₦airaland Forum

FEDERAL MINISTRY OF FINANCE

News Release. January 8, 2013

PREMIUM TIMES VIDEO OF OKONJO-IWEALA’S APPEARANCE BEFORE HOUSE FINANCE COMMITTEE IS DOCTORED

It has come to our attention that the online news website, Premium Times has uploaded a doctored video of the last appearance of the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala before the House of Representatives Committee on Finance.

The video is substantially different from the one which Channels TV independently recorded and uploaded which many Nigerians have seen.

The Premium Times video has been edited to leave out important aspects with the clear intention to make the Coordinating Minister look like the aggressor during the appearance. This is absolutely false.

Many aspects of the encounter which captured the provocation of the Chair of the Committee were edited out to give a wrong impression.

For instance, the new video left out his hostile statement “you can decide what happens only in the Federal Ministry of Finance and other ministers you coordinate but you cannot decide what will happen in the committee”.

This was after the minister indicated her willingness to answer the questions along with the Director General of the Budget Office of the Federation and the Accountant General of the Federation.

Also edited out, amongst others, was the unilateral banging of the gavel by the Chair of the Committee to abruptly terminate the proceedings and the astonished reactions of the audience.

Significantly, Premium Times did not identify the source of the video which it described as an “exclusive”.

The clear objective is to deceive Nigerians who were rightly outraged by the treatment meted out to the Minister. But we are confident that Nigerians are too wise to fall for this antic.

Below is the link to the authentic video account of the encounter as captured by Channels TV.


https://www.youtube.com/watch?v=gnU6FxLnni4&feature=player_embedded


Many thanks.


Paul C Nwabuikwu
Special Adviser to the Coordinating Minister and Minister of Finance

By The Citizen

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, says the Federal Government has created 1.6 million jobs in the past 12 months.

Okonjo-Iweala disclosed this during her presentation at an interactive session with the private sector, where she said that a total of 432,021 jobs were created during the first quarter of the year, adding that this figure represented about 11.69 per cent increase over the number of jobs created during the fourth quarter of 2012.

She stated, 'We have created 1.6 million jobs in the past 12 months. 431,021 jobs were created in the first quarter of 2013, showing an upward trend in job creation and an increase of 11.69 per cent from the fourth quarter of 2012.'

Okonjo-Iweala said a key government programme focused on direct job creation was the Community Service Scheme, which aims to engage 320,000 youths in labour intensive work such as construction and rehabilitation of social and economic infrastructure.

According to her presentation, about 120,000 people have been employed so far under the scheme, which is being anchored by the Subsidy Re-Investment Programme.

She also listed the Graduate Internship Scheme, which aims to attach 50,000 graduates to competent firms to enhance skills development towards employability. She noted that 4,000 graduates had emerged so far under the scheme.

According to Okonjo-Iweala, who spoke on the 'Economy's macroeconomic performance for 2013 and the outlook for 2014,' the Gross Domestic Product growth is expected at 6.75 per cent at the end of 2013, up from 6.61 per cent in 2012.

She recalled that the GDP growth in the first three quarters of 2013 stood at 6.56 per cent, 6.18 per cent and 6.81 per cent respectively.

The minister noted that economic growth during the year had continued to be driven by the non-oil sector.

However, she lamented that the rate of economic growth as well as the quality of growth had been very slow, underscoring the need for improvement.

'Nigeria needs to grow faster in the job-creating sectors at between nine to10 per cent per annum to create the number of jobs needed to substantially reduce poverty,' she said, adding, 'GDP rebasing, which is currently in progress, could increase GDP substantially but its impact on growth rates is not yet certain.'

She further noted, 'Economic growth needs to be more inclusive as inequality is high and rising in Nigeria; this needs to be reversed.'

In order to achieve this, the minister said the Federal Government would in 2014 make efforts to 'remove structural bottlenecks' in sectors as power, ports, rail, roads, communication technology (broadband) and aviation.

Also, there will be an improvement in the business climate and efforts will be made to reduce bureaucracy and fight corruption.

She gave the assurance that the government would in 2014 enact supportive polices for sectoral growth in agriculture, housing, manufacturing, creative industries, solid minerals, oil and gas and petrochemicals, among others.

'We will also build social safety nets for vulnerable women, children, and the disabled to address regional disparities,' she added.

SOURCE: http://www.thenigerianvoice.com/nvnews/132826/1/govt-created-16-million-jobs-in-12-months-okonjo-i.html

US investors Wilbur Milhouse and Robert Blackwell: Nigeria is open for business

By Wilbur Milhouse and Robert Blackwell

As has always been the case, American businessmen and entrepreneurs are looking for new global markets for investments. Relatively quietly, Nigeria has become an attractive market for American businesses. If fact, the largest and most important market in Africa has become one of the 20 global destinations for Foreign Direct Investment, and Nigeria receives the largest amount of Foreign Direct Investment (FDI) in Africa.

Over the past few years the Nigerian government has put an emphasis on economic reform, and through privatization, global businesses have created opportunities in Nigeria as a result of the government allowing private ownership of previously government-owned operations.

By fighting corruption and helping create a business-friendly environment, President Goodluck Jonathan has helped make Nigeria the preferred destination for investors to do business. As a result, jobs are abundant. Nigeria's future continues to be bright for Nigerians as the creation of wealth escalates to new heights and the local economy continues to prosper.

A new generation of entrepreneurs and leaders in Africa and, more specifically, Nigeria are helping make Africa a place for innovation and exceptional growth. With bright minds flocking to the country, the new business-friendly government is ready to take the next step as direct foreign investments continue to grow and the Nigerian economy becomes increasingly more robust. These measures are evidenced by the fact that Nigeria has been recognized among the "Next Eleven" economies as one of the countries with the greatest potential to become one of the largest economies in the 21st century, alongside other emerging economies including Brazil, Russia, India and China.

Competitiveness drives profitability. That is what investors are seeking worldwide. Beyond multinational corporations, entrepreneurs and small- and medium-sized business enterprises are also investing in Nigeria. By taking advantage of available opportunities, building up a thorough understanding of the business and socio-cultural environment and familiarity with local business rules, the future for investors in Nigeria is bright.

After visiting Nigeria and talking to their leaders and the country's citizens on the ground, one becomes convinced that Nigeria is a "can't miss" opportunity for global investors. It is for this reason that more and more American companies are directly investing in Nigeria. The list runs the gamut, from large corporations such as General Electric to small- and medium-sized businesses such as ours. If one wants to invest in a foreign market with a business-friendly environment, a solid workforce and an understanding of what it takes to be successful, then Nigeria is the place to be. Best stated: Nigeria is open for business.

Milhouse is president and CEO of Milhouse Engineering and Construction. Blackwell is the founder and CEO of Killerspin and Electronic Knowledge Interchange.

Source: http://thehill.com/blogs/global-affairs/guest-commentary/193700-us-investors-wilbur-milhouse-and-robert-blackwell

In a bid to curb importation of fake products into the country, the Federal Government has issued fresh guidelines for cargo clearance at the ports and borders post nationwide.

A memo dated December 3, the Minister of Finance and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala directed the Comptroller-General of Customs, Alhaji Dikko Abdullahi, that the guidelines takes effect from December 1.

Under the new regime, all documents must bear the product name, country of origin, specifications, manufacturer, date and batch number, standards of production (e.g. Network Information Services (NIS), British Standards PD. International Organisation for Standardisation (ISO), International Energy Standards (IES), and Documentation Identification Number (DIN).

All goods, according to the guidelines, must be labelled in English, in addition to any other language of transaction; otherwise such goods should be confiscated by Customs.

According to the letter, all imports shall be accompanied by the following documents:

-Combined Certificate of Value and Origin (CCVO) contain the following information.

-e-Form ‘M’ No:

-Adequate description of goods;

-Port of destination. (The actual port shall be specified e.g Tin-Can, Apapa, Kano, Onne, etc);

-Shipment identification, date of shipment, Country of Origin, Country of Supply.

-Packing List.

-Shipped/Clean on Board Bill of Lading/Airway Bill/Railway Bill/Road Waybill.

-Manufacturer’s Certificate of production, the Phytosanitary Certificate or Chemical Analysis Report, which must state the standards.

- Laboratory test certificates for chemicals, foods, beverages, pharmaceuticals, electrical appliances, and other regulated products are also required from importers.

The letter, signed by the Director, Home Finance, K Zaji, said any intending importer should in the first instance, process e-Form ‘M’ through any authorised dealer bank irrespective of the value and whether or not payment is involved.

The first validity period of the e-Form ‘M’ for general merchandise, Zaji said, would be six months, which he said, may be extended for another six months by the dealer.

The government, according to the memo, has granted an initial validity period of 365 days to capital goods with approved e-Form ‘M’, and the maximum extension of another 365 days is allowed.

But any subsequent request for revalidation and consideration of e-Form ‘M’ after the maximum 365 days extension period can only be granted by the Director, Trade and Exchange Department, Central Bank of Nigeria (CBN).

Supporting documents shall be clearly marked “Valid for Forex” or “Not Valid for Forex” as appropriate i.e. whether or not foreign exchange remittance would be involved.

Also, all applications for goods subject to Destination Inspection (DI), Zaji said, must carry the “BA” code, while those exempted shall include “CB” in the prefix of the numbering system of the e-Form ‘M’. Importers intending to make payments for goods exempted under the D I scheme, the government said, would not be allowed to do so in the Foreign Exchange Market, except there is a prior approval from the CBN.

Importers are also advised to ensure that the e-Form ‘M’ and the relevant pro-forma invoice carry a proper description of goods to be imported to facilitate price verification as follows:

-Generic product name i.e. product type, category:

-Mark or brand name of the product, where applicable;

-Model name and/or model or reference number, where applicable;

-Description of the quality, grade, specification, capacity, size, performance, etc;

-Quantity and packaging and/or packing.
The letter said the e-Form ‘M’ would be valid for importation if it is acceptable to the Nigeria Customs Service (NCS).

Authorised dealers were therefore, advised to confirm registration of the e-Form ‘M’ from Customs before proceeding with other import processes.Where import items such as food, drinks, cosmetics, drugs, medical devices, chemicals are required for health or environmental reasons, the new law demands that such items must carry Expiry Dates or the shelf life.

A minimum of half-shelf life of such products are necessary as at the time of importation and the active ingredients must be specified, where applicable.Electrical appliances such as fluorescent lamps, electric bulbs, electric irons and ties, the government said, must carry information on life performance while cables shall carry information on the ratings.

All electronic equipment and instruments, the guideline stated, must carry the following:

-Instructions Manual;

-Safety information and or safety signs;

-A guaranty/warranty of at least six months.

Importation of blank products by any importer is no longer allowed as such goods would be seized and destroys by Customs without warning, and the importer if arrested, would be prosecuted.

CREDIT: Vanguard, December 15, 2013

FEDERAL MINISTRY OF FINANCE
News Release. December 10, 2013

CAMPAIGN OF CALUMNY AGAINST
OKONJO-IWEALA WILL FAIL

In the past few weeks, the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala has been the subject of high profile media attacks from several quarters.

The aim of these elements is to unduly politicise the management of the economy through a campaign of falsehoods and distortions.

The pronouncements of these political vested interests are based on false information and outright lies disguised as objective comments.
Fortunately Nigerians are wise to their antics and this campaign to damage the name of the Coordinating Minister, like previous ones, will fail.

We urge Nigerians to continue to be vigilant to the increasingly desperate actions of these elements. Where appropriate, we will continue to clarify the issues and point out the true situation in specific areas of the country’s economic management.

Many thanks.

Paul C Nwabuikwu
Special Adviser to the Coordinating Minister for the Economy and Minister of Finance

Nigeria: Statement At the Conclusion of the IMF Article IV Consultation Mission to Nigeria

An International Monetary Fund (IMF) mission visited Nigeria during November 13-26 to conduct discussions for the 2013 Article IV consultation.

The mission met with Finance Minister and Coordinator Minister of the Economy Ngozi Okonjo-Iweala, Central Bank of Nigeria Governor Sanusi Lamido Sanusi, senior government officials, members of the Legislature, and representatives of the private sector. At the conclusion of the visit, Mr. Gene Leon, the Fund's mission chief and senior resident representative in Nigeria, issued the following statement:

"Nigeria's economy has continued to perform strongly in 2013. Real GDP grew by 6.8 percent in the third quarter of 2013 (compared to third quarter 2012), supported by robust performances in agriculture, services, and trade.

