FELLOW Nigerians, we are once again at the beginning of a new fiscal year, and it is with a deep sense of responsibility that I present to you the budget of the Federal Government for the year 1999. This is a unique budget. It is unique not only because it is the last budget by the military in the administration of our country for one and a half decades, but we have with great realism, taken into serious consideration the hard facts of our peculiar situation and come up with tough decisions on necessary policy actions that would launch our country into genuine economic greatness.

This administration is fully aware that midway through the life of the 1999 budget, the elected representatives of our people will take charge of the affairs of governance of this nation. We have therefore taken extra care to ensure that the incoming civilian administration is neither encumbered nor deluded by our policy decisions. Ours is a realistic budget. Some of the decisions we have taken are hard and they will be painful in the short run. However, in the medium and long-term, the national economy and ourselves would be better off.

Fiscal 1998 was a year of mixed economic blessings. Our foreign reserves at the end of November 1998 stood at US$7.6 billion. The year witnessed some measure of macro economic stability and consolidation of the economic gains attained in 1996 and 1997.

Significant progress was also recorded in implementing economic reforms. These include the removal of restrictions on competition as well as private sector participation in various sectors of the economy. Additional measures to address financial sector distress were adopted.

However, the economy suffered some set-backs which adversely affected the implementation of the 1998 budget and the realisation of the set targets. The global decline in the international crude oil prices, the reduction in our OPEC quota and the temporary closure of oil wells in the Niger-Delta led to a sharp reduction in government foreign exchange earnings from crude oil. Consequently, the budgeted 1998 revenue of N216.336 billion from oil could not be realised. Indeed, by October 31, 1998, actual receipts from crude oil amounted to only N134.44 billion.

Besides the decline in oil revenues, overall economic performance, including real sector growth, was stultified by erratic supply of petroleum products, epileptic power supply situation and persistent crumbling infrastructure. These diminished the potential for raising non-oil revenues.

As a result of the decline in revenues, government effected a downward revision of the 1998 budget in October in order to avert major macroeconomic and fiscal imbalances.

Our economic fortunes and experiences have once again exposed the major weaknesses of the Nigerian economy. The over reliance on oil as a source of government revenues and foreign exchange earnings, coupled with weak, import-dependent industrial base as well as low productivity in the agricultural sector rendered the economy extremely vulnerable to fiscal and macro economic imbalances. A major development goal for the country, therefore, is to diversify the productive, foreign exchange and revenue base of the economy. The National Rolling Plan for 1999-2001 and the budget for 1999 provide the basis for achieving this goal.

Outlook for 1999

In 1999, Nigeria will continue to face enormous challenges in its efforts to revive economic growth and improve living conditions. The downturn in the world oil market will result in large revenue and foreign exchange shortfalls which will in turn put pressure on the external, fiscal and financial situation of the country. In addition, growth prospects for 1999 will continue to be undermined by persistent structural problems in the economy.

Against the background highlighted above, overall fiscal deficits could reach unsustainable levels of up to N400 billion during the year and GDP growth will fall sharply unless bold corrective measures are undertaken. It is therefore imperative for us to respond to the challenges ahead in the context of the 1999 budget.

The National Rolling Plan 1999-2001

The 1999-2001 National Rolling Plan will continue to draw inspirations from the broad goals and objectives of the Vision 2010. Consequently, the main objectives of the 1999-2001 National Rolling Plan, will include the following:

a. Diversification of the productive base of the economy through enhanced capacity utilization in industry, increase agricultural productivity, and accelerated development of the gas and solid minerals sectors;

b. Promotion of sustainable economic growth through achievement of macro-economic, exchange rate and fiscal stability as well as prudent monetary policies;

c. Raising income levels and reduction of the level of unemployment through enhanced economic growth and vigorous implementation of poverty alleviation programmes;

d. Facilitating private sector-led growth through the creation of appropriate enabling environment, institutions, policies as well as legal and regulatory framework.

