by Nduka Chiejina


State governments will soon smile to the banks as the federal government has concluded plans to commence the final phase of the Paris Club debt refunds.

Addressing journalists in Abuja on Thursday on the state of the economy, Minister of Finance Zainab Ahmed disclosed: “The total sum of N649.434 billion was verified by the Ministry as the outstanding balance to be refunded to the State Governments.”

She also revealed the payments made by the Central Bank of Nigeria as at March 2019 stands at N691.560 billion.

“The increase in CBN payments partly arose from exchange rate differential at the point of payment,” she said.

Ahmed, while not divulging the status of the states with regards to the Paris Club disbursements noted “some states still have outstanding balances, which will be refunded, in due course.”

The finance minister also stated that a total sum of N4.8 trillion was distributed to the three-tiers of government between September 2018 and April 2019 from the Federation Account noting “the sum of N784.7 billion realized from value added tax (VAT) for the same period was also shared.”

Speaking on Nigeria’s growing debt profile, the finance minister stated “the debt increase from N12.2 trillion to N23.0 trillion is by design.”

The Federal Government, she said “designed the Economic Recovery and Growth Plan (ERGP) to reflate the economy to take us out of recession when we came on board and we made an assessment, it was clear that our country was going into recession.

“When we did a research on the best way to reverse the recession was to reflate the economy and that means putting resources in the economy so that consumption will increase.”

Based on government’s findings, she said they “designed the ERGP to borrow in the first, second and third years and in the fourth year the borrowing was supposed to start reducing. That is exactly what we have done.”

Defending the borrowing, Zainab Ahmed said government “made sure that we borrowed to finance capital projects.

“At the same time we went into recession there were other countries similar to Nigeria that went into recession. Some of them are still not out of recession but because of the method we adopted.

“But the consequence of course is the increase in debt and that is why the ministry of finance and all its agencies are working to make sure that we increase revenues.”

She reiterated “at 19.09% Debt to GDP ratio we still are the lowest comparative to countries like Brazil, South Africa that all have an average of 56% debt to GDP ratio.

“If you look at our budget the debt service to GDP ratio is 30% but because revenues underperformed it went as high as 50% to 55% and in some months up to 60%. So if our revenues perform optimally we are in a good place as far as revenues are concerned.”

The finance minister said the country’s External Reserves grew from $28.3 billion in 2015 to US $44.69 billion as at May 13, 2019.

“This represents a significant improvement that has helped to stabilize the economy, including stabilizing our exchange rates,” she stated.

Also the Foreign Exchange (FX) market, she said, “remains relatively stable because from 2017 to now there is a significant convergence of the NIFEX and NAFEX windows and they have in fact merged by the end of November 2018.

… recovers N605bn via whistleblower policy

Ifeanyi Onuba, Abuja



The Federal Government will soon release the sum of N649.43bn as the final refund for the Paris Club debt to state governments.

The Minister of Finance, Mrs Zainab Ahmed, gave the figure on Thursday in Abuja during a media briefing on the activities of her ministry.

Those present at the media briefing were the Comptroller-General of Customs, Hameed Ali; the Director-General, Debt Management Office, Patience Oniha; the Managing Director, Asset Management Corporation of Nigeria, and the Director-General of the Securities and Exchange Commission.

The finance minister said the amount had already been verified by the ministry as the outstanding balance to be refunded to the state governments.

Ahmed said the refund would be made to the state governments in due course.

She said, “For the final phase of the Paris Club debts refunds, the total sum of N649.434bn was verified by the ministry as the outstanding balance to be refunded to the state governments.

“The payments made by the Central Bank of Nigeria as of March 2019 is N691.56bn. The increase in CBN payments partly arose from the exchange rate differential at the point of payment. Although some states still have outstanding balances, they will be refunded in due course.”

She said that between June 20, 2018, when the 2018 budget was signed into law by President Muhammadu Buhari and May 14, 2019, the Federal Government had released a total of N2.079tn to finance the capital components of the 2018 budget.

The Federal Government had as of March 29 put the total amount released for capital projects at N1.9tn.

This means that between March 29 and May 14, a fresh sum of N170bn had been released to Ministries, Departments and Agencies of government for the implementation of the capital component of the 2018 budget.

The 2018 budget, signed by President Muhammadu Buhari on June 20 last year, had total spending of N9.1tn.

The capital expenditure was to gulp 31.5 per cent of the total expenditure at N2.87tn, while the recurrent non-debt spending was put at N3.51tn in 2018.

There was also a provision of N2.01tn for debt servicing, which is 21 per cent of the total budget, while a provision of N177bn to retire maturing bond to local contractors was made by the government.

Speaking at the event, Ahmed explained that the government would continue the implementation of the capital component of the 2018 budget until the coming into operation of the 2019 budget.

She said that the assessment of the 2019 Appropriation Bill, which was passed by the National Assembly, would soon be completed and a report sent to President Buhari for consideration.

The minister explained that the constitution provided for spending the current year’s budget on a provisional basis for salaries and recurrent expenditure, adding that the capital budget for 2018 was still running until the new budget came into place.

She said, “We have a situation whereby we have two different periods running side by side. So, at any point in time, we have a budget that is running.

“The law allows us on a provisional basis to run 50 per cent of the previous year’s provision on the current year’s budget.

“When the budget is assented to, we will now transfer all the transactions that have happened to the 2019 budget, so there is no gap.”

Ahmed, however, said that the executive would work with the ninth National Assembly, to streamline the process and return to the January to December budget cycle year.

On implementation of the new National Minimum Wage, she said that the financial implications had been worked out by the Presidential Committee set up by Buhari adding that the report had been submitted to the president.

She said the report had already been locked into adding that what was being worked on now was how the salary increment would be financed.

She added, “We have looked at the report and what we are working on now is how we can finance it.

“Apart from the increase of the minimum wage from N18, 000 to N30, 000, there is also a consequential adjustment that we have to negotiate with the labour unions.

“The total implication of that would be worked out only after the negotiations and that would involve determining how much increase every other employee above the minimum wage would get.

“It could be a flat amount or a proportion, but the other aspect that is clear is that there would be an increase for the National Youth Service Corps as well because, by the Act, they should earn at least the minimum wage and the NYSC also has to increase to that N30, 000.

“So, because we have not done the negotiation with labour, I cannot give you the details of what we are projecting because it is simply on projections.

“At the end of the day, it is what we agree with labour that will be the amount that is due.”

On the whistleblower policy, the finance minister said the Federal Government had recovered about N605bn through the implementation of the policy and that of the Presidential Initiative on Continuous Audit.

The whistleblower policy, which was launched in December 2016, was aimed at addressing the issues of corruption in the management of government resources.

She said among the figure was the savings of N8.3bn during the first quarter of 2019.

She added, “As part of this administration’s zero tolerance on corruption, PICA’s findings on ghost workers have been acted on by convicting some.

Islie:




https://thenationonlineng.net/states-to-get-n649bn-paris-club-fund/