Oil theft/production losses have adversely impacted export receipts and government revenues, leading to a significant drawdown from the Excess Crude Account.

Inflation declined to 7.8 percent (end-September 2013) from 12 percent at end 2012, in part owing to lower food prices and monetary policy implemented by the Central Bank of Nigeria (CBN). The exchange rate has been stable, and the banking sector is well capitalized with low levels of non-performing loans.

"Although the outlook is positive, risks need to be managed. Growth is projected to increase to about 7 percent in 2014, while inflation should remain subdued in the single digits.

Nigeria could be affected, however, by a decline in oil prices, the pace of recovery in global economic and financial conditions, capital outflows, continued losses in oil production, or increased security concerns.

At the same time, the economy can manage such shocks given a relatively flexible exchange rate regime, improved financial crisis management capacity, and a stable banking system. But fiscal buffers are low and a sustained high rate of growth is needed to reduce unemployment, and poverty.

"Fiscal consolidation is progressing well, and the momentum needs to be preserved through the ongoing election cycle. Key public financial management reforms are underway, including the implementation of a Treasury Single Account (TSA) and integrated information management systems, but lower-than-budgeted oil revenues are impacting budgetary plans at Federal, State, and Local levels and highlighting the need for rebuilding fiscal buffers to manage oil revenue volatility.

Moving toward a sustainable non-oil primary deficit path will require resolve in continuing fiscal consolidation, including through resisting procyclical election spending, mobilizing non-oil revenue, improving efficiency in the public sector, and strengthening transparency in oil sector governance.

"The current monetary stance is appropriate and should remain geared towards sustaining low inflation and a stable financial system.

Managing liquidity in the banking system remains a priority, and will be aided by the implementation of the TSA and prudent fiscal management. Likewise, the CBN has maintained stability of the naira, containing inflation and facilitating business confidence.

However, the continued importance of oil receipts and the magnitude of portfolio flows present potential vulnerabilities, and exchange rate flexibility may be a useful tool in the event of persistent pressures.

Ongoing initiatives to strengthen the supervisory framework, including supervision of banking groups, should continue, and Asset Management Corporation of Nigeria's activities phased out gradually.

"To promote inclusive growth and mitigate the impact of vulnerabilities, ongoing structural and institutional reforms should be pursued resolutely.

The 20/20 Vision and the Transformation Agenda provide a framework for ongoing reforms, including the privatization of the generation and distribution of energy, initiatives to increase food security and viability of agriculture, and programs funded through the Universal Basic Education Commission to improve human capital development.

In addition, access to financial services for small-and medium-size enterprises, which have been key in many countries to enabling all to benefit from growth, could be improved.

Other initiatives to improve the business environment and investment promotion could support diversification across sectors, but should be underpinned mainly by improvements in productivity and competitiveness.

Growth in the next decade will need to rely on the continued implementation of reforms to strengthen institutions, improve efficiency, and prioritize quality infrastructure investments.

"The mission would like to thank the authorities and technical staff for their excellent cooperation."

SOURCE: http://allafrica.com/stories/201312051298.html?viewall=1

by Nigerian Finance Minister Ngozi Okonjo-Iweala

The time is right for concerted international action on domestic resource mobilisation in the developing world. Recent high performance on collecting taxes and other domestic resources in developing countries shows that if properly harnessed and managed, domestic revenue can be a very important and sustainable source of long term finance for economic development and reducing poverty.

Increasing income from domestic resources makes countries less dependent on aid, which can be highly unpredictable. Recently, aid volatility has been exacerbated by frequent fiscal challenges faced by many donor countries. More domestic financial flows would also make low and middle income countries less exposed to donor conditionality, allowing them to choose their own development priorities to meet their citizens’ needs. What’s more, mobilising domestic resources demands good governance and prudent resource management in order to meet taxpayers’ aspirations. In other words, if governments want people to appreciate the need to pay taxes, they must use the extra revenue on high-impact and result-oriented interventions to significantly reduce poverty, inequality, and unemployment and meet other social needs.

According to a recent African Development Bank report, tax revenue collection has improved in many African countries since the 1990s. Overall tax receipts in Africa increased from about 22 percent of GDP in 1990, to about 27 percent of GDP in 2007. However there was some variation across countries.

Tax revenue in low-income African countries was still below 15 percent of GDP – the conventional IMF threshold for satisfactory tax performance, and a level deemed by the United Nations to be insufficient to achieve the Millennium Development Goals.

Some problems in developing countries are illicit financial outflows, mostly due to looting by corrupt leaders and government officials, tax base erosion and profit shifting by multinationals, multiple tax incentives, informal activities not being included in the revenue base, and illicit domestic flows.Embezzlement of public funds by corrupt officials has become disturbingly pervasive, especially in mineral resource-rich countries in Africa. Also, over-dependence on aid or on abnormal profits from natural resources can make governments oblivious to their potential to raise revenue from other sources. All involved in the Global Partnership should coordinate their efforts to resolve these problems.

Effective development co-operation can boost countries’ own revenue-raising efforts by scaling up donor assistance, as well as sharing knowledge and expertise. It can help develop existing country revenue collection institutions, support reforms and improve accountability mechanisms. It should also help to track progress on institutional and capacity developments using country frameworks. More expertise is needed for tax officials in developing countries conducting tax policy analyses and designing tax policies appropriate to local country conditions. Investing development aid in building tax systems can yield impressive returns but only limited funds have been targeted toward this sector so far.

With donor support, developing countries’ governments can invest more in building their own technical capacities, in researching international best practices and in improving their negotiation skills to help them receive maximum benefit from new natural resource contracts. Above all, development frameworks for increasing domestic resource mobilisation should be home-driven and tailored to each country’s specific needs and circumstances, in line with the Busan Partnership Agreement’s first principle of country ownership.

Domestic resource mobilisation is one of the Global Partnership for Effective Development Co-operation’s top priorities for action at its first High-level meeting, to be held in Mexico City in April 2014. As we prepare, I call on all Global Partnership stakeholders including development co-operation providers and recipients, civil society, parliamentarians, and private businesses, to reflect on these issues. With their input, we can have fruitful dialogue to determine how the challenges of domestic resource mobilisation can be properly integrated to the post-2015 development agenda.

It is also imperative that the meeting addresses development co-operation providers’ accountability for timely delivery on their commitments to support these efforts. I believe strongly that the Mexico meeting can better position development co-operation to address the challenges of domestic resource mobilisation in low and middle income countries.

---
Dr. Ngozi Okonjo-Iweala is Nigeria’s Coordinating Minister for Economy and Minister of Finance. From 2007-2011, she was Managing Director of the World Bank, responsible for overseeing the Bank’s operations in Africa, South Asia, Europe, and Central Asia. She spearheaded several World Bank initiatives to assist low-income countries during the food crisis and the later financial crisis. In 2010, she was chair of the World Bank’s successful drive to raise $49.3 billion in grants and low interest credit for the world’s poorest countries.

CREDIT: http://devcooperation.org/2013/12/01/from-taxes-to-illicit-flows-how-can-effective-development-co-operation-mobilise-domestic-resources/

November 21 2013 at 08:00am
By Stephan Richter

On a day last month when the US government was still shut down and the streets of Washington were emptier than usual, it was a refreshing contrast to meet Nigeria’s Finance and Economy Minister, Ngozi Okonjo-Iweala.

Okonjo-Iweala is clearly a woman on a mission. She is also a realist. She knows that on a range of critical issues, the stakes are very high for her and her fellow reformers in Nigeria.

From ongoing corruption to explosive population growth, much can go wrong with her country’s future. But the minister is clearly guided by a strong sense of being present at the creation of a new Nigeria.

Africa’s most populous nation faces big challenges, none bigger than youth unemployment, which is at levels close to the Spanish and Greek numbers.

But unlike in those two countries, staggeringly large numbers of entrants to the jobs market will need to find employment in Nigeria every year.

Nigeria may become the third-largest country in terms of population by the end of the 21st century.

To deal with that enormous challenge, the government has initiated a multitude of initiatives, such as promoting youth skills and entrepreneurship. Okonjo-Iweala, in particular, has seen to it that more of Nigeria’s oil money is swept into the government’s coffers.

The reason is simple: the oil wealth that Nigeria has must be used well. The country has large investment needs, not just in infrastructure, but also in education and the economy.

At a time when many in the West tend to pooh-pooh the virtues of prudent macroeconomic management, Okonjo-Iweala (almost) comes across as a fan of the Washington Consensus. And why not? Africa, long considered the world’s “sick man”, may be finding its way, even independently of the recent boom in commodities, says the minister.

A key part of the equation, she argues, is that in many African countries a healthy crop of technically competent and politically adept policymakers has taken the reins in the economic and financial sectors.

Nigeria’s President Goodluck Jonathan surprised his countrymen when he removed all fuel subsidies on January 1, 2012. Although a large oil producer, Nigeria imports about 85 percent of its petrol because of the frail state of its own refineries. The subsidies were thus a huge strain on the country’s budget.

As in many other countries where such support has been removed, such as Indonesia, strikes and demonstrations followed. But while reformers in such countries caved in, Jonathan compromised. He reinstated some subsidies, but is committed to their complete removal.

In order to get ahead on the long to-do list, Okonjo-Iweala is more than aware that this is a time when her country and others in Africa must put the pedal to the metal as regards economic growth. “Let’s not become complacent,” she says.

Nigeria’s 6 percent growth rate seems remarkable in comparison with global rates. However, when rapid population growth is factored in, it is not at all that impressive. Making real headway in positioning the country for a prosperous future would require Chinese-sized growth rates in the low double-digits, she says.

Her government is also relying more on the market and the private sector to help deal with some of Nigeria’s most vexing challenges, such as providing its energy sector with more capacity.

For all the progress, big issues remain. According to international statistics, Nigeria has the most school-age children who are not attending any school.

Nigeria accounts for 10 million of the 53 million such children globally, although the minister has data-related doubts about whether that dubious honour and the overall number reflect reality.

Even so, there is no doubt in her mind that education is the key to Nigeria’s future. Education also plays the key role in reducing the fertility rate. There is no better path to managing future population growth than keeping girls in school.

While Nigeria benefits handsomely from being well endowed with oil riches, the sector is coming under new forms of pressure. Corruption has long been a big problem in the oil sector, but now production is declining.

Increased domestic consumption may even endanger the country’s ability to export much oil in the future. That would seriously dent export earnings and the national budget.

That is not a prospect any finance minister could welcome. At the same time, Okonjo-Iweala is fully aware that relying on oil revenues is a big fallacy.

While it can provide crucial resources, “oil doesn’t really create any jobs”. It is mostly a capital-intensive industry and, given recent trends in the sector, bound to become ever more so.

The centenary celebration of the unification of northern and southern Nigeria in January 1914 is just around the corner.

Despite the deep-seated economic and political problems in the country’s north – especially related to Boko Haram, which has just been listed as a terrorist group by the US – Nigeria’s reformist government is trying to preserve its momentum. A key to success will be whether the country’s middle class keeps growing.

Income inequality continues to be a challenge, even though Okonjo-Iweala is quick to highlight that, on this key issue of moving gradually towards democratic equity, her country is performing better than Brazil and South Africa.

As economy and finance minister, she cautions against the simplistic enthusiasm of Western firms entering the Nigerian market. Many of them have a habit of just extrapolating population growth into (assumed) revenue growth and profits. It seems as if she perceives a certain amount of Western naiveté in this regard, a kind of replay of the once sky-high hopes Westerners had for penetrating China’s market.

Even if the day of the interview had not been one on which the US government was largely shut down, talking with Nigeria’s economy and finance minister gives one a distinct feeling of a person driven by a very clear-eyed can-do spirit.

Where others would just throw up their hands in view of the tremendous challenges, she is keen to persevere.

“If I hadn’t felt that this was really the time to bring fundamental change to my home country, I wouldn’t have taken the job when our president asked me to join his team,” she says.

