The present administration’s three-point agenda, since 2015, includes to improve security, fight corruption, and grow the economy.
The finance ministry is pivotal to the realisation of the agenda on the economy. The ministry is in charge of the fiscal policy and providing direction for the economy.
The ministry’s main responsibility was to liaise with the monetary policy authority, like the Central Bank of Nigeria (CBN), and other agencies like the Debt Management Office (DMO), to build economic structures to ensure financial system stability and create the environment that is enabling for economic growth.
As minister for finance since November 2015, Kemi Adeosun had the task of driving the agenda for the country’s economic recovery. Her tenure ended on September 14, 2018, as she was compelled to resign from office after a PREMIUM TIMES report showed she was parading a forged National Youth Service Corps (NYSC) certificate, a criminal offence by Nigerian law.
PREMIUM TIMES reported how Mrs Adeosun skipped the mandatory NYSC service and procured a forged exemption certificate she used in securing plum public service appointments, including her appointment as minister. Since her exit, Zainab Ahmed has acted as finance minister.
Finance ministry’s achievements under Adeosun
Mrs Adeosun, during her tenure, deployed her experience to initiate policies, mobilise financing and steer the austere economy out of troubled waters.
Although the economy sank into recession in the second quarter of 2016 after three consecutive contractions in the gross domestic product (GDP) negative growth, Mrs Adeosun was able to finance the economy back afloat.
From about -2.34 per cent in 2016, the economy recovered in the second quarter of 2017 with a 0.72 per cent growth and continued the sustained rise, albeit slowly, to the current 1.81 per cent in the third quarter of 2018.
Creation of Efficiency Unit
To help cut down on the high recurrent expenditure profile of ministries departments and agencies, the Efficiency Unit was created in the finance ministry to ensure all government expenditures received the best possible value for money.
The unit was responsible for reviewing non-wage related overhead expenditures, including travel costs, entertainment, events, printing, IT consumables, and stationeries.
The ultimate objective was to cut down on wastage – by eliminating duplication, promote efficiency and encourage best procurement practices to guarantee savings for the economy.
The government estimated that about N15 billion was saved annually from the services of the Efficiency Unit, while the capital expenditure component of the budget was reduced from the usual 80/20 ratio to about 70/30 in one year.
Presidential Initiative on Continuous Audit (PICA)
Mrs Adeosun facilitated the creation of the Presidential Initiative on Continuous Audit (PICA), to validate financial controls, assess risks, prune personnel costs, ensure compliance with public financial management reforms, detect errors and make recommendations to ensure full accountability of all government expenditures.
PICA has been involved in conducting personnel audits in MDAs, like the Pension Transitional Arrangement Directorate (PTAD) and former Nigeria Airways workers, to remove ghost workers from government payrolls, verification of subsidy claims by petroleum products marketers, and recovery of salaries paid to ex-diplomats.
Introduction of the whistle-blower policy
Again, the former minister introduced the whistle-blower policy, to encourage Nigerians to volunteer information to the government on all acts of public corruption.
Essentially, the policy promoted a reward system where citizens were entitled to at least 5 per cent of the total value of recovery by the government from a reported corruption act.
As of July 2017, the minister said over 2,500 reports on various corruption acts were received through various reporting channels, with 365 of them being actionable tips.
The minister said the tips were related to issues of contract inflation, ghost workers, illegal recruitment, misappropriation of public funds, illegal sale of government assets, diversion of revenues and violation of Treasury Single Account (TSA) regulations, which also received increased enforcement under her administration.
Voluntary Assets and Income Declaration Scheme (VAIDS)
Mrs Adeosun also initiated the Voluntary Assets and Income Declaration Scheme (VAIDS), which granted defaulting taxpayers a one-year amnesty period to regularise their tax status.
As at May 2017, the minister said the scheme, undertaken by the Federal Inland Revenue Service (FIRS) in conjunction with the Ministry of Finance and the State Joint Tax Authorities, uncovered only 14 million out of an estimated 70 million potential taxpayers that were economically active.