The Focus and Policy Thrust of the 1999 Budget

The main policy objectives, strategies, and programme priorities for the 1999 budget are as follows:

a. Achieving at the minimum, a three per cent overall growth rate of GDP;

b. Establishing institutional, legal and regulatory framework as well as policy reforms necessary for economic growth and diversification;

c. Maintaining appropriate fiscal, monetary and exchange rate policies with a view to achieving overall macro-economic stability;

d. Eliminating the dual exchange rate regime;

e. Continuing the policy of privatisation of state owned enterprises;

f. Sustaining the single digit inflation rate achieved for most of 1998 fiscal year;

g. Enhancing efforts on capacity building and utilization;

i. Sustaining prudent internal and external debt management systems;

j. Reducing the level of unemployment;

k. Expanding the existing revenue base by exploring new sources of income;

l. Improving the internal security system to create a safe environment; and

m. Developing and rehabilitating physical infrastructure to facilitate investments and economic activity.

Revenue Estimates

At the beginning of 1998, the average selling price of crude oil was US$16-17 per barrel. This dropped steadily during the year and by October 1998, the realisable price was US$12.8 per barrel, while the price for January 1999 deliveries is less than US$11.00 per barrel. In view of the slump in the global oil market, the price of US$9 per barrel has been adopted for the 1999 budget.

Based on an exchange rate of N86 to US$1, the sum of N453.7 billion is estimated to accrue as revenue from oil and gas sources in 1999. Non-oil revenue is estimated at N214 billion, bringing the projected total federally collected revenue from oil and non-oil sources in 1999 to N667.7 billion. Given the change in the exchange rate conversion factor, the estimated expected total revenue for 1999 has dropped in real terms by 54 per cent from its 1998 level. The Federal Government gross revenue for 1999 is therefore projected at N146.7 billion.

EXPENDITURE ESTIMATES

Capital Expenditure

As a result of a very tight revenue profile, a sum of N88 billion has been provided for the Capital Development Programme of the Federal Government, compared with the sum of N122 billion in 1998. The focus of the capital budget is to complete some of the on-going projects such as the Federal Secretariat building, the Legislative Buildings and accommodation for our in-coming elected lawmakers. Some projects in the agriculture, health, education, roads, water supply and rural electrification sectors will also be implemented.

In order to further consolidate our efforts towards poverty alleviation and the development of the rural sector, the sum of N1 billion has been provided for FEAP in 1999. Similarly, N500 million has been earmarked for the Peoples Bank and the National Directorate of Employment (NDE) for provision of soft loans and support services to cottage and small-scale industries.

Recurrent Budget

a) A provision of N100 billion has been made for personnel emoluments compared with N56 billion for 1998, to cater for the recent increase in public sector salaries and allowances, as well as the additional expenditures on members and staff of the National Assembly during the year. The provision for overhead expenditure in 1999 has been maintained at 1998 level of N61 billion. Provision for domestic debt in 1999 amounts to N39.0 billion. In addition, the sum of N1 billion is provided for settlement of debt owed to local contractors that have already been verified by the National Economic Intelligence Committee (NEIC). The total recurrent expenditure for 1999 therefore amounts to N211 billion.

b) The overall fiscal deficit for the Federal Government in 1999 is projected at N34.1 billion, representing 1.05 per cent of projected GDP. This deficit is arrived at after taking into consideration anticipated transfers, including draw-down from our external reserves. This year, the projected deficit has been estimated to avoid creating accounting distortions.

STATES AND LOCAL GOVERNMENT FINANCES

In 1999 the Federation Account Revenue is estimated at N262.4 billion. The existing allocation formula will be maintained. Therefore, the Federal Government will receive N127.2 billion; States; N63 billion; Local Government Councils: N52.5 billion; the Federal Capital Territory (FCT) N2.6 billion and Special Funds: N17.1 billion.