* Stephan Richter is the publisher and editor-in-chief of theglobalist.com. Follow the Globalist on Twitter: @theGlobalist.

SOURCE: http://www.iol.co.za/business/opinion/yes-we-can-woman-controls-nigerian-finances-1.1610129#.Uo4jycRwrc0

The Federal Government, on Tuesday, said that N120 billion had been saved through detection of ghost workers in the various government Ministries, Departments and Agencies (MDAs).
Dr Ngozi Okonjo-Iweala, the co-ordinating Minister for the Economy and Minister of Finance, made the disclosure at FBN Capital Third Annual Investors Conference held in Lagos.

Okonjo-Iweala said that the figure was N20 billion higher than the N100 billion earlier discovered by the government in February 2013.

She said that government would continue to cover the leakages in the economy to reduce recurrent expenditure and promote development of infrastructure.

“The major problem that distorted current expenditure in the country was the across-the-board increase in salary in 2010,” she said.

Okonjo-Iweala, who spoke on the theme: “2014 and beyond: Managing Growth Prospects and Challenges,” pledged that government would further reduce its recurrent expenditure in 2014 budget.

The minister said that government would continue with its fiscal consolidation to increase job creation and provision of the necessary social amenities.

Okonjo-Iweala said the nation’s Gross Domestic Product (GDP) would be rebased to reflect the growth recorded by various sectors of the economy.

She said that the GDP growth of 10 per cent would remain government’s target in the years ahead.

SOURCE: Nigerian Tribune

By Ifreke Inyang

At the just concluded 2013 IMF World Bank Group Meeting in Washington the Nigerian delegation led by the Minister of Finance and Coordinating Minister of the Economy Dr. Mrs. Ngozi Okonjo-Iweala attended meetings back to back and it was difficult tracking them down for a chat. It was at the end of the meetings on Sunday at 6 PM Washington time, that the minister finally had time to brief the Nigeria corps of reporters who converge at the World Bank building in the Washington cold.

Some were severing like ants but they have to wait for a staff of the World Bank to take them up to the office the Nigerian delegation shared with other African countries. Perhaps because of the tight schedule, the CBN Governor Sanusi Lamido Sanusi who usually spices up the briefing was absent. His voice of support for the minister was missed.

What was discussed at the various inside the IMF/World Bank Group Annual Meetings?

Outside of finding out what is happening with the economics of the Globe and what precautions or actions we need to take as Nigerians, is the advice that the Bretten Woods Institutions are giving members and I think they was one or two key messages that came out of this meeting.

The first is that the IMF as well as the World Bank feels that the global environment is still quite uncertain, even though growth is recovering in the euro zone and in the U.S. But there is still some uncertainties. I think the growth projections have actually been revised down and I can give you the numbers, but what is worrying almost everybody is the two twin impasses that exist in the US.

The impasse over the budget that is the fiscal impasse in the US and the second is the impasse over the lifting of the debt ceiling for which a dead line will be reached this Thursday and if they do not resolve it. It means the US technically will default on its debt, which is not acceptable, and has never happened. This could create adverse movement in interest rates and other parameters within the world economy which could in fact trigger some serious consequences. Every delegate was more or less saying that it will be very helpful to the rest of the world if the US Congress and the Government could resolve this so as to remove the uncertainties that this is creating in the global market.

What are the institutions saying of emerging economies?

Against this picture however, the emerging market countries have also seen slowed growth. Several of them like India have seen growth up to five per cent, Brazil, South Africa they have all seen slower growth. The low income countries are growing robustly and in Africa as you know they are predicting more than five per cent growth for the continent. I think the key issues that that were analyzed are that what could be the vulnerabilities, what are the interconnections, what could be the spillover effect as the economists call them from all this uncertainties. Also of the emerging markets what does this mean to them. These are some of the issues that were talked about

Any suggestions on what countries should do?

More importantly what do countries need to do to protect themselves from these uncertainties? Their advice for countries such as ours is to build buffer strongly which means you should build up your reserves, put aside some savings because you do not know what else is going to happen, manage your expenditures better to protect yourself in case the world should slip back into a recession or other adverse consequences could occur because of these uncertainties. Those are the kind of things that we learned here for us specifically in terms of our macro economics management. Those are the things we have to take into account.

What is Nigeria delegation taking home from the meetings?

Now for Nigeria in addition to hearing this advise, we also heard some very good news and that good news came on two fronts the World Bank Group, that is the World Bank IFC arm through the World Bank President has made known that they want Nigeria to be one of the focus country in Sub-Saharan Africa for their efforts on infrastructure development particularly power which means they are willing to work with Nigeria to invest hundreds of millions of dollars.

They have a lending programme of about 100 billion dollars a year but they are willing to use that to pull in more resources from the US through the power Africa initiative from the private sector using the office of IFC to help us address infrastructure problem. So the World Bank is planning to set up infrastructure facilities unit that has just been put together and been talked about and they also said that when this is done, Nigeria will be one of the first countries they will like to be a beneficiary of this giving its large size infrastructure needs.

Which sector are they focusing on?

They want to concentrate on power, as I said and they are already actively working with several private sector power companies that want to invest in Nigeria. They are also promising to give us another seven hundred million dollar in guarantees for the power sector, IBRD guarantees as well as willingness to invest 700 million dollars in transmission.

Are they interested in the power sector only?

We also discuss with them a social safety net issues. We discuss with them how to improve employment creation, how to help those at the bottom end of the ladder who may not even benefit from jobs and they are planning a social safety net programnme of about 400 million dollars which they are going to prepare with us, it is actually called social safety net programme which will support some ongoing work that we are doing like saving one million lives programme, that helps with maternal mortality.

There is conditional cash transfers to help improve maternal and infant mortality ratios, train health workers, train mid-wive’s to deliver this services and to improve the nutrition, children immunisation, HIV Aids and malaria. They want to assist with the health related issues and also to provide a source of income at the bottom end of the ladder, they have put aside some money for that.

We also got pledges to help with our statistics. I think the chief statistician is ready to help us improve our statistics. On a general note we got a lot of commendation for the agenda budgeting programme that Mr. President launched in 2013 budget. We had another high level meeting looking at women empowerment and Nigeria got a lot of praise for the effort the president has made in getting more women into the cabinet but most importantly, the concrete effort we are making in the budget with this Gender budgeting.

As you know, we have five pilot ministries, ministry of women affairs and our self’s are working with which we announced in last year’s budget that they integrate into their mainstream the goal of getting women empowered within their programmes. If they do so they will get additional budget and we set aside three billion naira as incentive for that.

This programme has gotten a lot of notice. The Ministry of Agriculture, Ministry of Communications and Technology, Ministry of Water Resources and Ministry of Works and Ministry of Health are all participating in this pledge and each one has pledged to meet the goal.

Works has pledged that they will get about 200 women, they plan to mainstream attention to women by training women contractors and sub contractors trying to make sure that some contracts are awarded to women owned businesses within the works ministry and training women contractors in both health, agriculture communication technology have come together to say that they will want to reach about 5 million women with mobile telephone that can allow them have an E-wallet system for their agriculture input, fertilizers and seeds.

They can also receive extension messages on those phones telling them how to plant their crops. They can also receive advise on health through those phones and that will be a very important addition, so these are some of the things we did through that gender programme and we presented it here and it was highly acclaimed actually to the point where they said they were going to get community of finance ministers in other countries to try these approach of integrating gender into their budget.

Did you meet with any other development partner?

We also had meetings here with the USASID and they also made some pledges. The administrator of USASID said they will also want to work with us on the power sector in co-financing with the world bank They came to work with us previously on social the safety net as well and U know, they are willing to put some existing monies to rearrange that into additional programmes for us in those areas.

So really, what we saw here was a whole lot of excitements and support for what Nigeria is trying to achieve.

Why Standard and Poor rating now?

The other bit of good news is that the ratings agencies met with us to finalise their ratings and that the first one has reported which is Standard and Poor, you already have that out in the news. They reaffirmed Nigeria’s strong, economic position whilst admitting that the country faces challenges which we all know, so that has not been hidden under the table.

They have talked about the issue of short fall in oil and oil theft, they have talked about the employment issues, the inequalities issues, all these things are on the table but in spite of all that, they recognise the attractiveness of Nigeria as an investments destinations and the strong macroeconomic management that is underpinning the country’s economy as well as the strong growth prospect, you know, so we got that news, so we are waiting for, which say by next week and eventually down the lines for Moody’s own assessment.

Is the Nigeria Sovereign wealth planning to invest in infrastructure?

Absolutely, the NSWF, is here also, although I have not seen them, but I know they have been around, they have been talking with IFC, and you know, the NSWF is looking at several infrastructure project, I think they have already announced that their board has approved their participation in second Niger Bridge. They are looking at several other projects from some dam, irrigation and water projects in the north of the country to other infrastructure projects in the south of the country, so they are looking and will be announcing their investments decisions soon.

That’s going on, and they are actually pulling in, as you know, like they are talking to IFC which might co-invest with them; other sovereign wealth funds are also looking forward to co-investing. They are even trying to pull pension funds; but that is going on whilst at the same time, this effort to increase infrastructure financing from other organisations, they are all working in parallel but also talking to each other.

You know, so the Sovereign Wealth Fund is doing all of these but this is an additional effort by the world bank to help us finance transmission, yeah we had to raise $1.9 billion, there is an emergency assistance programme that the ministry of power has said it is necessary to get our transmission going and that is over the next two to three years.

Why is a World Bank guarantee needed for power?

Because we have so many independent providers generating power so we are signing many power purchase agreement and many of them want to be backed by guarantee.

She further to said that “on the guarantees there were no special conditionality as this was going to support the private sector, so all they want is that the sector investment itself is buyable and that we have signed a proper power project agreement that protects the private investor and also protects government. And in other for the private sector to access this guarantee there may be specific things within the private sector project that they may want them to do.

What are these multilateral agencies really trying to do with Nigeria?

What they are really trying to do is helping us to mitigate risk, with private sector investing in the power sector, there is risk. These multilateral agencies intervention is meant to make them more comfortable, since we are developing into a private market for power in a way we never did, their participation will make investors comfortable to participate in this because this money is there to back and provide a guarantee in case their investment do not quite work out in a way that they thought.

Because we have so many independent providers generating power so we are signing many power purchase agreement and many of them want to be backed by guarantee.

What is the conditionality attached to these guarantees?

There is no special conditionality attached to the guarantees as this is to support the private sector, so all they want is that the sector investment itself is buyable and that Nigeria has signed a proper power project agreement that protects the private investor and also protects government. In order for the private sector to access this guarantee there may be specific things within the private sector project that they may want them to do.

But what they are really trying to do is helping us to mitigate risk, private sector investing in the power sector there is risk, this is meant to make them more comfortable, since we are developing into a private market for power in a way we never did, makes them comfortable to participate in this because this money is there to back stop and provide a guarantee in cause their investment don’t quite work out in a way that they thought.

How will Nigeria hedge against the uncertainty discussed at these meetings?

We need to step up the buffers that we have, we need to improve our revenue base because that’s also a way of stepping up the buffers and we are targeting non-oil revenue, so we starting may be two weeks from now efforts of the Federal Inland Revenue Service FIRS, to plug the leakages and step up our tax collection.

According to Markenzy 65 per cent of companies in Nigeria which paid taxes two years ago have not filed recent returns. We want to know why. If we find them out, we will make them pay and that will be another source of revenue.75 per cent of companies that have registered with the Corporate Affairs Commission CAC, have not filed in their taxes returns, we want to know if these companies are real. Also companies that have been benefiting from some tax relief and incentives which have expired, we are going to audit them all.

SOURCE: Vanguard, October 29, 2013

Okonjo-Iweala: Criticism of the Economy Must be Based on Facts

Shortly after the 2013 IMF/World Bank annual meetings in Washington DC, the THISDAY team comprising Tokunbo Adedoja, Kunle Aderinokun and Ndubuisi Francis, engaged the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, on a number of issues in the economy. While admitting the challenges confronting the economy, she highlighted the progress that has been made. Excerpts:

We are all aware of the opposition by some state governors to the establishment of the sovereign wealth fund. It is now a year since the fund, which is being managed by the Nigeria Sovereign Investment Authority (NSIA), was set up with a seed capital of $1 billion . How much has been added to the initial $1 billion capital?