FIRS chairman, Tunde Fowler, said the federal government realised over N1.17 trillion revenue in the first quarter of 2018 through VAIDS, apart from about 7,500 jobs created for young Nigerians as Community Tax Liaison Officers (CTLOs).
Asset Tracking and Management Project/ Central Asset Register
The ministry, under Mrs Adeosun, also launched an Asset Tracking and Management Project through which government could locate, identify, assess and evaluate all its movable and immovable assets.
Similarly, a Central Asset Register was created in the Federal Ministry of Finance for recording the actual quantity, value, condition, and location of all the capital assets belonging to the federal government.
Global Eurobond issues
Although the administration came at a time global oil prices had dropped to all-time low levels, the ministry was able to mobilise financing from within and outside the country for key infrastructure projects at a scale unprecedented in the country.
In 2017, Nigeria accessed the International Capital Market (ICM) thrice with Eurobonds issuances totalling $4.5 billion.
Details of the Eurobond issues showed that on February 16 of the year, about $1 billion bond, with a 15 years tenor, fixed coupon 7.875 per cent per annum and yield of 7.875 per cent, was issued to fund capital expenditure in the 2016 budget. The maturity date is February 16, 2032.
On April 5, another $500 million bond, expected to mature on February 16, 2032, with 15 years tenor; fixed coupon 7.875 per cent per annum and yield 7.500 per cent, was issued to fund capital expenditure in the 2016 budget.
In addition, a $1.5 billion bond was issued on November 28 to fund capital expenditure in the 2017 Budget and redemption of Nigeria Treasury Bills (NTBs). The tenor for the bond was 10 years, at a fixed coupon rate, with yield of about 6.500 per cent per annum each and maturity date of November 28, 2027.
Similarly, on November 28, $1.5 billion bond was issued to fund capital expenditure in the 2017 Budget and redemption of Nigeria Treasury Bills (NTBs). It had a 30-year tenor; fixed coupon 7.625 per cent per annum with a yield of 7.625 per cent and maturity date for November 28, 2047.
Settlement of outstanding workers’ liabilities, pension debts
With the recoveries and various cost-cutting measures, the ministry says it has been able to clear all the inherited arrears of pension benefits to civil servants for 2014, 2015 and 2016 and ensure regular payment of salaries as well as refund of all Paris Club Loans over-deduction debts to the 36 states of the federation in the last three years.
Establishment of strategic lending institutions
Also, to support industrialisation and credits to Small and Medium Scale Enterprises (SMEs), the ministry said it was able to facilitate the establishment of the Development Bank of Nigeria (DBN) to spur growth of micro, small and medium enterprises (MSMEs).
In 2016, the ministry reached an agreement with the International Monetary Fund (IMF), the World Bank Group, African Development Bank and the European Investment Bank for $1.3 billion for the take-off of the DBN in the first quarter of 2017.
To provide funding at subsidised interest rates through Development Finance Institutions (DFIs) such as the Bank of Industry, Development Bank of Nigeria and Bank of Agriculture, the ministry said it facilitated funding and access to these agencies.
Various initiatives being financed the Government Enterprise and Empowerment Programme (GEEP) with N27.4 billion in interest-free loans account for about 1.1 million beneficiaries so far, across the 36 states of the federation, under the TradeMoni, MarketMoni, and FarmerMoni, among others.
Financing of civil servants’ low-cost housing scheme
Again, the ministry has, within the last three years, successfully, launched a N13 billion Federal Civil Servants Mortgage Refinancing Scheme through the Nigeria Mortgage Refinance Company (NMRC), to refinance mortgages for 5,635 beneficiaries in the federal civil service.
Wider enforcement of the Treasury Single Account (TSA)/IPPIS
Apart from the wider enforcement of the Treasury Single Account (TSA) system, which was virtually dormant under previous administrations, the ministry has been able to enforce the application of the Integrated Personnel Payroll Information System (IPPIS) in the computation of human resource data and preparation of salaries and other remuneration of all MDAs.
