The proposed funding of the $50 billion Biofuel Industry Equity Fund (BIEF) for Nigeria by government agencies and parastatals has, generated some disagreements between the Minister of State for Petroleum. Ibe Kachikwu and the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele.
Both, through their different proposals on the funding of the project, took different stance, which created an impression of a divided house on a common government programme.
Speaking in Abuja on Tuesday at the National Capacity Building & Sensitisation Workshop on Biofuels, organized by the Petroleum Products Pricing Regulatory Agency (PPPRA), Emefiele, represented by CBN Director of Research, Mr. Lawrence Odeh said the funding will be subscribed to by government agencies and parastatals.
He named them to be all the development banks, including Bank of Industry (BoI), Bank of Agriculture (BoA) and Development Bank of Nigeria (DBN).
Emefiele said: “On the domestic front, it is instructive to know that the Nigerian biofuel policy and incentive draft document had outlined a range of funding arrangements and incentive packages for firms involved in biofuel production.
“The document envisages that equity funding arrangement to be known as BIEF of $50 billion and to be purely funded by parastatals and development banks, including BoI, BoA and DBN.”
But in his comment, on the issue, Kachukwu said there is a need to respect Federal Government policy on fiscal federalism by effect assigning some roles to be given to government agencies on funding of the biofuel project.
The Minister, who was represented at the event by Dr. Timothy Okon of the Nigerian National Petroleum Corporation (NNPC) said: “Assigning responsibilities to institutions without a clear cut funding direction will pose some challenges on the programme, because government would rather prefer funding food security, energy sector than any other sector.”
However, the CBN boss, stated that the scope of funding sources had been made easier as development partners such as United Nations Development Programme (UNDP), United Nations Environmental Programme (UNEP) and the UN habitat were already willing to support Nigeria on the project
He further stated: “both the private and the public sectors are partnering to have the required funding for the development of the biofuel sector, which will ensure the efficient deployment of resources and best judgment in business and investment decisions.”
But officers however agree on the need to find solution to the huge expenditure on petroleum products being imported into Nigeria.
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