On the $1 billion and we now need to discuss after setting up the NSIA council and the board. I think the next step is to convince the governors that they should start saving more in the NSIA. But you know that if you talk of savings now, you will almost be drowned because they are shouting that they don’t have enough money. So, this is a dialogue that we have to continue because we don’t want to stop at a fund of $1 billion given Nigeria’s size. Look at Angola; they have got $5 billion and so with other countries. You really need to have a strong buffer that is why we need to increase the size of the SWF. I know that in this country ultimately, that will happen on a voluntary basis. Any state that doesn’t want to save in the SWF should not be made to and those who want to save in it should go ahead and if the federal government wants to save any of its resources, it should be possible to do that. But for now we are trying to invest the $1 billion responsibly so as to demonstrate to the states that the fund can make good returns for them. Following all that, I think in the months and years ahead, we look to increase the size of the SWF.
How far has the federal government gone with the payment of entitlements to PHCN workers following the privatisation of the gencos and discos?

Well, I think you need to check with the Ministry of Power because we have assigned them to do all the necessary ground work and I believe they are making good progress to pay them. As you know, at the beginning, N45 billion in the budget was set aside for paying some of the workers and we are doing it gradually and much of the proceeds from the sales are going to go towards settling the entitlements of PHCN workers. So very little of it will actually be going to the budget. Of the slightly more than the $2 billion that was received, all it eventually will go towards the settlement of the entitlements of PHCN workers. The expectation is that everybody will be taken care of and from what I know is that they are making progress on that.

Now what is the situation with some of the revenue generating agencies that were not remitting their revenues to the federal government? You threatened to close down the accounts of some of these agencies and thereafter you briefed the media that N38 billion had been paid?

We are still at N38 billion. As you know, to get that N38 billion, we took action and some of them when we made the announcement, sent money, but some did not and we actually went in and executed what we said- that is, we went to where they were keeping the IGR and we took. We have not given up and we are still working.

Did you close the accounts?

No, we told the managing directors of the banks to remit the money in the accounts to the treasury and they did. They remitted it into our account with the Central Bank. In some cases, we took virtually everything there while in other cases, we left a reasonable amount. It was a case by case situation.

So, how much were you expecting from the agencies?

We expected N58 billion and we have gotten N38 billion

How do you feel when people criticise you especially on your position on the state of the economy?

I don’t get overly excited. I just want people to have facts. You will find that most of the accusations and statements made are not based on facts. In Nigeria, we need to start learning to use facts; we must not make statements out of emotions. Let us look at the facts. When you say the economy is collapsing, what do you mean? What are the criteria or indices as Mr. President said? There are some internationally accepted measures to rate an economy as strong, it is not that Okonjo-Iweala wakes up and says an economy is strong. Such accusations must be based on certain things and that is the problem we have at home. People make completely unfounded statements.

So, we must always try to correct that all the time. Because we know what we are talking, we are not alarmed or concerned, but we just make sure we put the facts straight. You know there are internationally reputable agencies that are accessing every country based on those criteria. If an international agency comes and say everything is bad in Nigeria, people will jump and acclaim it. It will be headline everywhere because it had condemned Nigeria. But if it now says Nigeria is doing well, you will not see it in headlines. Every media, politician and ordinary Nigerians know what is right, but the political elites, many of them are bent on just giving out the wrong information.

I am not running the IMF, the World Bank, the Fitch, Standard and Poor’s and others. These are independent agencies that rate all the countries according to standard economic criteria and Nigeria is part of the globe. When the people now say that based on certain criteria, things are going well, what is wrong with that? They are not saying that the economy is perfect; they are even acknowledging the problems. In Nigeria, you have to be calm, you have to have a sense of humor, wear your responsibilities carefully, but you have to always tell the truth. Nobody has ever stopped from telling the truth.

Will the Mortgage Refinance Company (MRC) the federal government is promoting, replace the Federal Mortgage Bank? And if not, what is going to happen to the Federal Mortgage Bank with the coming of MRC?

No, the MRC will not replace the Federal Mortgage Bank. It is there to provide additional liquidity by refinancing mortgages within the country. That means by doing that, if people know that they can package and sell the mortgages they have already made, it will put more money into the system to do more mortgages and that is how mortgage systems work. The Federal Mortgage Bank will still be part of this. We are going to work with the chief executive officer to restructure the Federal Mortgage Bank to find out what to do with its non-performing loans, restructure it so that it can also help us with social and mass housing. The MRC will serve the lower and middle income earners, who are earning a reasonable income, but at the bottom end of the ladder, we need to think of another way and what we are thinking of doing in tandem, in spite of the programme is that about $15 or $20 million out of the $300 million facility will be used towards helping to restructure and reposition the company and then work with companies that produce mass housing. So what we are discussing with the IFC is that when we are doing this, we are not just going to be doing mortgages for those that are relatively well off. We are also going to be doing mass housing and the IFC is going to work with us. They have already started in Ogun state. We have already gotten 14 pilot states that will participate and they will also start working with them, to bring companies that are working elsewhere, to look at the whole value chain of housing and then we will look at models like rent to own, lease to own, so that they can be paying and after 20 or 30 years they can own their home.

What is Nigeria taking home from this year’s IMF/World Bank annual meetings?

We have come to these annual meetings with the objective of finding out what is happening economically with the economies all over the globe and the precautions or actions we need to take as Nigeria and what is the advice that the Bretton Woods institutions are giving us. And there were some key messages that came out of these meetings. The first is that the IMF and the World Bank feel that the global environment is still quite uncertain even though growth is recovering in the euro zone and the United States. But the emerging market countries have also seen slowed growth. Several of them like India had seen growth slipped to five per cent, Brazil, South Africa have all seen slower growth. But the low income countries are growing robustly. In Africa, as you know, they are predicting more than five per cent growth for the continent. So, I think the key issues that we analysed were what could be the vulnerabilities? What are the interconnections and spillover effects from all these uncertainties? More importantly, what do countries need to do to protect themselves and the advice for countries such as Nigeria is to build their buffer strongly which means you should build up your reserves, set aside some savings because you don’t know what else is going to happen and manage your expenditure better. That is, be ready to protect yourself in case the world should slip back into a recession or other adverse consequences could occur because of the uncertainties. So for Nigeria, in terms of our macroeconomic management, those are the type of things we have to take into account.

Now for Nigeria, in addition to hearing this advice, we also heard some very good news. That good news came on two fronts. The World Bank Group has made known that they want Nigeria to be one of the focused countries in Sub-Saharan Africa because of our efforts on infrastructure, particularly power, which means they are willing to work with Nigeria to invest hundreds of millions of dollars. They have a lending programme of about $1 billion a year, but they are willing to use that to pull in more resources from the US Power Africa Initiative from the private sector using the offices of the IFC, to help us address our infrastructure problems. The World Bank is planning to set up a global infrastructure facility being put together and they also said that when this is done, Nigeria will be one of the first countries that will like to be a beneficiary of this, given our large size and infrastructure needs. They want to concentrate on power and they are already actively working with several power companies that want to invest in Nigeria.

They are also promising to give us another $700 million in guarantees for the power sector as well as a willingness to invest $700 million to support transmission. So, this is very good news. We also discussed with them our social safety net issues-that is, we discussed with them how to improve our employment creation, how to help those at the bottom end of the ladder who may not even benefit from jobs and they are planning a social safety net programme of about $400 million which they are going to prepare with us. It is actually called social safety net programme to support some ongoing works that we are doing like ‘saving one million lives’ programme which helps in maternal mortality, infant mortality; there is the conditional cash transfers to help improve maternal and infant mortality ratios, train health workers, train midwives to deliver this services and improve nutrition. They also want to integrate our approach in improving nutrition in children, immunisation, HIV/AIDS and malaria. So, all these things to try and help with the health related issues and also provide a source of income at the bottom end of the ladder. So, they have put aside some money for that. They have already launched the YES-O programme and I think this will be additional. We also got pledges to help with our statistics to help us improve our statistics. We go a lot of commendation for the gender budgeting programme that Mr. President launched in 2013 budget. We had another high level meeting and looking at women empowerment, Nigeria got a lot of praises in the efforts President Goodluck Jonathan made in getting more women into his cabinet. But most importantly, we were commended for the efforts we are making in gender budgeting.

As you know, we have five pilot ministries that the Ministry of Women Affairs and our ministry are working with, which we announced in last year’s budget in getting women empowered and we set aside N3 billion as incentives for that. So the programme has gotten a lot of notice. The Ministry of Agriculture, Ministry of Communications Technology, Water Resources, Works and Ministry of Health are all participating in the programme and each of them has pledged to focus attention on women. Like works ministry has pledged to train women contractors and sub-contractors and also try to make sure that some contracts are awarded to women. Health, agriculture and communications technology have all come together to say they want to reach about 500 women with mobile telephones to have e-wallet system for their agriculture inputs such as fertilisers and seeds. They can also receive extension messages on those phones, telling them how to plant their crops. They can also receive advice through those phones and that will be a very important addition. So these were some of those things we did in that gender programme and we presented it here and it was widely acclaimed. Actually, to the point where they said they were going to get the committee of finance ministers in other countries to try this approach of integrating gender into their budget. We also had meeting with the USAID and they are also keen to work with us on the power sector co-financing with the World Bank and they are keen to work with us on social safety net and they are willing to put some existing monies to re-arrange that into additional programmes for us in those areas. Really, what we saw here was a whole lot of excitement and support for what Nigeria is trying to achieve.

The other bit of good news that we have is that whilst we were here, the ratings agencies met with us to finalise their ratings and the first one has reported, Standard and Poor’s, reaffirming Nigeria’s strong economic position whilst admitting that the country faces challenges which we all know. They have talked about the issue of shortfall in oil and oil theft; they talked about employment issues and inequality issues. All those things are on the table. But in spite of all that, they recognised the attractiveness of Nigeria as an investment destination and the strong macroeconomic management underpinning the country’s economy and the strong growth prospects.

Is Nigeria keying the $700 million for infrastructure expected from the World Bank into the SWF?

Absolutely, the NSIA has been talking with the IFC and the NSIA is looking at several infrastructure projects and I think they have announced that their board has approved their participation in the second Niger Bridge. They are looking at several other projects such as dams, irrigation and water projects in the north to infrastructure projects in the south. So that is going on and they are talking to IFC, which might co-invest with them. Other SWFs are also looking at co-investing with them, they are even trying to pull in our own pension funds and that is going on while at the same time there are efforts to increase infrastructure financing from other organisations. We are working in parallel, but also talking to each other. So, that is an additional effort by the World Bank to help us finance transmission. You know we had to raise $1.9 billion. There is an emergency assistance programme that the Ministry of Power had said is necessary to get our transmission going over the next two to three years and we have raised $1.5 billion of that to support transmission. Part of that is the $700 million that I told you from the World Bank for transmission and in addition, they also $700 million in guarantees for the power sector that they are willing to give us. They already did $600 million in Partial Risk Guarantee (PRG) for gas and we are now asking them to support the power sector because we now have independent providers generating power, so we are signing many power project agreements and many of them needed to be backed by PRG.

What are the conditions for these guarantees or facilities? And what are you doing to address the vulnerabilities that you mentioned?

On the guarantees, there are no special conditionalities because it is going to support the private sector. So, all they want to make sure is that the private sector investments are viable and that we signed proper power purchase agreements to protect the private investments and also protect government. Of course, in order for the private sector to access these guarantees, there may be specific things within the private sector projects that they may want them to do. What they are really trying to do is to help us to mitigate risks. It is meant to make them feel comfortable since we are developing a private market in a way we never did.

For the vulnerabilities, we need to step up the buffers that we have. We need to improve our revenue stance and we are targeting non-oil revenue. So, we are mounting an effort of the FIRS to plug the leakages and step up our tax collection efforts. A study that was done for us by McKinsey showed that 65 per cent of our companies that paid taxes two years ago have not filed recent reports. We want to know why, and if we find out why and make them pay, that will be another source of revenue. 75 per cent of companies that are registered have not filed their taxes and we want to know whether these are real companies registered with the Corporate Affairs Commission and if they are real, why have they not paid, so all these things are going to be launched. There are also companies that have been benefiting from tax relief and tax holidays that have expired and so we are going to audit all of them.