Funding of NSIA economic projects
The ministry has also been able to transfer additional funding from the Excess Crude Oil Revenue savings to the Nigeria Sovereign Investment Authority (NSIA), managers of the $1.5 billion Sovereign Wealth Fund (SWF), to finance some projects targeting some high growth sectors of the country’s economy.
In August 2016, the NSIA announced two major interventions in the housing and agriculture sector – a $500 million fund for Real Estate and a $200 million fund for agricultural development.
To boost local production of fertiliser, the NSIA financed the rehabilitation of about 16 moribund fertilizer-blending plants across the country with a combined installed capacity of over 2.63 million metric tonnes of NPK fertilizers.
The Managing Director of NSIA, Uche Orji, said the programme eliminates the importation of fertilizer and ensures the commodity was being sold at government subsidised prices of N5,500 against the market rate of N8,000 as well as create an estimated 50,000 direct jobs in the agricultural sector.
CBN FOREX, agricultural interventions
The interventions of the Central Bank of Nigeria, through the policy to restrict allocation of foreign exchange for the importation of 42 Items as well as the Anchor Borrowers Programme can be said to be another achievement of the finance ministry in the last three years.
Under the FOREX policy, the country has been able to achieve a relatively stable exchange rate of the Naira to the dollar since 2015, while the Anchor borrowers Programme has resulted in the increased local production of rice.
Illegal releases in NASS
Arguably the worst actions taken by Mrs Adeosun as finance minister were the illegal releases she approved for the National Assembly. PREMIUM TIMES reported how Mrs Adeosun released billions of Naira to the National Assembly, outside of their budgetary allocations. Payments were also made by the finance ministry to unregistered companies for controversial contracts they did with the National Assembly.
Zainab Ahmed takes over
Some of the achievements recorded in the last three years despite significant revenue shortfall include refund of $5.4 billion Paris Club Loans over deductions; payment of $6.8 billion Joint Venture (JV) Cash Call arrears to the operators; payment of N1.9 trillion contractor/Export Expansion Grant (EEG) and refund N488 billion to various state government for the construction of federal roads nationwide.
Settle outstanding pension, other liabilities
Again, Mrs Ahmed said the ministry released about N54 billion recently to settle outstanding pension arrears up to March 2017, while over 2,000 former workers of the defunct Nigeria Airways Limited were also paid their entitlements through the Pension Commission (PENCOM) based on verification by PICA.
Besides, she said the ministry, through PTAD, has been making monthly payments to 9,215 former workers of NITEL/Mtel after over 12 years, while over N571million gratuity and arrears was paid to 174 Biafra War affected retired police officers (WARPRO) in October 2017.
Convictions for indicted ghost workers
She said the ministry has secured the conviction of four civil servants indicted for compromising the IPPIS platform, with 11 others currently under investigation by the Economic and Financial Crimes Commission (EFCC).
Several initiatives by the ministry to recover public funds, the minister said, have yielded positive results, with the whistle-blower unit recovering over N8.5 billion and $465 million from the 1,051 investigations conducted from tip-offs received.
The FIRS said it received about N47.5 billion the tax amnesty collection as at December 17, 2018, while Project Lighthouse is to be unveiled to allow the use of data analytics to provide intelligence on eligible taxpayers and their real taxable incomes and assets.
The roll-out of the IPPIS to all MDAs is planned for 2019 along with the optimisation of the Government Integrated Financial Management Information System (GIFMIS), and improved public financial management system to ensure an efficient and cost-effective public service delivery.
Funding for the Presidential Infrastructure Development Fund (PIDF projects)
The ministry says it has released about ₦97 billion through the Presidential Infrastructure Development Fund (PIDF) managed by the NSIA for execution of some critical, strategic socio-economic infrastructure projects.
The projects included the Lagos-Ibadan Expressway, (Second Niger Bridge, Abuja-Kano Expressway, Mambilla Hydro-Power, and East-West Road.
Budget Support to States
Besides, the minister said about N1.9 trillion Budget Support Facility was released to states to assist them meet their salary and pension obligations.