In 1999, the estimated VAT amount is N50 billion. The projected increase derives from the fact that the base of VAT will be increased by the expansion of VATable items through reduction of the exemption list. New VAT offices will also be opened in the states to enhance collections. In line with the new VAT distribution formula introduced in this budget the actual allocation to the Federal Government will be reduced to N7.5 billion while that of the states and local governments will accordingly be increased for them to receive N25.0 billion and N17.5 billion respectively.

FISCAL POLICY

Fiscal policy in the last few years has been designed not only to increase revenue but also as an instrument to promote general economic development. This strategy will be reinforced and fine-tuned in 1999 to sharpen the policy instruments and enhance their value towards the attainment of set goals and objectives.

In view of the revenue shortfall, all tiers of government must exercise greater budgetary discipline and concentrate their efforts at enhancing internally generated revenue.

REVIEW OF THE CUSTOMS & EXCISE TARIFF

Since the last tariff adjustment, many manufacturers have made representations on the adverse effects of some of the tariff measures and requested for further adjustments. Consequently, government has approved some adjustments to the customs and excise tariff. Government has also approved the restoration of excise duty on some items such as spirits, cigarettes, tobacco and their derivatives. In addition, a review of the import and export prohibition policies will be undertaken.

In the same vein, with effect from January 1, 1999, Government hereby abolishes the 25 per cent import duty rebate introduced in August 1995 because after three and a half years of application, it can hardly be justified. Similarly, requests for non-statutory exemption from the payment of import duty will henceforth no longer be entertained.

Government appreciates that a number of industries are under considerable pressure from cheap imports which, it is suspected are being dumped in Nigeria. The Ministry of Finance will meet with concerned interest groups at the beginning of the year to discuss ways of addressing this issue. Meanwhile, an anti-dumping committee will be set up soon in the Ministry of Commerce and Tourism. This Committee is to handle cases and complaints relating to dumping, issues of subsidies and countervailing measures to protect Nigeria against unfair trade practices.

EXPORT PROMOTION AND INCENTIVE SCHEMES

Government will continue to implement and streamline existing export incentive schemes and render them more effective.

The various schemes and funds are being merged into a new Manufacture-in-Bond Scheme under which payment of cash incentives to exporters would be replaced with the introduction of Negotiable Duty Credit Certificates (NDCs). In addition to the above incentives, government hereby abolishes the prohibition list in order to encourage competitive pricing and to increase the income of the farmer.

ECOWAS TRADE LIBERALIZATION SCHEME

Nigerian enterprises will be encouraged in 1999 to take full advantage of the protocol on ECOWAS Trade Liberalization Scheme (TLS) which provides for the elimination of trade barriers including taxes and levies. Adequate arrangements will be made to ensure that the implementation of the scheme will not adversely affect our manufactured products.

PORT REFORMS

Government in 1996 introduced some reforms at the ports. These included the expansion of mandatory pre-shipment inspection to cover all imports destined for Nigeria irrespective of value and the source of funding. In addition, the reforms provided for the involvement of Professional Import Duty Administrators (PIDA) in the cargo clearance process. The services of these Administrators, however, will cease with effect from June 30th, 1999.

Problems have arisen in relating to the proliferation of too many agencies in the ports, which has constituted another bureaucratic bottleneck. Accordingly, only the following agencies will henceforth be retained at the ports under the overall supervision of the Nigerian Ports Authority:

a. Nigeria Customs Service

b. The Ports Police

c. Nigeria Immigration Service and

d. Authorized Agents

Where the attention of a specialized agency such as SSS, NDLEA, or Plant Quarantine is required, they would be called from their offices within the Ports. These measures are required to make our ports more attractive to importers and instill sanity. Furthermore, facilities at the ports will be upgraded and modernized through the provision of new equipment and software.

Similarly, at the airports only the Customs and Immigration will be retained, under the general supervision of the Federal Aviation Authority of Nigeria (FAAN). Accordingly, security at our airports will be provided by FAAN.