The IMF Managing Director said a poverty reduction fund is now on the table. Is Nigeria going to take advantage of this special fund?

You know, Nigeria is not really asking the IMF for access to any resources. You know, we are now a middle income country and we have actually allowed the sale of gold by the IMF. We are supporting other poorer countries to get access. Nigeria is not taking any financial facility from the fund. We are not under and fund programme. We are running our own economic reform programme which is strong. The fund has validated it.

There was a report that the money for the SURE-P programme for the youth was diverted to constituency project, what is your take on that?

The other day someone asked the question and I explained that under the SURE-P, out of N27 billion, N18 billion was moved to other expenditure. I don’t want to talk about constituency projects. Yes, it is true that of the N27 billion set aside for the programme, N18 billion was moved. So we are now battling with how to continue to pay the youths, who were employed under this programme. So that is an issue and we had pleaded with the National Assembly to help us restore this. We have worked with them on the amendment and they have done something and we have decided to just continue to implement it.

So, please 2013 budget is being implemented. What is being perpetrated by some section of the press is that the 2013 budget has fallen apart is false. The budget is being implemented, it still has some issues, but we decided to go ahead. We will try and find a solution to take care of the missing monies so that we can continue to pay those people under that particular part of the SURE-P programme.

SOURCE: ThisDay

Multiple Taxation Killing Economy – Okonjo-Iweala

BY ONYEKA-AJUMOBI ONOCHIE, Abuja

The Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, yesterday, concurred that multiple taxation and levies by various tiers of government have the potential of spelling doom for the economy, contrary to government’s ceaseless campaigns for internally generated revenues.

She agreed that this is particularly harmful as it increases the cost of doing business in Nigeria and discourages local trade and investment and as well as giving negative perception of the Nigerian business environment to foreign investors.

She said, “According to the Manufacturers Association of Nigeria (MAN) report, some states have as many as 97 different taxes, levies and charges that are imposed on businesses. This is simply not economically viable, even as the costs to the government of administering these various taxes and the costs to business of paying these taxes outweigh their benefits to both the private businesses and the government.

“A recent World Bank report also shows that for every N100 that businesses have to pay in taxes, they pay about N35 in compliance costs. This is a waste of capital that could be reinvested in these businesses to grow them and create more jobs for our economy,” she lamented.

The minister, who stated this at the inaugural meeting of the ministerial implementation committee of the National Economic Council (NEC) resolutions on the harmonization of taxes and levies across the Federation, in Abuja, noted that, by streamlining and harmonizing taxes across the federation, the country would have been in a position to increase its productive potentials.

Also speaking on the multiplicity of taxes on the transportation of goods, she said this, particularly, impairs the integration of internal markets and the establishment of a fully integrated economic space within the country, adding that, by impairing the integration of the national market, the mobile levies also reduce competition between companies located in different states of the country.

“With increased competition, we could bring down prices for consumer goods produced by these companies and make our local companies and exports more competitive in the global market,” she stressed.

It would be recalled that the National Economic Council (NEC) had, in March, this year, constituted an adhoc committee to review the presentation made by the Manufacturers Association of Nigeria (MAN) to it on multiple taxation and other challenges facing businesses in Nigeria.

The key requests and recommendations then made by MAN include review and amend the various taxes and levies on its members, stoppage of the use of unorthodox means to collect taxes and levies, immediate automation of tax operations by relevant tax authorities to eliminate leakages and ensure ease of collection, and publishing of the approved list of taxes and levies within the states and local governments to educate the public and facilitate compliance.

The minister continued, “But despite several attempts by the government to tackle this issue, it has remained unabated – affecting both big and small businesses and the movement of goods and services in the country.”

In addition to creating hiccups in local business transactions, the minister also underscored the danger in multiple taxation, relative to breaking international business barriers.

She said, “If Nigeria will continue attracting foreign investment, diversify our economy and create more jobs, and become one of the top 20 economies of the world by 2020, we must get our tax system right.

“Reducing the total number of taxes paid, increasing transparency as to how and what to pay, and facilitating procedures for filing taxes, will be essential to reducing high compliance costs and, in so doing, increase Nigeria’s tax compliance rate and also the revenue.

“Therefore, we have to have a transparent process that makes it easy for people to know what taxes and levies to pay and to harmonise these activities across the country, she concluded.

SOURCE: http://www.mydailynewswatchng.com/2013/10/22/multiple-taxation-killing-economy-okonjo-iweala/

THE TRUTH ABOUT GOVERNMENT’S POSITION
ON ASUU STRIKE

*OKONJO-IWEALA IS NOT THE ISSUE

Contrary to some recent media reports, the Federal government has not adopted a take-it-or-leave-it approach in its negotiations with ASUU. Rather, the approach is focused on positive engagement and achieving sustainable solutions to the challenges facing higher education in the country. That is why President Goodluck Jonathan recently appealed to ASUU to respond to government’s positive steps by calling off its strike in the interest of suffering students and parents.

Despite this, for several days now, some elements in ASUU have been distributing pamphlets and flyers with abusive and inflammatory messages against the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala in mosques and other places. This is taking academic unionism to a new low and infusing it with unnecessary politics. I am sure majority of ASUU members are not in support of this.

These messages are directed at using falsehood to demonize the Minister as callous and unsympathetic to the plight of students and parents. The major lie being peddled in the pamphlets and flyers is that Dr Okonjo-Iweala has insisted on a “take-it-or-leave-it approach” in the negotiations with ASUU. Nothing could be further from the truth.

Dr Okonjo-Iweala is the daughter of two retired professors and her father is presently a member of ASUU’s Board of Trustees and has been one for a long time. She speaks with her father everyday on the issue so how can be insensitive to issues concerning the sad state of tertiary education in the country? She understands and sympathizes with the plight of both students and lecturers. She wants our children back in school as soon as possible. Remember she is a mother and two of her young relatives are sitting at home due to the strike.

This is why government is working hard, under the leadership of the President, to seek practical and sustainable solutions to the challenges facing higher education in Nigeria. The President has made available N100 billion a year in the first instance to repair hostels, laboratories and classrooms and other facilities. An offer has also been made to ASUU of N30 billion towards their earned allowances. In fact, negotiations have even gone further than this. This is the first time, in years of negotiating with government, that significant sums of money have been put on the table for ASUU and universities on this particular set of issues. The Coordinating Minister is fully part of this.

Against this background, ASUU elements who want the strike to continue should have a heart and rethink their current take-it-or-leave-it approach to negotiation. Government has demonstrated its commitment to improving the university system. And it is even ready to do much more going forward. ASUU should listen to the voice of reason and the yearnings of Nigerians on this issue.


Paul C Nwabuikwu
Special Adviser to the Coordinating Minister and Minister of Finance

N:B: The pamphlet being distributed in some mosques in the northern part of the country is https://www.facebook.com/photo.php?fbid=637820829601518&set=a.301762839873987.88834.204329982950607&type=1&theater

Fitch affirms Nigeria’s ‘BB’ rating

BY Emma Ujah, Abuja Bureau Chief

Fitch Ratings has, once again, affirmed Nigeria’s BB-rating and a stable outlook for the economy.

The rating, which was announced by the global rating agency in London Wednsday, came a few days after another respected international rating agency, Standard & Poor’s also affirmed a strong and positive rating for Nigeria’s economy with a BB-.

The agency retained Nigeria’s long-term foreign and local currency, International Depository Receipts, IDRs, and senior unsecured bond ratings at ‘BB-’ and ‘BB’, respectively.

According to Fitch, Nigeria economic outlook is stable, with very strong macro-economic index, as the Gross Domestic Product, GDP, growth rate has remained in the region of 6 and 7 percent, and single digit inflation rate.

The stable outlook reflects the fact that in Fitch’s view, upside and downside risks are well balanced.

Ratings’ factors
The ratings agency explained that its affirmation reflected its opinion on the true position of the Nigerian economy.

It said: “The affirmation reflects the following key rating drivers: GDP growth slowed to 6.4 percent in H113, but has shown resilience in the face of exogenous shocks such as severe floods in 2012 which hit agricultural output; security problems especially in the north earlier this year; and increased oil theft and vandalism and the consequent repair shutdowns which have caused oil output to contract for the second year in a row.

“The non-oil economy has slowed but still grew by 7.9% in 2012 and 7.6% in H113. Non-oil growth should pick-up in H213 as normal weather has resumed and the authorities have responded to security problems. Reforms to the electricity and agriculture sectors could start to boost potential growth.

“Inflation has been in single digits all year – the lowest in five years and the longest stretch of single digit inflation since 2008. Policy rates are unchanged. The central bank (CBN) has the twin aims of achieving single-digit inflation and maintaining exchange rate stability.

“Public finances remain comfortable. Fitch estimates a general government deficit of around 1.8% of GDP this year and next. Both oil and non-oil revenues are under-budget and the Excess Crude Account (ECA) has been tapped to compensate.

“Capital spending also remains under budget. The draft 2014 budget plans ambitious fiscal consolidation, with lower oil production and benchmark oil prices and lower spending than the 2013 budget.”

The agency said it expected that “oil production will likely fall short again, and the final budget that emerges from the National Assembly (NA) is likely to be more expansionary but it expected general government debt to remain stable at just over 20% of GDP, this year.

It added, “Nigeria’s sovereign and overall external balance sheets, current account surplus, debt service ratio and external liquidity are all stronger than ‘BB’ category medians. Foreign reserves rose steadily in early 2013 but have been falling since May due to reduced oil output, prompting ECA drawdown, and global market turbulence, which has reduced foreign appetite for NGN paper (though net inflows have continued).

“CBN intervened to support the naira when it came under pressure mid-year after Fed-tapering turbulence, although reserves have held up much better than many large emerging markets. Nigeria effectively re-opened the Eurobond market in July, raising USD1bn in its second issuance”.

Mixed reform programmes
Fitch viewed the nation’s reformed programmes as having mixed results, “electricity privatisation has passed a key milestone with generators and distributors now in private hands.

“Output seems to be on a rising trend, although it has been affected by gas pipeline damage and an impact on GDP growth is hard to discern.

“Agricultural reforms are also gaining traction. The most obvious benefit to the economy has been a fall in imports last year, due to reduced oil subsidy payments, a crackdown on fraud in the oil subsidy system and substitution in the agricultural sector”.

The agency noted the failure of the National Assembly to pass the Petroleum Industry Bill, PIB, owing to it described as “strong vested interests” which would make reform in that sector “a continual struggle, especially with elections in 2015”.

It also said that the Nigeria’s ratings remained “constrained by weak governance, low per capita income and vulnerability to oil price volatility” and that “data weaknesses hamper the monitoring of economic and fiscal performance and reform progress”.

It acknowledged the security challenges posed by insurgents and said that “the government is responding to the Boko Haram insurgency mainly with security measures”.

Reacting to the rating by Fitch, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala said it demonstrated the resilience of the nation’s economy which was a reflection of the resilient Nigerians.

Her words, “this confirms that Nigeria’s economy is resilient just like the Nigerian people are resilient. What’s important about the ratings is that while acknowledging all the challenges the economy faces, it points to and applauds the strengths such as progress in the power sector, increased focus on agriculture, strong investment in local manufacturing and other areas”

CREDIT: http://www.vanguardngr.com/2013/10/fitch-affirms-nigerias-bb-rating/#sthash.YcBNJu0r.dpuf

Nigeria is being rated by three major rating agencies, Standard & Poor, Fitch and Moody. But out of these three, Standard & Poor has released its result showing that the nation’s economy is BB minus, with stable outlook.

Although, Moody was not invited, it deemed it fit to start rating Nigeria because of its very important position in the global economy.

The BB minus, was the same rating given to the country last year, so it shows that very positive things are going on in the nation’s economy.

They have also acknowledged the challenges that we have. However, they said that in spite of those challenges, Nigeria’s economy is robust, macro-economic indicators are strong, the ongoing monetary policy is constant and fiscal standing is strong enough for us to maintain very good rating that we had before.

