The Federal Executive Council (FEC) has approved new fiscal policies including the establishment of Cassava Bread Development Fund aimed at promoting the consumption of cassava bread and also the Petroleum Industry Bill (PIB), in its effort towards transforming the nation's oil and gas sector.
Minister of Information, Mr Labaran Maku, made the disclosure in company of his counterparts in Finance, Dr Okonjo-Iweala, Agriculture and Rural development, Dr Akinwumi Adesina, and Petroleum Resources, Mrs Deziani Allison-Maduekwe, at a media briefing on the outcome of the weekly FEC meeting presided by President Goodluck Jonathan at the State House, Abuja on Wednesday, July 11.
Speaking on the new fiscal policy on the cassava bread initiative, Dr. Okonjo-Iweala noted that the new incentives will enable cassava farmers and cassava flour-mills join master-bakers to key into government's cassava bread initiative.
She disclosed that the Federal Government will impose an additional 65 per cent levy on importation of wheat flour which would be paid with the 35 per cent duty on the commodity, in line with the approved 2012 budgetary provision which became effective in the month of July, 2012.
"The second initiative is that there is going to be a levy on the importation of wheat. And we are planning that part of this levy, which will still to be worked out, will be put in a fund which will be called the cassava bread development fund," she said.
"The whole idea is that the fund will be used to support the development of the value chain up to the point of actually baking the bread. The fund is being constituted at the moment. We hope to have the relevant agencies and ministers as part of the committee to manage the fund with the secretariat in the fiscal affairs department of the budget office," she explained.
Announcing the slash in tariffs on cassava enhancing enzymes from 10 per cent to zero per cent, effective from July 15, Dr. Okonjo-Iweala stated that the move became necessary since Nigeria does not have the cassava enhancement enzymes used in cassava bread production in sufficient quantity.
"Therefore much of it is imported and it forms a good part of the high cost of the production of this bread. What we have decided with the support of Mr. President is that in the value chain of production of cassava bread, that the import duty rate for these enzymes should be reduced from 10 per cent to zero per cent. I think this will help immensely with the cost of production of the bread," she elucidated.
In his contribution, Dr. Adesina, noted that the cassava bread is cheaper as it cost 60 per cent of the cost of wheat flour bread adding that it's better and healthier bread which government wants all Nigerians to have the opportunity to do.
"To do that there are a number of things that are needed, master bakers require new equipments, they have to ship some equipment, some of their baking facility and that is very important. They require training. They also require some enzymes. This is another indication that Nigeria will not be a slave to wheat importers. We have an economy to grow, farmers to put to work, we have jobs to create. It is not a political matter. It is an economic issue," Adesina stated.
"Nigeria is the largest producer of cassava in the world. Yet, we are the largest importer of wheat in the world. These policies are all directed at turning Nigeria, which is the largest producer of cassava in the world, into the largest processor of cassava in the world, to create jobs in millions for our own farmers and our own people; and not to export jobs to other countries that are exporting wheat to Nigeria," he added.
Dr. Adesina therefore appealed to flour millers against any act that would undermine the efforts of the government to use the cassava flour bread to transform the economy.
On the new Petroleum Industry Bill (PIB), which the President is expected to forward to the National Assembly for consideration and possible approval, Mrs Deziani Allison-Maduekwe, said the objective of the PIB was to make the petroleum industry more competitive adding that it would ensure accountability within the industry and revolutionary changes, which include the unbundling of the Nigerian National Petroleum Corporation (NNPC) into several companies.
The six new firms that will be created with the passage of the PIB include National Oil Company, Asset Management Corporation, National Frontier Exploration Services, National Gas Company and the Petroleum Host Communities Development Fund.
"The new bill looks at new areas that were quite critical and first of all they are the Inspectorate, the regulatory agencies for the oil and gas sector to ensure that they are independent and that they can actually do the regulations. We also looked of course at the unbundling of the NNPC, which have been very critical and created out of the old NNPC, a National Oil Company, which will be Independent," Mrs. Alison-Madueke noted.
"It will be a registered company which will have shareholding and it will be ceded acreages and will also, as we implement the PIB, take over current infrastructure in the oil and gas sector - refineries, depots and certain downstream entities as well as production sharing contracts. We created an Asset Management Corporation as a holding company, which will operate an asset management company that will be a competitive private sector driven company," she stated.
"And it will hold what are today the joint venture hydro-carbon assets of the nation. We expect of course that as time goes on that the company will operate essentially along the line of private sector with the right profit and loss centres to give the federation the right return on investments in the hydro carbon sector," she stated further.
She said that the Council looked at a couple of new agencies as well including the National Frontier Exploration Services unit that will reside in the new petroleum policy bureau, which will be a technical arm of the Minister's secretariat adding that it would be a unique department reporting directly to the Minister and will also be expected to robustly drive the seismic data acquisition for the various inland sedimentary basins.
She expressed optimism that in the next few years, there will be a continuum in that particular enterprise, which is very critical, if the nation is to diversify her hydro-carbon base, noting that a very interesting fiscal regime and frame-work has been created which has been of great interest to operators in the oil and gas operations, both foreign and indigenous, adding that while the details will be given later, efforts have been made to ensure balance that will facilitate accruals of more revenues in the oil and gas sector for the nation in due course.
"We have also created a National Gas Company within the framework of the PIB which will absorb the former Nigerian Gas Company along with the former infrastructures. This gas company will drive the gas for power and gas for industry that are absolutely critical for our economy as we go forward," she added.
The Petroleum Minister explained further that existing parastatals such as Petroleum Trust Development Fund, Petroleum Equalisation Fund, the Petroleum Training Institute and the National Content Development Management Board will continue to exist until they are no longer necessary and a new Petroleum Host Community Fund, which again will take care of the participation of the host communities of oil and gas communities in the country.