PRE-SHIPMENT INSPECTION

Government has approved the replacement of pre-shipment inspection with destination inspection with effect from April 1, 1999. It has also approved that the services of pre-shipment export agents will cease with effect from April 1, 1999.

TAX POLICY

The tax policy measures in 1998 will continue in 1999. Given the current trends in global oil prices, measures that will ensure efficient tax administration in the country are essential in order to raise higher revenues from the non-oil tax resources. In 1999, efforts of government will be geared towards widening the VAT base through gradual phasing out of VAT exemptions and intensifying collection of all due taxes. Government will at the same time strengthen the tax authorities to be more effective in the collection of taxes from both individual and corporate taxpayers.

a. Review of VAT Sharing Ratio. For State Governments to prosecute basic projects having greater impact on the lives of people at the grassroots, the present VAT sharing formula is to be adjusted in favour of the States and Local Governments.

b. Incentives to the Oil and Gas Industry. The approved tax incentives in the 1997 and 1998 for the exploitation and utilization of associated gas are to continue in 1999. Most of the earlier incentives have been promulgated into laws. In 1999, all the incentives approved by government will be signed into laws to facilitate a stable tax regime in the country for investors.

c. Production Sharing Contract (PSC). From 1999, all oil operators who signed the PSC Agreements for deep offshore oil exploration production with the Government in 1993 are to claim Investment Tax Credit (ITC) allowance as tax offset in accordance with the various agreements, until the contracts terminate. The NNPC is to compile a list of such companies for the Federal Inland Revenue Service to implement. However, such concession will not be extended to new contracts.

In addition, interest incurred on inter-company loans obtained under terms prevailing in the open market are to qualify as allowable deduction in arriving at taxable petroleum profits.

a) Tax Treaties:- To consolidate the extensive tax incentives to foreign investors, Government will continue with the policy of concluding Double Taxation Agreements (DTA) with our trading partners who indicate their interest in 1999. Further, as a concession to our treaty partners, government has approved a lower treaty rate of 7.5 per cent on dividends, interests, rent, and royalties when paid to a bona-fide beneficial owner of a treaty country.

b) Joint Venture Cash Calls:- Crude oil sales will continue to be our major source of revenue until the national economy is diversified. The funding of petroleum operations is therefore essential. However, in the light of the poor state of our finances, government is currently exploring alternative sources of funding the government shares of the Joint Venture operations with a view to solving the cash call problem permanently. In the same vein, government will consider raising project-tied financing in respect of Joint Venture Projects aimed at encouraging exports in the oil and gas sectors of the economy.

c) Incentives to Gas Sub Sector:- In 1998, Government invested US$300 billion as part of its capital contribution in the third train of the Liquefied Natural Gas project. Generous tax incentives have been given to companies that carry out the exploitation of natural gas and utilize the associated gas for commercial purposes. The incentives will continue in 1999 while details of additional incentives will be provided.

SOLID MINERALS SECTOR

This Administration strongly believes that if proper attention is given to the solid minerals sector, it is capable of generating substantial revenue and employment to supplement those derivable from the oil and non-oil sectors. In 1998 government approved the new Solid Mineral Policy. It also revised laws and regulations to make the sector competitive with those of other mineral-based economies as well as provide generous incentives for prospective investors.

In 1999, Government will continue to attach emphasis to this sector through exploring possibilities for Joint Venture programmes, production sharing and other strategic investments between Nigerian Mining Corporation and Private Investors to facilitate the exploration and exploitation of the country's mineral deposits.

Government has no resources to continuously subsidize inefficient and loss making parastatals. Privatizing such investments has now become a cornerstone of government policy. In pursuing its privatization objectives, government has instituted procedures that are transport to ensure maximum return in the disposal of its assets.

A decree shall be promulgated expeditiously to give legal backing to the privatization programme. Work on the regulatory framework and institutions will also be accelerated.

