MINISTER OF FINANCE AT THE PLATFORM, SAYS FG BUILDING A PRODUCTIVE, INCLUSIVE NIGERIAN ECONOMY
The Minister of Finance, Mrs Kemi Adeosun, has said that the administration of President Muhammadu Buhari is building a productive Nigerian economy for a sustainable and inclusive economic growth.
The Minister said this while speaking on Sunday at “The Platform” hosted by the Covenant Christian Centre, Lagos.
She said that the Federal Government was calling for greater focus on the productive sectors of the economy to drive inclusive and sustainable economic growth in the country.
She said: “while mistakes have been made in the past, this administration is looking ahead and laying the ground work to build a resilient economy that is not vulnerable to boom and bust cycles.”
Other speakers at the event included, the Vice President, Professor Yemi Osinbajo, Former Governor of Anambra State, Peter Obi, Professor of Economics Ahmadu Bello University, Professor Abdulraheem Garba, and Chief Economist & Financial Analyst PWC, Andrew Nevin. Others were Prince Bimbo Olashore and Mrs. Nimi Akinkugbe.
The Minister noted that Government revenue remains overly reliant on oil and we must use oil revenue to develop and diversify the economy, not just sustain consumption.
She pointed out that “While oil proceeds have represented between 50 percent and 70 percent of Federal Government revenue over the past 3 years, it has contributed 10% or less to Gross Domestic Product (GDP) in the same period”.
Mrs. Adeosun emphasised that “we must change our growth model to deliver inclusive and sustainable growth by broadening the range of our economic activities in the production and distribution of goods and services.”
She said that the Federal Government wants to create jobs for the people and to do this, we must look beyond the extractive industry. We must invest across the value chain in Agriculture, Construction, Manufacturing and Trade to localise production, processing and distribution. This will create jobs, drive innovation and support knowledge transfer to local businesses.
Adeosun said, “Our focus is on activities that are value adding to the economy to ensure long-term stability. The infrastructure that we build to facilitate power and transportation will be vital in achieving diversification and economic growth. We are focused on addressing the challenges we face to deliver services to our people”.
The Government is investing in massive domestic fertilizer production, making it cheaper to grow the food we need and raw materials to support moribund industries. We are also investing in rail - making it quicker and cheaper to get produce across the country. Our pilot programme has shown that we can reduce the cost of food if we can move it across the country faster.
The Minister noted that Small and Medium Enterprises (SMEs) are critical to broadening our revenue base and we must make it easier for them to do business.
“We will increase our support for innovation and entrepreneurship. Our people are our greatest assets and we must invest in them to build human capital”, she said.
We are also looking very closely at broadening our tax base and improving tax compliance to increase Government revenue: “We have an unacceptably low level of non-oil revenue, and much of that is driven by a failure to collect tax revenues. With a tax to GDP ratio of only 6%, one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth”.
We are going to focus on tax in 2017. We will improve our tax to GDP ratio, block leakages and increase compliance. We would also introduce taxes on luxury items and excise duties on tobacco and alcohol.
The Minister explained to the audience that: “More diversified economy would reduce revenue volatility in the long term, encourage more inclusive growth and reduce inequality. With increased Government revenue, we can invest further and faster, delivering further improvements in 2017 and beyond.”
FEDERAL MINISTRY OF FINANCE REBUTS ALLEGATION OF US$2 MILLION PR CONSULTANCY
The attention of the Federal Ministry of Finance has been drawn to an inaccurate report by one Simon Ateba of an online publication, the Simon Ateba News, to the effect that the Ministry has hired a United Kingdom-based Public Relations Consultant for US$2 million (N800 million) monthly. This claim is clearly false, malicious and devoid of professionalism as no attempt was made to contact the Minister for input to the story.
The Public Relations firm, Africa Practice which has an operational office and Nigerian staff in Lagos, has been retained by the Federal Government for N28, 975,000 only for three years on the approval of the Federal Executive Council in November 2016 to work for the Debt Management Office as part of the Eurobond programme alongside Standard Chartered Bank, Stanbic IBTC Holdings PLC, Citibank, WHITE & CASE LLP and Banwo & Ighodalo. This followed a competitive tender that was advertised in International and Local newspapers, including the Federal Tenders Journal. Due process was fully followed in the exercise, the outcome of which was publicly announced earlier this year.
The key criteria used in the evaluation of the Technical Bids submitted by the appointed transaction partners including Africapractice were company track record and credentials; evidence of valid licence to operate in the market or jurisdiction in which they are domiciled; global presence, transaction history with the Federal Government or any of its agencies; experience in similar transactions in the international capital market and quality of marketing and distribution strategy for the Eurobond programme.
The representative of Africa Practice was in Washington DC in continuation of the Eurobond programme and in support of the country’s outreach with international investors who showed great enthusiasm to do business with Nigeria.