It is now once more confirmed externally that Nigeria’s economy, in spite of various ongoing challenges, is in the right direction, courtesy of government’s fiscal policies and CBN’s stable monetary policies.

While we are not shying away from the fact that there are challenges in the economy, we are addressing that problems and the rating agency did affirm this in its report.

On The Fiscal Side
Tthe rating agency looked at the potential strong Gross Domestic Product (GDP) of the nation between 2013 and 2016, primarily due to non-oil growth, which to them was very encouraging. They are looking at some of developments in the non-oil sector that are already showing some positive signs, such as the ongoing power sector reform, the fact that our growth is not really coming from the oil sector but from non-oil, agriculture development, retails and telecommunications.

They are assessing our external debt stock burden, which in their opinion is relatively low. They also noted the fact that the nation’s foreign exchange reserves remains strong, courtesy of its effective management by the CBN. They are also viewing positively the fact that Asset Management Corporation of Nigeria (AMCON) would be redeeming some of its debt, about N1.7 trillion in cash, and taking that off its books.

Challenges Identified
On the challenges which must be addressed by the Federal Government to sustain and improve the macro economic indices, the rating agency commented on the need for us to maintain strong fiscal side by not running down our excess crude account too rapidly and the fact that we must provide employment to reduce unemployment among youths, invest more in infrastructure and make sure that the benefits of growth go down to the bottom to reach the masses, as well as fighting the crude oil theft.

We are living in a difficult global economic environment and whenever we are assessing ourselves economically, we should place everything in context and look at things in relative terms. We should look at the number of countries such as the United State of America, whose rating has been downgraded as a result of global economic challenges, meaning that, even if we have a downgraded rating, we should know that some of these things are due to external factors that are beyond the control of monetary policy makers.

Therefore, for us to have been able to maintain a good rating at this point in time, it is not a small job. And if you look at the concluding remarks of the rating agency, they did indicate that we actually raised the rating if the present policies are maintained and institutions strengthened. So it is a positive outlook for the future of the country rather than a negative one.

Implications of the Rating to Nigerians
What the positive means is that more money will come into the country for investment and employment generation.

In every country, both ordinary people and investors need to have a way of knowing whether the economy is being managed in the right way or whether it will provide a kind of environment that private investors can invest in. You know, it is the private investors that will create jobs. We have said that in every country, it is not really the government that will create jobs, it is the private sector. If the private sector has no objective means of knowing whether the economy is going in the right direction or not, they will not know whether to invest in a country or not.

So for the ordinary Nigerian, this means that we are sending strong signal to both domestic private investors as well as the foreign ones that this economy is being run in the right direction. Also because they rate virtually the countries of the world, just as the IMF looks at the economy of countries across the world, this is a formal signal that the economy is good.

The ordinary Nigerian needs to know that the private sector investors will come in to create jobs when they see that we have better rating, after all, what they are looking for are job opportunities. So you will see that many companies will say ok, Nigeria is a reasonable place which I can go and invest and create jobs.

Importance of Rating
The rating is important to investors all over the world, because we are living in a world where capital is very scarce. We have people living in Washington who don’t have all the information on other countries. Not everybody has information on Nigeria, Ghana or Vietnam, the way they have on United States and United Kingdom.

These rating agencies get to these countries; they look at their policies and analysis data. Even if you stay in London, they give idea of where it is safe to put your money. That is why credit rating is extremely good. So, having this rating in Africa is a blessing and it is right time to move on with this BB minus rating.

Nigeria is very conservative about borrowing. The focus of the government is to create enabling environment for the private sector to thrive and to ensure poverty reduction. That is why our emphasis is on trying to use the limited resources in borrowing for productive purpose. Our emphasis is to provide a platform for the private sector to do the borrowing and employment generation. That is what we have laid emphasis on in recent time.

We have gone ahead to use the debt management platform to encourage the private sector to start issuing debt instruments for borrowing domestically and externally, much of what we are doing, particularly on external debt, is to open the window of opportunity for the private sector to borrow, in addition to foreign direct investment. So they must take advantage of the current debt benchmark to raise more money both locally and at the international market.

Savings from SURE-P
The Federal Government had been publishing savings from SURE-P on the pages of newspapers. About N18 billion per year was being saved and the same thing goes for the state governments. The exact figure being saved would be revealed soon at the appropriate time when the figures are summed up from the beginning of the year.

Last year, we did not use all the savings and it accumulated. We have certain amount left. But the programme is being managed in a totally different way. The CBN has nothing to do with SURE-P except that they are banker to the account. The committee chaired by Dr Christopher Kolade is the one saddled with the responsibility of managing that account. The director general of the budget is the secretariat for the account. When expenditures are made by the contractors and they are validated by the Planning committee, they will present the certificate and the CBN disburses the money. That is the way it works and all the money we have saved is there and is being accounted for, but money has to be appropriated by the National Assembly before they can be spent.

On a Final Note
The rating agency is not saying that the Nigerian economy is perfect. they are saying that there are many challenges but they are being fixed and the economy is being run by the right people in the right direction. So if we strengthen institutions and improve our policies we could even do better.

Nigerian Economy Remains Strong

•IMF Predicts 7.4% GDP growth in 2014

By Kunle Aderinokun in Washington DC

Notwithstanding the insecurity in the northern part of Nigeria and crude oil theft, which has negatively affected the nation's revenue base, the International Monetary Fund (IMF) has rated the nation’s economy as still strong.

The IMF’s positive rating came only a day after the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, restated that Nigeria was not broke.

The minister’s defence was amid criticisms and claims that the country was broke.
The IMF, therefore, projected a real Gross Domestic Product (GDP) growth of 7.4 per cent for Nigeria in 2014, which is higher than its 6.2 per cent projection for the economy last year.

The Bretton Woods institution disclosed this in its World Economic Outlook (WEO) launched yesterday in Washington DC as part of the pre-meetings events of the 2013 IMF/World Bank annual meetings.

The IMF explained that higher oil prices at the international market showed strong economic prospects for Nigeria despite the aforementioned challenges the country was facing.

"In Nigeria, still high oil prices underpinned strong growth, notwithstanding temporary downdrafts from security problems in the north and oil theft," it said.

Also, the IMF noted that growth in sub-Saharan Africa was robust between 2012 and 2013 and was expected to accelerate somewhat in 2014, reflecting strong domestic demand in most of the region.

It added: “Nevertheless, spillover from sluggish external demand, reversal of capital flows, and declines in commodity prices are contributing to somewhat weaker growth prospects in many countries relative to the April 2013 WEO. Policies should aim to rebuild room for policy manoeuvring where it has been eroded, and more broadly to mobilise revenue to address social and investment needs.”

In order to achieve sustainable and inclusive growth in the medium term, the IMF urged policy makers in African countries to deepen structural reforms and give priority to infrastructure investment and social spending.

“Activity in sub-Saharan Africa remained strong in the beginning of 2013, although marginally down from 2012, supported in most countries by domestic demand. Growth was particularly strong in low-income and fragile states, with the notable exceptions of Mali and Guinea-Bissau, which were affected by internal civil conflicts.

“Angola benefited from a recovery in oil production. In Ethiopia, declining coffee prices and supply bottlenecks slowed growth slightly from a very high level. However, South Africa’s growth slowed further, in large part due to tense industrial relations, anaemic private investment, and weaker consumption growth, the latter affected by slowing disposable income growth and weakening consumer confidence.

“With a few exceptions, inflation remained broadly stable in the region. Recent global financial market volatility has affected several economies in the region, although most low-income countries experienced little impact given their limited links with global financial markets. Among frontier markets, Nigeria’s currency weakened against the U.S. dollar at the peak of the volatility, although financial conditions have since stabilised,” it further explained.

http://www.thisdaylive.com/articles/imf-despite-insecurity-crude-theft-nigerian-economy-remains-strong/161113/

Standard & Poors affirms Nigeria Sovereign rating at BB-

Posted by: Bukola Afolabi, Washington DC

International credit rating agency, Standard & Poors, has affirmed Nigeria Sovereign rating at BB- with stable outlook. The affirmation is coming when the agency is downgrading other sovereigns like the United States, due to the current global economic difficulties.

The outcome of the rating assessment was disclosed by Ngozi Okonjo- Iweala, Minister of Finance and Coordinating Minister of the Economy, at a press briefing, at the ongoing IMF/World Bank Annual meetings in Washington DC.

The rating agency, while acknowledging the challenges facing Nigeria, said the economy remains robust with macroeconomic indicators remaining strong.

The finance minister attributed the favourable rating to the current fiscal stance of the Federal Government, adding that this is one more external validation of the economy.

On the Fiscal side, S$P says Nigeria’s GDP growth remains strong in 2013 through 2016, buoyed by non- oil sector growth.
According to the rating agency, Nigeria’s debt stock remains relatively low, while foreign reserves remain strong.

The agency also views the economy positively in the light of the redeemed N1.7 trillion Non-Performing Loans purchased by the Asset Management Company of Nigeria (AMCON) which will be finally written off its books.

S$P equally views non-oil Sector development especially growth in agriculture, retail, telecoms and power as positive.

Also at the briefing, the Central Bank of Nigeria (CBN) governor, Sanusi Lamido Sanusi, said the S$P’s assessment of the Nigerian economy aligns with the difficult global economic environment which has seen countries like the United States being downgraded.

The governor further stated that in today’s global economy, there is limited pool of investable capital and huge competition among countries to attract such funds, and that going by this rating, Nigeria would be favorably disposed for such investment decisions.

CREDIT: http://thenationonlineng.net/new/standard-poors-affirms-nigeria-sovereign-rating-at-bb/

The Debate Over State of Economy

By Ndubuisi Francis

For many critics of the President Goodluck Jonathan administration, the Nigerian economy is in a quandary, but recently, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala provided a glimpse to counter their claims.

On September 17, 2013, 16 governors of the Governor Chibuike Amaechi-led faction of the Nigeria Governors’ Forum (NGF) met in Abuja, deliberated on some burning national issues, and asked the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, to either improve her management of the nation’s economy according to the provisions of the Appropriation Act 2013 or resign her position. They alleged that her non-compliance with the revenue projection of the 2013 budget was a direct breach of the Appropriation Act 2013.

About 24 hours later, the minister was to provide facts and figures not just on the state of the economy but the performance of the 2013 Budget.

Briefing journalists, the minister affirmed that the budget is only an estimate of spending based on expected revenues and are dependent on two major variables, including oil production volume and price in the international market—two variables that are beyond her ministry’s control.

According to her, while the price of crude oil has not been an issue, the nation is only witnessing quantity shocks as the level of production has been below the budgeted estimates due to oil theft–a challenge, she stated, was being aggressively and frontally addressed by the Federal Government.

Strength of the Economy
While some governors and others might have a different view on the state of the economy, the minister believes that the macro-economic fundamentals are potent. She provided some salient points that cannot be wished away. For instance, how can an economy that is parlous be witnessing activities that point to the contrary?

According to her, nine state governments have filed applications to float bonds while many others are queuing up to do so.

The minister pointed out that all over the world, no one floats bonds in a wobbling or non-performing economy, adding that the applications from nine states were strong signals that the Nigerian economy is strong, in spite of some challenges.

“There’s no place where you float bonds if the economy is not working. The floating of bonds by the states is a demonstration of the confidence they have in the economy,” she enthused.

The scramble to float bonds, she maintained, was because the Federal Government had created a yield curve, which has made it attractive for both corporate and private entities to borrow, pointing out that the fact that the country is facing revenue shortfalls did not diminish the empirical statistics. on the ground.

But even while there may be quantity shocks arising from a drop in oil production occasioned by theft, the minister said the country was lucky to have built buffers through the Excess Crude Account (ECA) from which it has drawn to make up for the revenue shortfalls. Without the buffers, the nation would have been going cap in hand for external succour.

“Let me mention to you that our fundamental s are strong. Why did I say that? We have a reserve of $46 billion, Excess Crude Account is $5 billion. Inflation remains at single digit— at less than 9 per cent, which is what we have been targeting. Our exchange rate is relatively stable...” Although there is a slight decline in GDP growth, it is still better than 6 per cent.

“We had a GDP growth of 6.5 per cent in the first quarter of this year. Second quarter, we are growing at the rate of 6.18 per cent... We are still one of the fastest growing economies worldwide and in Africa as well.