Competition and Deregulation. In 1998, Government repealed and amended 11 legislation that hitherto inhibited competition or conferred monopoly on public enterprises in petroleum, telecommunications, power and mineral sectors. To further consolidate this policy, government has licensed a few private telecommunication companies. Government is led by the response of the private sector so far to this policy reform. Our statutes are still being reviewed with the aim of elimination completely of all outstanding sectors constraining competition in other sectors.

Elimination of Dual Exchange Rate

The application of the dual exchange rate continues to cause distortions in the economy and offers considerable incentive for round-tripping in our foreign exchange operations. Whereas, public expenditure is transacted at the autonomous rate, revenue is monetised at official rate giving rise to a mis-match between revenue and expenditure. Moreover, economic viability of projects funded at official rate cannot be properly evaluated and may this encourage unprofitable projects. Abolition of the official exchange will remove a long-standing opportunity for personal gain at the expense of the public purse. Accordingly, the official exchange rate is hereby abolished with effect from 1st January, 1999.

Monetary and Credit Policy

The focus of monetary policy during 1999 will remain the maintenance of price stability while at the same time accommodating government's efforts to stimulate output growth. The growth of monetary and credit aggregates will be contained at levels that will guarantee single digit inflation rate. The promotion of the stability of the exchange rate will also be a policy focus.

The CBN will continue to rely on treasury bill sales at market-determined, competitive interest rates, while the range of instruments available for mopping up excess liquidity in the system will be broadened to include issuance of development stocks and national savings certificates.

Government is concerned about the widening gap between savings, deposits and lending rates of Commercial and Merchant Banks. The Central Bank has been directed to discuss with the banks on how to narrow the margin so as to impact positively on bank customers.

Government will provide incentives to banks in 1999 to encourage the provision of medium and long-term facilities to the agricultural and solid minerals sectors as well as to small and medium enterprises. This will assist in the diversification of the economy and the development of non-oil sector in general.

Transfer of Commercial Banking Functions from the CBN to Commercial/Merchant Banks

Government has directed that the commercial banking functions presently performed by the Central Bank of Nigeria (CBN) be transferred to Commercial and Merchant Banks by the end of March, 1999. Ministries and Parastatals will be free to negotiate and reach agreement with Commercial and Merchant Banks subject to the usual clearance with the office of the Accountant General of the Federation.

Conversion of Merchant Banks to Commercial Banks

Government has decided that any merchant bank that so wishes may convert to a commercial bank. This measure is being taken to remove the obvious disabilities presently suffered by merchant banks, especially as the equity base of the two types of banks is now the same. It will also help to deepen banking habits in the country. The CBN will publish the conditions and detailed guidelines for the conversion soon.

Restoration of CBN Autonomy

In recognition of the critical role which an independent central bank can play in the maintenance of price stability and sound economic management the government, after due consideration, has decided to grant the CBN autonomy in the formulation and implementation of monetary policies. The government is convinced that an independent CBN would serve the best interest of our national economy. The relevant law has already been amended.

Capital Market Reform

Government is fully convinced about the need for effective institutional arrangements that will engender stable and strong financial systems. Consequently a number of measures will be taken in 199 pursuant to the on-going capital market reform, to strengthen the market infrastructure.

The Investment and Securities Decree, which will transform the Securities and Exchange Commission into a bigger, stronger and a more effective institution, will be finalized. Efforts will also be continued to ensure the early take-off of the Abuja Stock Exchange.

External Debt Management

For a number of years now the 2 billion US Dollars usually set aside for servicing Nigeria's external debt has fallen below the requirement of our creditors. Even though this practice has resulted in the accumulation of substantial arrears, Government is only able to earmark the sum of 1.5 billion US Dollars for external debt service this year, due to resource constraints in 1999. It has therefore become imperative for us to explore options for reducing our debt service payments to affordable and sustainable levels.

Accordingly, efforts will be intensified to open up negotiations with the Paris Club, Bretton Woods Institutions and other creditors to seek debt reduction and debt relief. The Ministry of Finance will pursue vigorously the achievement of this goal. We have initiated discussion with the Bretton Woods institutions and the Secretariat of the Paris Club towards evolving a programme aimed at eventually attaining debt relief for the country. Government will also continue with the debt conversion programme as a vehicle for debt reduction and investment promotion.

