIUM TERM FISCAL FRAMEWORK 2017 – 2019
• The Honourable Minister of Budget and National Planning made a presentation on MTFF 2017 – 2019 to the Council
• Key highlights of the MTEF 2017 – 2019:
– Provides the broad framework for annual budget planning and fiscal management over a 3 year period
– Describes government’s strategic socio-economic development objectives and priorities
– MTEF 2017 – 2019 is coming on the heels of the global economic down-turn and the slowdown in the domestic economy
• Assumptions driving macroeconomic parameters and targets for MTEF are:
– Oil price for Benchmark and production assumptions
– Non-oil revenue assumptions.
– Non-oil revenue outlook.
• Implications of the Projected Revenue Profile to States:
– Although, the projected distributable revenue is higher over medium term, it may not be sufficient to address the current fiscal challenges at national and sub-national level
– States may need to consider strengthening IGRs
– States to sustain the implementation of the fiscal sustainability plan such as better expenditure management
– Focusing spending on priorities that will increase productivity and job creation in their States
– Fulfil condition in the Fiscal Sustainability plan to enable them access the Budget support funds
• Role for State Governments:
– States urged to adopt the MTEF and Fiscal Strategy Paper as basis for developing their annual budgets.
– States to be guided by assumptions of MTEF and also be conservative in their revenue and expenditure projections for 2017 – 2019 in view of declining oil price.
– States urged to look in-wards to enhance IGR and block financial leakages in their systems.
C. PRESENTATION ON SELF-SUFFICIENCY IN FOOD PRODUCTION – MINISTER OF AGRICULTURE
• The presentation noted that economic diversification must be taken with all commitment in view of current harsh economic situation.
• Emphasized that Agriculture needs to be more seriously embarked upon by all governments and citizens with renewed vigor.
• Federal Government is pursuing Self-Sufficiency in food production with all seriousness.
• Federal Government to launch “The Green Alternative” as a road map following FEC’s endorsement.
• Two main thrusts of the road map:
– Operate in partnership with State Governments to meet national production targets.
– Embark on production of export commodities.
• CBN Anchor Borrowers Programme to support millions of small-holders in rice production.
• Government to raise on rice milling capacity to 10 million of paddy rice annually.
• Current efforts to conclude a China Exim Bank Credit to support 40,000 – 100,000 tons per day rice mills for Nigeria.
• Government intends to meet target of 2018 in Rice Self-Sufficiency.
• Role of States in Food Self-Sufficiency:
– Processing and preservation – States to put in quality control measures and intensify advocacy;
– Provide extension services and intensify seed development and supply fertilizer;
– States should encourage more youths to get involved in agriculture and replace ageing farmer population now averaging 63 – 65 in age;
– Lands preparation for effective mechanization by States to encourage old hands and encourage new comers to gain access;
– Other areas for States to intervene/support include; earth dams because of climatic uncertainties, machinery such as tractors, rural roads to improve access to support evacuation from farmlands and also appropriate fertilizer to nourish soil accordingly;
– There was an enthusiastic discussion of this presentation by NEC, indicating awareness on need for agriculture diversification;
– States were also asked to identify their specific intensions areas and targets regarding agriculture diversification so as to measure progress.
D. REPORT ON EXCESS CRUDE PROCEEDS
• Minister of Finance reported to the Council that the balance in the ECA as at July 20, 2016 stood at USD 3.93 billion.
E. UPDATE ON BUDGET SUPPORT FACILITY BY THE HONOURABLE MINISTER OF FINANCE
• Minister of Finance gave and update as follows:
i) 35 States applied for the facility.
ii) 28 States met the requirements
iii) 7 States sent their required documentations late and are being processed.
ANY OTHER BUSINESS
The Council was informed by the Central Bank Governor that all Bank customers that operate Domiciliary Accounts are permitted to lodge dollar cash into their non-export Dom accounts subject to the provisions of the money laundering Act.