However, the false story has not dimmed the successful participation of the Nigerian delegation in the World Bank and IMF Spring meetings, nor questioned the obvious gains made by Nigeria in the course of the meetings as widely reported by correspondents of Nigerian media houses that covered the meetings.
The Minister of Finance, Mrs. Kemi Adeosun, has always appreciated the contribution of Nigerian journalists, whom she hold in high esteem, for the coverage they gave to the activities of the Nigerian delegation to the Spring Meetings in Washington DC and at home.
FG CLEARS N54 BILLION PENSION BACKLOG
Concerned about the plight of pensioners who retired under the Contributory Pension Scheme without being paid, the Federal Government has cleared the inherited arrears of accrued pension benefit for the year 2014, 2015 and 2016 by releasing N41.5 billion to the National Pension Commission (PENCOM) for onward payment to the retirees, Minister of Finance, Mrs. Kemi Adeosun has disclosed.
The Minister also announced that the sum of N12.5 billion being outstanding for January, February and March 2017 has been settled based on 2016 appropriation, bringing the tally to over N54 billion.
"Despite conflicting demands for available cash, President Muhammadu Buhari has always expressed concern about the plight of workers and pensioners. Consistent with this, we have released N41.5 billion which clears the arrears inherited from the previous administration relating to the period 2013-15 and underpayments in 2016. This will bring relief to thousands of our elders who have served and deserve to be paid their entitlements promptly and fully,” Mrs. Kemi Adeosun emphasised.
The N41, 566, 565, 184 released to PENCOM was the outstanding appropriated for the year 2014 and 2016 by the National Assembly for the settlement of the retirement benefits of Federal Government employees.
She explained further that “the amount we paid includes arrears and the impact is that those who retired as far back as 2013, who had been unable to access pension under the contributory scheme due to non-payment, will now be paid.”
To avoid future accumulation of pension arrears, Mrs. Adeosun assured that henceforth “the monthly allocation to the PENCOM based on the appropriation of 2017 will regularly be paid along with monthly salaries of Ministries, Departments and Agencies (MDAs).”
ADEOSUN TAKES ECONOMIC REFORM AGENDA TO WORLD BANK SPRING MEETINGS
Calls for greater African and international collaboration on illicit financial flows to drive accelerated revenue growth and improved government efficiency.
The Honourable Minister of Finance, Kemi Adeosun, is in Washington DC this week, attending the World Bank and IMF Spring Meetings. The Minister is participating in a range of events focused on different aspects of the Federal Government’s economic reform agenda. At her opening event on Monday, she gave an address to the Global Parliamentary Conference, alongside parliamentarians from around the world, focused on Nigeria’s economic reform agenda and the need for strong executive and legislative collaboration.
Addressing senior representatives from the World Bank and IMF, as well as over 150 parliamentarians the Minister called for greater focus on collaboration in illicit financial flows from Africa as a core pillar of the government’s strategy to significantly enhance domestic government revenue and deliver sustainable economic growth.
“The government is focused on resetting the Nigerian economy by addressing our traditional over-reliance on oil revenues and establishing the basis for sustainable non-oil revenue growth. To improve non-oil revenues, we have to address illicit capital flows. When stolen money is transferred from Nigeria, or other African countries, there are too few questions asked by those countries that receive the funds, but when we identify those funds as stolen and seek to recover them, there are too many questions being asked. There is money sitting in foreign bank accounts that we have spent over a decade trying to recover. That is money that could deliver significant value for Nigeria as we seek to increase spending on critical infrastructure and establish a basis for long term sustainable growth. I hope that the Automatic Exchange of Information scheme coming into force next year will be a step towards achieving greater transparency, but we need more collaboration amongst parliamentarians in Africa, and across the World to ensure that this situation improves and that recipient countries are held to account.”
Commenting on the domestic agenda to ensure significant reductions in ‘leakages’ of public funds, and improved efficiency in public expenditure, the Minister said:
“We are going after those who have stolen our money. We have put in place a very successful whistle blower programme that is delivering results, and allows those who report illicit activity to receive up to 5% of any funds that we recover. We are also significantly improving our financial management controls to ensure that it is considerably more difficult for public funds to be diverted. We have to do more though and that means collaboration with the legislature. We need tighter tax and financial reporting legislation and to ratify bilateral agreements so that our enforcement agencies are empowered to deliver the results that we need.”
The Minister will be attending a series of meetings over the coming days, including meetings with the World Bank to take forwards conversations about lending into strategic sectors of the economy as part of the administration’s focus on addressing Nigeria’s infrastructure deficit and accelerating implementation of critical projects.
“To create the basis for long term growth, we need to invest urgently in our infrastructure. Achieving energy sufficiency and achieving agriculture and food security are two of the execution priorities we have identified in the Economic Recovery and Growth Plan and we are looking forward to advancing our ongoing conversations with multilateral lenders on these priorities over the coming days as we look to accelerate implementation.”
The Minister will also speak at fora on how to improve Nutrition and how to close the Financing Gap for Water Resources.