Embargo on External Loans

In view of the projected deficit in the 1999 budget, there is a need for government to broaden the source of funding in order to close the financial gap in the budget. Accordingly, government has lifted the 1994 embargo placed on external borrowing particularly with respect to concessionary and project-tied loans and credits. Furthermore, financing of export-based projects, based on the assets and revenue flows of the enterprise, especially in the gas and oil sectors, will be considered.

Petroleum Products Pricing and Supply

The acute nationwide shortage of petroleum products in the country has become a cause of great concern to the nation. Public sector monopoly of petroleum products supply, along with the unscrupulous acts of unpatriotic citizens, has been the major contributory factor to the shortages.

To ensure a lasting solution to the problem, the importation of petroleum products has been deregulated. Government has also allocated sizeable amounts of funds for the turn-around maintenance and rehabilitation of the Kaduna, Port Harcourt and Warri refineries.

Government is not unaware of the reaction of our people to the recent increase in the price of petroleum products by the oil marketers. Government is thus encouraging the petroleum marketers to enter into discussions with consumer representatives with a view to moderating the prices to sustainable levels.

Priority Projects

A comprehensive list of priority projects is being compiled. The debt component of these projects will be reviewed with a view to restructuring and rescheduling it in line with our cash flow realities.

Wage Increase

About three months ago the Federal Government approved wage increases for public servants and directed state and local governments to negotiate appropriate wage adjustments with their respective employees, based on their financial strengths. Regrettably, with the dwindling government revenues caused by a sharp fall in oil prices, the payment of the recommended wage package has become insupportable and unsustainable for the federal, state and local governments.

As it is not our intention to bequeath the incoming civilian administration with unmanageable economic problems, we are compelled to review the wage increase to affordable and sustainable levels. In this regard, government has entered into discussions with the labour unions with a view to arriving at acceptable wage levels.

Foreign Policy

This Administration will continue, in 1999, to pursue its policy of constructive engagement with other members of the international community. We are committed to ensuring that Nigeria takes its rightful place among the comity of nations based on the principles of mutual respect and protection of our national interests. During the course of 1998, the international community responded positively to our posture of reaching out in accordance with these principles. We appreciate such warm responses and support, and hope the international community will continue to support Nigeria at this crucial stage of our history not only in ensuring the successful implementation of our political transition but also our economic reform programmes.

The global economic recession we are all witnessing of recent in many parts of the world calls for serious concern. Nigeria belongs to an integrated, inter-linked world economy. Given the already existing structural weaknesses of our national economy, we are not immune to the problems ravaging national economies in other parts of the world. To reduce our vulnerability, Nigeria requires substantial capital inflow to complement domestic resources in order to revamp the economy.

Government would, therefore, vigorously pursue economic diplomacy to mobilize the support of the international community for Nigeria's policy reform. This would enable the country to attract foreign investments as well as provide the enabling environment for a more favourable consideration for Nigeria's request for external debt relief. Bilateral talks between Nigeria and other countries and multilateral institutions will also emphasize the issue of trade and development.

National Honours and Awards

This year, government has decided to resuscitate the tradition of conferring National Honours and Awards which has been suspended since 1984. The National Honours and Awards is to honour deserving Nigerians, who have rendered special and outstanding services in their various fields of specialization to the benefit and progress of the nation. As a result of the long break, over 750 recipients will be honoured. The award will be conferred during the early part of the year. It is our hope that the revival of this tradition will motivate the nation's citizens to greater accomplishment.

Democratization Programme

I am happy to note that the democratization programme has been on course. The success of the local government elections and the enthusiasm that Nigerians exhibited in choosing those to govern them demonstrate the efficacy of the democratization programme.

