And contrary to schedule, the Federal Government's budget which is benchmarked against oil revenues will not be presented by President Umaru Yar'Adua to a joint session of the National Assembly today.
Nigeria had, following the last output cut by OPEC, reduced its daily crude oil production by 113,000 barrels per day (bpd). Currently, Nigeria's daily production quota is put at 2.05million bpd.
Minister of State for Energy (Petroleum), Mr. Odein Ajumogobia told journalists just before the start of the weekly Federal Executive Council (FEC) meeting that Nigeria's position "is that we want to ensure that everybody has complied with the previous cut. We have complied and we were asked to cut 113,000 bpd and we have cut 113,000 bpd. At the last meeting when there was a cut we found out that a lot of countries did not comply. So, before we look at any further cut, we first want to be sure that everybody has complied. We are producing what we agreed to produce which is 2.05 million bpd even though we have a capacity of significantly higher than that but we have complied with the cut strictly."
But the minister said that the reluctance by other member countries to obey OPEC directive on cut in output did not indicate a divided house. He noted: "I think when you have a group and they have diverse interests within the group, sometimes it may look as if there is a divided house. But there is no divided house. And that is why we have been very successful in managing the diversity. Notwithstanding the diversity of interests, we are able to build consensus."
He assured that Nigeria would continue to work with other OPEC member countries in order to promote common goals of the organisation.
"Nigeria will not break rank with the consensus but as I said we want to make sure that there has been compliance with the previous directive from OPEC," he said.
Ajumogobia stated that if Nigeria agreed to a further cut, it would affect the proposed 2009 budget, even though he admitted that such a loss would be mitigated by funds in the Excess Revenue account.
He added: "If we cut it will affect the budget. It will affect the total revenue. The revenue is based on the benchmark plus volume, so if it comes to volume you may just have to adjust the budget again but I don't think we need to do that because we can always mitigate it based on the fact that we have significant excess from the high price and we can probably mitigate some of that loss. There are two issues there - price and volume. And for a country like Nigeria that depends on the commodity, we depend on both. For that reason, naturally that is the thinking of everybody, nobody is anxious to cut."
The FEC approved a total of N7.75 billion for the take-off of the Guaranteed Minimum Price (GMP) of agricultural products in the country.
The Council also approved a total of N11,746,427,355.90 (N11.746 billion) for the execution of 31 ecological projects in 24 states of the federation.
The House of Representatives had earlier announced that the presentation of the budget would hold today.
The shelving of the presentation is to allow for more consultations as both the Executive and the Legislature work to harmonise areas of disagreement on the budget proposals before it comes to the National Assembly for enactment into law.
A source told The Guardian that the presentation would likely hold next Tuesday.
According to a source, "after an all-night meeting between the President and the National Assembly leadership on Tuesday, it became obvious that there are still areas of divergence."
Both arms of the Federal Government are expected to use the period between now and next Tuesday to reach a common position.
The Guardian learnt that while members of the National Assembly favour the accommodation of more projects, the President is canvassing that only priority projects related to critical infrastructure should be accommodated in the budget because of the global economic meltdown and the fall in the prices of crude oil.
FEC also announced the reversal of its earlier approved demerger of the Federal Ministry of Agriculture and Water Resources, opting to allow it remain as it is now - as Ministry of Agriculture and Water Resources with a Minister and a Minister of State.
The current Minister of Agriculture and Water Resources is Dr Sayyad Abba Ruma.
Ruma, who spoke on the GMP said it was coming because of the expectation that there would be bumper harvest this farming season.
According to him, "the approval of N7.75 billion for the Guaranteed Minimum Price is on the account of the bumper harvest that we hope to happen this year. This is because of the prompt deliveries of fertilizer and the reasonable amount of rainfall that we have gotten this farming season. It is certainly expected that there will be a bumper harvest. On account of this, the Ministry of Agriculture and Water Resources reviewed the existing buyer plan resource framework. After extensive consultations and stakeholders meetings, we discovered that the situation now may not continue to be in the best interest of our individual small scale farmers, who will immediately after harvest will be looking forward to opportunity to dispose of their farm products. So we decided to introduce the Guaranteed Minimum Price. This was practised in this country before but was stopped in 1985. But we believe it is better to effect a retooling of this such that our farmers will leverage on the framework in order to sufficiently strengthen them and immediately after harvest rely on a mechanism that will give them the best of protection.
"Council therefore gave approval for the purchase of about 194,600 metric tonnes of assorted food commodities for storage in our various silos for our national strategic food reserve. But of course, we may not be in the best position to extend it to all food items. Therefore there are selected ones in compliance with the best practices. They include maize, sorghum, millet, paddy and garri. We are undertaking the purchase of 82,000 metric tonnes of maize, 57,500 metric tonnes of sorghum, 37,000 metric tonnes of millet, 14,000 metric tonnes of paddy rice and 4,100 metric tonnes of garri. And this is likely to cost about N7.75 billion."
"This in fact happens to be a major outing compared to what it was in the last 30 years. There has never been a major outing like this magnitude. The names of the successful buyer licensing agents would be made public. They are about 64. This also has reduced the number as it was before. And so, we have reduced the number from about 1,000 to 2000 to 64, not more than two per state. We are giving not more than 21 days within which we expect those that have succeeded from the competition to perform, otherwise they will be substituted with those that have been found equally competent."
Author: Jo Amey