“Fiscal deficit is about 1.58 per cent of GDP. We are maintaining prudent management of the economy. This is why all the validations from outside have indicated that our macro fundamentals are strong,” the minister said.

Budget Implementation
The major grouse of the Amaechi-led faction of the NGF was the 2013 Appropriation Act. For the 2013 Budget, the minister said N850 billion has so far been released to the Ministries, Departments and Agencies (MDAs) with 76 per cent utilisation achieved. To make budget implementation more purposeful, the practice of releasing capital votes without backing such fully with cash backing is giving way. While the ministry released N400 billion in the first quarter, N200 billion in the second quarter, and N250 billion in the third quarter, N210 billion of the third quarter release has been cash-backed.

The outstanding N40 billion, she said, would be cash-backed after the Federation Account Allocation Committee sharing.

Revenue Shortfall
One area where many critics have latched on to unleash their venom on the administration is on the declining revenue, but often fail to recall some of the fiscal measures taken to reduce food imports, which is said to gulp as much as $8 billion annually.

“We have witnessed some occasional revenue shortfalls, and that is what it has been. I always tell people, you have to look at the economy as a whole. We all know that from time to time, because of the shortfall in oil production and shortfall in revenue, due to the fact that we are growing more of our own food, we are not importing as much, that’s why Customs revenue is coming down. You know when these things happen, it’s good news but from time to time, we have fluctuations and we have been able to manage it,” she said.

Okonjo-Iweala reaffirmed that while efforts were being made to address the oil production shortfall occasioned by theft, the decline in revenue from imports was in deed occasioned by a deliberate policy for a drastic cut on food imports and increased local production.

Job Creation
The agricultural sector is considered one of the sectors providing mass employment, with over 2.5 million seasonal and full time created.

“When I say seasonal, for example, in rice 450,000 of the jobs created were seasonal. But overall, 2.5 million jobs have been created—seasonal and permanent, and in nine commodity chain—cassava, sorghum, oil palm, cotton, cocoa, dry season and rainy season rice. We are creating jobs for our skilled and unskilled people in this very important area of the economy. Output is also increasing. All of you are aware of the 1.1 million metric tons of rice that were produced in the north of the country during the dry season. And some of this production have been helping to moderate food prices.

“So, these are the results we are achieving. We are not saying we’re there yet. We still have a lot to do. We are aiming to create more jobs in that sector (agriculture) and other sectors. We’re well on our way to achieving results.”

In her words, the manufacturing sector has also witnessed increased activities.

Her words: “Very soon, the Indorama Company is making an investment of $1.2 billion in petrochemicals—particularly fertiliser, in Port Harcourt. Procter & Gamble of the United States of America is building a new factory and invested $250 million in Ibadan,” she said, noting that a Ugandan investor is also investing over $200 million in a plant to manufacture glass through sand, in Port Harcourt while an over $200 million cold steel rolling factory in Ilorin, Kwara State that is going to employ over 1,900 is being constructed.”

Okonjo-Iweala said Nigerians were also witnesses to the recent signing of agreements running into billions of dollars that will be invested by the Dangote Group, noting that all these would create jobs.

The Community Services Programme under the Subsidy Reinvestment and Empowerment Programme (SURE-P) has so far created 178,000 jobs, while the Graduate Internship Scheme(GIS) has placed over 2,000 graduates and continuing, just as YouWin has created 19,000 jobs.

“I think this issue of jobs is one that we are monitoring through the National Bureau of Statistics (NBS). We will be giving you updates from time to time on what is happening there.”

Power Sector Privatisation
The minister is not alone in flaunting the transparent and successful privatisation of the generation and distribution companies of the Power Holding Company of Nigeria (PHCN) as the signature tune of the Jonathan administration’s Transformation Agenda. The president himself has done so at every fora, including the recent 54th annual conference of the Nigeria Economic Society (NES).

With close to $2.52 billion realised from the privatisation of the power sector, the minister said the government would be able to take care of the needs of PHCN workers even with N45 billion already expended to take care of their emoluments.

Subsidy Regime
“In 2011, there was a huge public outcry. I want to say to you that this administration has worked hard to clean up the process of subsidy payments. As you know, there was the Aig-Imouhuede Presidential Committee on Subsidy that hired 15 auditors from PricewaterHouse, and bank examiners to meticulously go through all the claims and recommend ways for making payments.

“The result of the improvement we made when we fired the old auditors and put new ones in place was that we put in place different checks and balances. As a result, last year, we brought subsidy payment down to about N950 billion, and we expect that this year, we will pay about N971 billion. To go from N2.2 billion, to N950 billion to about N971 billion, I think it’s a huge achievement in terms of what we have tried to do on this issue of oil subsidy.

“We have cleaned up the system. We expect that tomorrow (today), we will make out another payment to oil marketers because they are due for another payment, and we will be publishing that as we normally do...We take care to ensure that all the payments we make are being done properly. That has made us to be a little bit slow in paying. But, at least, we have seen what it has yielded. It has led to a substantial reduction in the amount of subsidy that has been paid last year and we expect to pay this year.

Is the economy really in the doldrums? Are those, including the factional members of the ruling Peoples Democratic Party, otherwise known as New PDP (nPDP) fair in their position that Nigeria is on the brink of collapse. Can anyone objectively describe a country that has been meeting its domestic and international obligations, including prompt payment of workers’ salaries, as insolvent? Agreed there are pressing challenges in country, but is the drop in oil production occasioned by theft enough parameter to adjudge the country broke even when international ratings have been positive?

Infrastructure
For Okonjo-Iweala, the construction of dual carriageways such as the Kano-Maiduguri, Enugu-Port Harcourt, Benin-Ore, and Abuja-Lokoja roads, among others, are pointers to the strides being made in the area of infrastructural development. In addition to these roads, she said, at least, one road had been completed in a each of the geo-political zones while many more are on the verge of being completed, including the Oyo-Ibadan road, as well as sections of the Onitsha-Owerri road.

She said 2014 would experience a leaner budget as it would be carefully drawn, taking into cognisance the discovery of oil in several countries of the world in order not to subject the economy to unnecessary stress.

She said in the next three months, the issue of shortfall in oil production would be a thing of the past.

On revenue and budget, the minister stated that the federal Budget was being implemented, adding: “We have witnessed some occasional revenue shortfalls, and that is what it has been. I always tell people, you have to look at the economy as a whole. We all know that from time to time, because of the shortfall in oil production and shortfall in revenue, due to the fact that we are growing more of our own food, we are not importing as much, that’s why Customs revenue is coming down. You know when these things happen, it’s good news but from time to time, we have fluctuations and we have been able to manage it.”

http://www.thisdaylive.com/articles/the-debate-over-state-of-the-economy/160717/

FEDERAL MINISTRY OF FINANCE

September 10, 2013

SAHARAREPORTERS LIES AGAIN

Earlier today (September 10, 2013), Saharareporters published a scurrilous and totally false story titled “Nigeria's Finance Minister Okonjo-Iweala Forced THISDAY Publisher to Sack Editor” on its website.

The report claimed that the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala called the Publisher of THISDAY Newspapers, Mr Nduka Obaigbena last Saturday to demand the sack of the Saturday Editor of the paper, Mr Laurence Ani over a story she was allegedly unhappy about.

It further alleged that as a result of the action, the editor was asked to go on compulsory leave.

The story is a total fabrication. The alleged conversation did not take place. In fact the minister was on a flight on her way back from the United States on the day in question. In other words, the details of the story do not exist outside the warped imagination of Saharareporters.

The Publisher of THISDAY has indicated his willingness to confirm that she did not at any time reach out to him on any such issue or make any such demands as alleged.

This story is the latest salvo in a campaign of falsehood which Saharareporters has waged against the Coordinating Minister on behalf of its pay masters.

We are certain that the campaign will fail because it is founded on falsehood and Nigerians can see through the antics of this disreputable medium.


Paul C Nwabuikwu
Special Adviser to the Coordinating Minister for the Economy and Minister of Finance

Recently, Nigeria’s Finance Minister Ngozi Okonjo-Iweala gave a speech at the International Institute for Strategic Studies outlining the steps that need to be taken to improve economic development in Africa by creating jobs and reducing unemployment. Here are the five steps Okonjo-Iweala outlined for creating economic growth in Africa and developing jobs for young people across the continent.

1. Develop critical infrastructure. The lack of modern infrastructure in Africa costs the continent “at least 2% in GDP growth annually.” Among the systems that Africa needs to develop are an expansive electrical grid, roads, railways, and communications. These systems allow for more efficient production and transportation of goods, allowing for an increased economic output. Additionally, the continent needs to work on establishing clean water and sanitation systems, which will result in improved public health.

2. Develop human capital. Africa must invest in the skills of its people in order to advance their standard of living. Currently, “33 million primary school-aged children in Sub Saharan Africa do not go to school,” and “40% of Africans over the age of 15 and 50% of women above the age of 25 are illiterate.” Africans need improved access to education in order to work in skilled trades and earn higher wages.

3. Build safety nets. Throughout Africa, there are few systems that are established to help citizens who are living in poverty or have been negatively impacted by natural disasters. Okonio-Iweala states that Africa must work to establish tax systems to collect revenue for providing assistance to those in need throughout the continent.

4. Address a growing population. In 2010, Africa was home to more than 1 billion people. The population of Africa is expected to double to 2 billion people by the year 2050. In order to help alleviate poverty in the continent, a focus should be placed on family planning. By reducing the number of births per woman in Africa, the overall GDP per capita will increase, resulting in a higher standard of living for Africans.

5. Embrace Africa’s youthful population. Africa’s youth represents the future of the continent. By establishing programs that focus on the intellectual development and health improvement of young Africans, the continent will make an investment in its future. Africa has true potential for future economic growth if the continent’s nations invest in its young population, providing them with the tools they need to be successful in a global economy.

- Jordan Kline

SOURCE: http://borgenproject.org/5-steps-to-increased-economic-development-in-africa/

ECONOMY: THE LIES OF SAHARAREPORTERS

We have received several enquiries about a story titled “Nigerian Government broke; targets pension savings” posted on the website of Saharareporters.

The story, like many other recent articles by Saharareporters purporting to be exclusive stories on various aspects of the Nigerian economy, is a complete fabrication.

As Nigerians know, the administration of President Goodluck Jonathan recently presented its mid-term report which is a forthright account of the achievements as well as challenges facing the economy.

The country has $48 billion in reserves, including N5 billion in the Excess Crude Account to help shore up the economy. So the idea that the country is broke is alarmist.

It is true that the country is experiencing some revenue shortfalls that everyone knows about due to oil theft for which the President is taking some serious measures.

Also, contrary to the claim in the story that the country has borrowed from local and international banks to finance recurrent spending, the Jonathan administration has in fact reversed the tendency of borrowing to finance recurrent as was the practice in the past.

Also untrue is the claim that the country has been downgraded by international ratings agencies. In fact the truth is the exact opposite; ratings agencies and international investors have consistently stated, through various platforms, that the Nigerian economy is a well-managed one with good prospects in the medium and long term.

Regarding the country’s debt situation, the overall picture is positive as the Coordinating Minister showed clearly in her recent well publicized statement. The multi-dimensional strategy adopted by the Jonathan administration is leading to positive outcomes.

The level of borrowing has been brought down, bonds are being paid off through a sinking fund and the country is not taking the kind of high interest loans that led to the debt burden which existed before the historic Paris Club debt deal. The Borrowing Plan which was approved by State Governors and the National Assembly is focused on financing power transmission projects, inter and intra city rail projects, dams and other key infrastructure.

The notion that the Jonathan government is “eyeing” the N3.4 trillion pension funds to finance deficits underscores the desperation of this “activist” medium and its sponsors. It is a total invention. In fact, the government is currently engaged in strengthening institutions and critical processes in the sector to enhance security and stability of the funds.

With this latest outing, Saharareporters has reinforced its well-earned reputation as a discredited purveyor of falsehood.