The Report of the Constitution Debate Coordinating Committee has been submitted to Government on schedule. Government will review this report and take a decision on the Committee's submission early in the year. As the military prepares to hand-over the reigns of governance on May 29, 1999, I urge all of us to join hands in ensuring the success of the remaining elections. I once again call on our politicians to play the game according to the rules and eschew the politics of bitterness and unnecessary accusations.

Governance

This administration has repeatedly stressed its determination to combat corruption and improve the governance of our nation. This reflects our firm belief that sound macro-economic policies and structural reforms alone will not be enough to put Nigeria on the path of sustainable growth. We must, therefore, also tackle the pervasive corruption and the deterioration in the rule of law which stand in the way of a great nation.

It is in this light that the funding of the Judiciary and the Nigeria Police Force will be enhanced to adequate and sustainable levels. The administration has also approved the appointment of additional Justices of the Supreme Court and Court of Appeal, while their retirement age and that of Chief Judges of the State High Courts has been extended to 70 years.

Budgetary and National Discipline

My dear country men and women, let me at this juncture draw your attention to the sacrifice and discipline required for the successful implementation of the 1999 budget. Given the uncertain and dwindling nature of our revenue from oil upon which we are heavily dependent, there must be great prudence in government expenditures. Public officers in ministries and extra-ministerial departments must ensure that expenditures are incurred for only essential purposes, in order to control overhead costs. The Ministry of Finance, in conjunction with the Office of Secretary to the Government of the Federation will put in place necessary measures to control costs and wasteful expenditures. This calls for cooperation and sacrifice on the part of all government employees.

This administration is, of course, fully aware of the sacrifices already being made by its workers. Indeed, we are painfully aware of the sacrifices all Nigerians have been making these past years. This is why we are anxious to put in place policy measures designed to bring long-lasting relief to our citizens. Unfortunately, however, as in treating malignant diseases, curative measures bring pain first before the desired relief. Our economy has long been in a malignant state. We do urge our fellow countrymen to appreciate this. We are confident that before long, our remedial policy actions would bring relief to our homes.

This administration is also aware of the dissatisfaction among certain segments of our population arising from certain government actions or inactions in the past. Genuine as such grievances may be, we cannot allow the continued reckless expression of such feelings. The developments in the oil producing areas of Niger-Delta region is a case in point. While we appreciate the feelings of the people in the area over their sad condition, this administration notes with great displeasure the disruptions of the activities of oil companies government and private enterprises by rampaging youths. Seizure of oil wells, rigs and platforms as well as hostage-taking and vehicular-hijacking, all in the name of expressing grievances are totally unacceptable to this administration.

We are no doubt committed to freedom of expression, the right to dissent, and all other basic freedoms and rights that are the hallmarks of a decent, civilized open society. The recent activities in the Niger-Delta region are a flagrant abuse of our commitment to such rights and freedoms. This administration will not allow lawlessness and anarchy to camouflage as right or freedom. We will not accept brazen challenge to the State authority under threat of violence as recently happened in the Niger-Delta region. Government has a responsibility to safeguard the State and the security of life and property of all its citizens and those of foreign nationals on our soil carrying out their legitimate occupations. This administration is resolved to do just that.

I will, therefore, appeal to all those that have been engaged in the unacceptable excesses of the recent past in the region to stop such actions henceforth, in the interest of peace and decency. This administration is convinced that the Niger-Delta region stands to reap tremendous dividend by dissent through dialogue rather than dissent through violence. Such is the path to a civilized and great society which we are all striving to build.

Conclusion

Finally, I must express sincere and heartfelt appreciation to all and sundry for the very warm support and cooperation they have accorded this administration since our assumption of office last June. This has constituted the bedrock upon which the success of the democratization programme has been constructed. It is my hope and expectation that we can continue to rely on your goodwill, support and prayers as we march towards the emergence of democratic governance in the country.

I wish you a happy and prosperous 1999 and a happy Eid el-Fitr in advance. Thank you and God bless us all.