Finance Minister and Coordinating Minister of Economy, Mrs. Okonjo-Iweala
By Festus Akanbi with agency reports
In a desperate bid to fund the humongous power and gas sector projects lined up by President Goodluck Jonathan administration, the Federal Government at the weekend indicated its resolve to issue a Eurobond worth up to $1 billion next year. The measure is aimed at taking advantage of Nigeria’s likely inclusion in a JP Morgan emerging market index.
A Eurobond is an international bond that is denominated in a currency not native to the country where it is issued.
The Finance Minister and Coordinating Minister of Economy, Mrs. Okonjo-Iweala, in an interview, with Reuters at the weekend said her long-term target was to scrap the Excess Crude Account (ECA) and replace it with a planned sovereign wealth fund.
JP Morgan said on August 15 that Nigeria is likely to be included in JP Morgan's Government Bond Index - Emerging Markets (GBI-EM) from October , which the minister said would open up fresh opportunities for issuance.
"We are thinking next year of an infrastructure bond to help our power and gas sector," she said.
"Anywhere from $500 million to $1 billion. We are trying to see if we can do something unique by having a portion as a diaspora bond."
She pointed to Nigeria's improved credit ratings in the past year, with Fitch upgrading the country to BB- and Standard & Poors upgrading its rating outlook to positive from stable.
Nigeria has over the years earned a reputation for reckless fiscal spending and chronic corruption, ills which Okonjo-Iweala was brought back into the country from her former World Bank job to cure.
The minister was quoted as saying that efforts had been made to "steady the ship" since she took office a year ago, including reducing the fiscal deficit to 2.85 percent of GDP this year from 2.95 percent last year, with a view to cutting it down to 2.21 percent in 2013.
Another achievement was boosting the cash in the ECA to $7 billion from around $4.4 billion a year ago, she said.
The long-term aim is to replace the account with a new sovereign wealth fund, but in the meantime they will run side-by-side, she added.
"Ideally, you would want to fold the two into one and that is our ultimate objective but for now I think the two in the short-medium term will run side-by-side until everybody gets comfortable with the sovereign wealth fund."
The fund has been passed into law, but it faces stiff opposition from state governors who fear it will mean less money for them.
The ECA is currently distributed to local, state and federal governments, but the sovereign wealth fund will stay with the central government to save for future generations, fund infrastructure and defend the economy against commodity price shocks.
Meanwhile, the Joint Task Force in collaboration with the Eastern Naval Command, Calabar, Cross River State, recorded a breakthrough as it rescued 27 workers of an oil servicing company, Sinopec, kidnapped by a militant group in Ikang, Bakassi Local Government headquarters.
This followed a raid by JTF on Friday on the hide-out of militants with the name Lapto Marine Force who allegedly killed a navy officer and three ratings and also carried out nefarious activities.
Flag Officer Commanding Eastern Naval Command, Rear Admiral Olufemi Ogunjimi, who briefed newsmen in Calabar, said the militants kidnapped the oil workers on Thursday, in Akwa Ibom.
Ogunjimi said JTF had raided the criminal hide-out in the early hours of Friday. He described the militant group as criminals who had nothing to do with the group agitating for the reclaiming of Bakassi, which was ceded to Cameroon by the International Court of Justice.
“This confirms why I called them (Lactop Marine Force) as a criminal gang. They are the type of people that give the country very bad image. That is how far we have gone and the operation continues and in no distant time, we will get through with them,” he said.
The FOC described Mr. Lapto the leader of the gang as a criminal that runs a criminal gang who kidnaps for ransom, engages in piracy, sea robbery and killing of innocent people including uniform personnel.
The JTF Commander, Major-General Johnson Ochoga, said they had been on the operation to flush out the gang for three days and that the militant group was given the opportunity to come out and denounce their criminal activities before they moved against them.
Ochoga said there was no casualty and that 28 persons were adopted but out of panic when the troop approached the camp, one of them out ran away and his whereabouts was not known.
He said two of the kidnapped workers had disappeared from the camp on Friday and had given useful information to JTF.