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Financial Discipline: Making Every Naira Count By Kemi Adeosun Finance Minister / Financial Discipline… Making Every Naira Count. By Kemi Adeosun / Financial Discipline… Making Every Naira Count. - Kemi Adeosun (2) (3) (4)
Financial Discipline… Making Every Naira Count- By Kemi Adeosun by Amoto94(m): 8:26am On Mar 09, 2016 |
Financial Discipline… making every Naira count.
By Kemi Adeosun
Discipline... it is all in the detail.
Economists have long found Nigeria to be
something of a conundrum. The macro picture
has always appeared compelling - large
population, oil reserves, mineral reserves,
endless tracts of arable land, land and sea
borders for regional domination. Indeed the
absurdity of our underperformance is only
surpassed by our ability to accurately quantify
our losses and missed opportunities.
In the short period that I have been privileged
to serve as Minister of Finance, I have
observed that even the most basic systems and
controls over the management of our
resources are in dire need of strengthening.
While we are regaled with and shocked by
details of amounts stolen, diverted or wasted,
we must face the cold reality that such acts are
facilitated by weaknesses in our systems. Even
if we successfully prosecute and jail every
looter, ghost worker and other economic
saboteur, there is every risk that those caught
will only be replaced by persons who are just
as bad, or worse - unless we radically
strengthen our systems and institutions.
Our President’s brave and committed fight
against corruption and waste is as much an
economic crusade as it is a moral one. The
objective is not just to stem the corruption and
loss but to execute an economic plan to
channel those monies into much needed areas
that will support and reposition the economy.
In short, the fight against corruption is not
about “retribution” and meting out
punishment, it is about releasing funds for our
economy. I am humbled to be part of the
ongoing work on recovery and can report that
the urgency in the work, especially our
interface with nations where our money has
been stashed, is propelled by our need for
funds to invest into our economy.
Our economic plans are not about austerity and
frugality; if that were the case then we would
not be attempting an expansionary budget. We
could have pursued fiscal consolidation and
maintained 2015 budget size, and then
introduced severe public spending cuts to
balance the books by laying off workers and
cutting projects. Had we done so, we would by
now be the darling of the IMF and other multi-
laterals.
Conversely, we are undertaking an ambitious
counter cyclical strategy to stimulate our
sluggish economy and expanding government
spending with a focus on infrastructure, the
true catalyst for economic growth. This will
have contractors returning to site and re-
engaging workers, it will see new projects
commencing, arrears released and economic
activity reinvigorated across the nation. We
plan to take advantage of low global prices for
commodities and contract prices. Existing
contracts are being renegotiated downwards,
with significant savings recorded and new
projects priced to reflect current commercial
realities. Our spending stimulus is private
sector driven, supported by a robust
procurement system that will see permanent
local capacity built in a number of sectors
including oil and gas, housing construction and
agriculture. However, and this is the key
differentiator, we plan to spend in a disciplined
manner that will extract the maximum value
for every naira spent.
The process of building the internal control
framework to support this need for disciplined
spending has begun in earnest. Our Efficiency
Unit has reviewed four years of detailed
expenditure data to identify trends and is
already negotiating volume discounts that
appropriately reflect the buying power of
government. Personnel remains our largest
cost. In addition to the BVN driven cleaning of
our payrolls that has so far removed 23,000
fraudulent entries, we have initiated
significantly stronger controls over our payroll.
These efforts will exert a constant downward
pressure on personnel costs until such a time
as we have assurance that every payment is
accurate and valid. A similar process is now
commencing in Pensions. The N160 Billion
spent monthly on personnel and pensions
related costs demands this as an absolute
minimum.
The revenue focus is non oil. We are revisiting
historical decisions that are no longer in the
best interests of the national economy. The
establishment of various Boards and Parastatals
to undertake the operational and revenue
generating business of government was a well-
intentioned attempt to provide separation
from policy makers. However, as the economy
has grown, so too has the revenue earned in
these agencies and their financial autonomy
has grown in a manner that no longer fully
serves the public interest. Port charges,
maritime charges, airport landing fees, visa
charges, passport charges, telecoms licence
fees, among many others, must be tracked and
accounted for. While the Fiscal Responsibility
Act was designed to provide control, actual
compliance has been poor. The result has been
leakage on a staggering scale, as findings from
our ongoing audits suggest. This is a serious
issue. The upside is a significant revenue
opportunity which the TSA implementation has
given us sight of, and which we are supporting
with a proactive drive for improved
accountability.
At the same time, our traditional revenue
sources are being supported to be more
effective. In Customs, we are making the
necessary investments in container scanners
and other equipment required to improve
collection efficiency. This is combined with the
results of a compensation survey which will see
the introduction of performance related pay, to
reduce corruption and create an alignment of
interest that will enhance revenue generation.
With FIRS there is a well-defined plan to
enhance compliance by widening the tax net.
Using data to drive tax compliance, we will
ensure that the tax regime is efficiently
administered and that everyone pays their fair
share.
There is a need for disciplined and effective
system of managing our financial resources to
ensure maximum value. We will no longer
measure performance by the size of our
budget or the amount disbursed; we must
measure by the impact of that expenditure on
the lives of Nigerians. To measure and manage
this we have already made some key changes
in the way funds are released. We have
abandoned the old system of capital releases
that funnelled a proportional share of available
funds released to each Ministry, Department
and Agency. We have a robust system in place
where funds are tied to specific outcomes as
documented by each agency. This is being
supported by follow up reviews to ensure
implementation.
As Benjamin Disraeli once said, “We are not
creatures of circumstance; we are creators of
circumstance.” I am firmly convinced that
Nigeria is on the right path. The path of
discipline will confront some age old
destructive habits. It will challenge some
unwritten rules, and I personally will step on
some highly placed toes on this journey. All
this I am fully prepared for, and so I do not
expect nor do I particularly want to be popular.
However, I will act in the best interest of all
Nigerians to ensure that we build the economy
that we desire and richly deserve.
This is the second of three articles by Mrs.
Kemi Adeosun, Minister of Finance, Federal
Republic of Nigeria. |
Re: Financial Discipline… Making Every Naira Count- By Kemi Adeosun by Cutehector(m): 8:28am On Mar 09, 2016 |
D lady fine sha |
Re: Financial Discipline… Making Every Naira Count- By Kemi Adeosun by Nobody: 9:11am On Mar 09, 2016 |
If not that I'm already bound to missy89 in body, soul & spirit, I would have started exploring avenues through which this woman can bear me atleast 2 sons and I'd name them Shaposhnikov & Nikologorsky. 1 Like |
Re: Financial Discipline… Making Every Naira Count- By Kemi Adeosun by Nobody: 9:16am On Mar 09, 2016 |
Plaetton, Bevista, we need your input on this thread. |
Re: Financial Discipline… Making Every Naira Count- By Kemi Adeosun by Standing5(m): 9:26am On Mar 09, 2016 |
Ride on sister Kemi. We are not creature of circumstances but creator of circumstances. Effeciency unit too is there waiting to trim the recurrent looting margin of the MDAs who have hitherto used supply of basic commodity like pen, paper and table water to cheat the nation. |
Re: Financial Discipline… Making Every Naira Count- By Kemi Adeosun by Bevista: 9:27am On Mar 09, 2016 |
Even though this may not be considered a comprehensive economic policy, it atleast provides us with some form of direction and thinking of government. I wish all ministers could engage with the public in this way so people could be informed about direction of their various ministries. 1 Like |
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