Paul C Nwabuikwu,
Special Adviser to the Coordinating Minister

A TRANSCRIPT OF THE SPEECH OF DR. MRS. NGOZI OKONJO-IWEALA, HONOURABLE MINISTER OF FINANCE AND COORDINATING MINISTER OF THE ECONOMY, NIGERIA, AT THE MINISTERIAL PLATFORM HELD AT RADIO HOUSE, ABUJA ON MONDAY, JUNE 11, 2013

Thank you very much to the Honourable Minister of Information for that very rousing welcome and for hosting us for this event.

For my colleague, the Honourable Minister of Sports, I don’t think it’s coincidental that Sports and Finance are together today, because I’d always joked that if I was not the Minister of Finance, I’d love to be the Minister of Sports. So, I totally envy him in his job, especially now that we’re winning.

And to my colleagues, the Honourable Minister of State (Finance), the Perm Sec., and all the members of the audience here; I want to say that we’re going to handle our presentation in such a way that I will start up, pass to my minister of state and then he will pass back to me to round off. And I can’t start this without first acknowledging the support of the President to the Ministry of Finance. It’s not an easy ministry to run, as you all know. Nobody likes Finance because everybody likes to say they never have enough. So, we are grateful for the support. We are also very proud of our staff in the Ministry of Finance – the budget office, the Accountant-General’s office; and I want to thank them openly because, without their dedication and good work, we would not be able to accomplish what we have today. So, what I’m going to tell you, some of it you may have heard when Mr President presented his mid-term report and score card, but it bears repeating. And some will be additional expatiation on that; or new information.

I want to begin with what it is that the Ministry of Finance does. I want to remind people of our mission. Our mission is to manage the nation’s finances in an open, transparent, accountable and efficient manner that delivers on the country’s development priorities. There are four basic things we do in managing these finances and helping to manage the economy. The first is macroeconomic management. It’s the job of the Ministry of Finance, working with the Central Bank, to have a stable macro-economy. If there’s no stability, if things are moving, exchange rate is volatile, inflation is high – we have experienced it in this country before – what happens? You cannot even begin to think of development of the economy. So, that’s one of our jobs.

The other, of course, is managing the finances and mobilising finances for the real sector of the economy; meaning the other sectors that create jobs can grow. Then we also have the job of supporting enabling reforms that make this economy move. And finally, we have the job of supporting job creation indirectly and directly. So, we’re going to talk about what the Ministry of Finance does and has achieved in those four areas.

Let me start with something that we said during the mid-term report. The first is, on the macro-economy, I want to report that the economy is strong and stable. But of course, it faces challenge of inequality and inclusion; meaning that even though the economy is strong, we have problems with jobs and unemployment. We have problems with working to eradicate poverty. We need to move faster. We need to grow faster in order to tackle these problems. So, we are not saying that everything is solved, or that everything is great, but it’s strong; and that stability provides the platform on which we can use to solve the other problems.

What do I mean? We talked before that if you notice – everybody follows the exchange rate between the dollar and the naira – it has been relatively stable in these past two years at 155 to 160. At least, that is something you can evidence for yourself and attest to. It has been stable because we have also been able to accumulate reserves. People wonder why we are saving these reserves that are now almost $50 billion – we’re at $48 billion now. It’s very important because the reserves are what make the exchange rate stable. When the reserves are going down, that’s when you experience that instability and people can come and attack your currency. So, we have managed, working with the Central Bank – I also want to give them credit for good monetary policy - to be able to grow these reserves, stabilise, so that now, we have an exchange rate that can allow people to plan and allow people to do their work. As the Honourable Minister of Information said, inflation is coming down; from about 12.4% in May 2011, it has slowed to about 9.1% now and these all form the bedrock of this stability.

We have made savings. Part of our reserves is also the Excess Crude Account savings that we talk about. We have had about $4 billion in May 2011. We grew it to about 9 billion dollars equivalent at the end of 2012, and now we’re about $6 billion. Why are we down? Because the Excess Crude Account helps us to manage the economy and keep growing even when we experience shocks like when oil production comes down because of either oil theft, or leakages from pipelines and so on. You know, the money we have saved enables this country to keep going and we have enough to keep us going even in the face of shocks for another four to five months whilst we try to solve our problems. This is something that Nigeria did not have before and we are very proud of it. In the past, when we experience shocks, what did we do? We would have to go to the IMF or World Bank to go and look for money – the IMF in particular to shore up the economy, to shore up our balance of payments (that’s what economists call it). But now, even through all the ups and downs that we have experienced, have we gone there? No. Because Nigeria has now put itself - with the existence of this Excess Crude Account - in a position where in the event of any shock, we can go there to stabilise ourselves. That’s why Nigerians must support this account, the saving of this money; the Sovereign Wealth Fund. This country like a family must be able to put money aside so that if you experience shock, you don’t go around begging, you can stabilise yourself with your own savings. That’s what we manage to do.

The second thing I want to talk about is about GDP growth. This stability has enabled the economy to grow. Certain sectors are growing – I will come to that. Overall, this economy is growing and growth is projected at 6.75% by us; by the National Bureau of Statistics in 2013. Even the IMF has projected higher growth, but we’re being very cautious. Over there [referring to a slide], you will see how we compare with some other countries; with the whole of sub-Saharan Africa, they are growing at 5.6%, so we are much higher; even the emerging markets, we’re higher than them. And you can see Brazil, China, South Africa – South Africa at 2.8%, we at 6.75% et cetera – so we are doing well!

The GDP Illustration
Please continue reading on https://www.facebook.com/ngoziokonjoiweala/posts/571965056187096

There has recently been a lot of misinformation and misconception in our public debate on debt. My goal in this article is to shed some light on the public debt, to clarify the real state of Nigeria’s debt position, and hopefully, provide a knowledge platform for constructive debate.

Let me say at the outset that no one in government is supportive of a Nigeria that returns to a high state of indebtedness. On a personal note, having gone through tremendous stress during the quest for Paris Club debt relief, I am committed to a Nigerian economy that is fiscally prudent, balances its books and remains at a low state of indebtedness.

To begin, Nigeria’s overall debt is comprised of external and domestic debts. The external debt is typically owed to foreign creditors such as multilateral agencies (for example, the Africa Development Bank, the World Bank, or the Islamic Development Bank), to bilateral sources (such as the China Exim Bank, the French Development Bank or the Japanese Aid Agency), or to private creditors such as investors in our Eurobonds. The domestic debt, however, is contracted within Nigerian borders, usually through bond issues which are then purchased by Nigerian banks, local pension funds, and other domestic and foreign investors. The resources raised typically go to help fund the budget or other domestic expenditures, such as infrastructure projects. We also have some contractor arrears, and other local liabilities which are normally handled through the budget.

Both federal and state governments borrow domestically and externally. However, no state government can borrow externally unless guaranteed by the Federal Government. Similarly, state governments’ domestic borrowing is subject to federal government analysis and confirmation – based on clear criteria and guidelines that a state can repay based on their monthly FAAC allocations and internally generated revenues (IGR).

As a nation, we have had a difficult history with debt. As such, no one can forget the challenging times we went through from 2003 to 2005 trying, in the end, successfully to get relief on our large external debt. Neither the government nor any Nigerian wants a repeat of the country’s past history of large debts. That is why the current President Goodluck Jonathan administration, the Legislature, the Ministry of Finance, and the Debt Management Office, are very focused on a conservative and prudent approach to managing the national debt. Our current approach balances Nigeria’s needs for investment in physical and human infrastructure with a strong policy to limit overall indebtedness in relation to our ability to pay. Above all, any debts incurred must go for directly productive purposes which yield results that Nigerians can see.

First the numbers:

a. In 2004, prior to the Paris Club debt relief, Nigeria’s overall debt stock was very high. External debt stood at US$35.9 billion while the stock of the domestic debt amounted to US$10.3 billion resulting in a total of about US$46.2 billion or 64.3% of GDP excluding contractor and pension arrears.

b. After the successful debt relief initiative, Nigeria’s stock of foreign debt declined dramatically. Indeed, in August 2006, when I left office, Nigeria’s foreign and domestic debts amounted to US$3.5 billion and US$13.8 billion respectively – a total of US$17.3 billion or 11.8% of GDP.

c. By August 2011, when I resumed for the second time as Finance Minister, the domestic debt stock had grown substantially to US$42.23 billion, while the external debt was still a modest US$5.67 billion. This implied a total debt stock of US$47.9 billion or 21% of GDP. Note that while the debt stock grew, our national income also grew so that debt to GDP ratio (the parameter used globally to measure a country’s debt sustainability) remains modest and manageable.

d. Thus, the key noticeable change in Nigeria’s indebtedness in recent years has been the growth of domestic debt. There were two main reasons which resulted in this outcome. First, the initial growth of the domestic debt stock was because the federal government wanted to deepen the domestic debt markets and generate a yield curve for Nigeria which ultimately could help our corporate bodies to access the capital markets and borrow funds at more affordable rates. The DMO through its work has been successful in doing this.

Nigerian corporates can now raise money at reasonable rates at home and abroad, helping them secure resources to invest in the economy. Secondly, however, domestic debt was also raised to finance increased budget expenditures including consumption. For example, in 2010, the 53% salary increase for civil servants was financed by raising domestic bonds. Borrowing for recurrent expenditure or consumption, as was the case here is a practice that is less than ideal and one that we should endeavour not to repeat. We must learn that domestic debt should be incurred sparingly at modest and manageable rates so that government is able to service it and pay back domestic creditors. Failure to do so would severely undermine the finances of our private and institutional creditors to the detriment of the economy.

It is with this background in mind that we have put in place several measures to limit and manage the national debt. There are a number of specific policies we have introduced in the current administration to slow down the increase in our overall debt stock.

a. First, we have brought expenditures and revenues much more in line, through a low fiscal deficit of 1.81% GDP, to reduce the need for domestic borrowing. For example, we reduced annual domestic borrowing from N852 billion in 2011, to N744 billion in 2012, and to N577 billion in 2013. Our objective is to reduce government’s domestic borrowing to below N500 billion in the 2014 budget.

b. Second, for the first time, we have paid down part of our domestic debt rather than rolling all of it over. Beginning in February 2013, we successfully retired N75 billion worth of maturing domestic bonds. And we will continue with this practice in the coming years.

c. Third, we have established a sinking fund with an initial capitalisation of N25 billion. This fund will enable the government to retire maturing bond obligations in the future.

d. Fourth, we are working increasingly with states to get a clearer picture of domestic debts acquired by state governments, thanks to the comprehensive review recently completed by the DMO. Our particular concern is that state governments limit borrowings in line with their incomes and put any borrowings made to work on specific projects and programmes that bring direct beneficial results to their citizens.
[Please find attached the Debt-to-GDP ratio of selected economies]


e. Fifth, instead of the previous practice of contracting foreign loans in an ad hoc manner, we have streamlined the process for federal and state governments and made it transparent through the Medium Term Rolling External Borrowing Plan, which is reviewed and approved by the National Assembly. This plan presents the anticipated loans to be contracted by the government over a three-year time window, so that we can target funds to priority projects, and also make trade-offs where necessary. Notice that this covers planned foreign borrowing by both the federal and state governments for projects that will yield results in infrastructure, education, health, etc. Most loans contracted are on concessional or very favourable terms. For example, many of the multilateral loans are at zero interests, 40-year maturity, and 10 years grace. Others are at less than three per cent rate of interest.

f. And finally, we have put forward a Medium-Term Debt Strategy with a mix of limited external and domestic borrowing that is appropriate for the economy.

But let me repeat that we shall never be complacent about our national debt. We need to be constantly vigilant to limit the amount of debt and create room for the private sector instead to borrow. As such, we need to stay focused on three main priorities.
First, we should continue to monitor our external borrowing and ensure that we do not slip back to our high indebtedness prior to the debt relief programme. As I mentioned earlier, the External Borrowing Plan, helps to address this concern by ensuring that we always have a comprehensive, transparent view of our foreign borrowing. As at now, our external indebtedness is low at $6.67 billion or about three per cent of GDP.

Second, we should closely continue to monitor and limit our domestic debt, and ensure that it stays within a prudent and conservative range. We should pay off debt that is due to the extent of our ability.
And third, we should also continue to closely monitor borrowing by states to ensure that the debt burdens of our state governments remain within manageable levels and that borrowings are applied to specific projects that yield results for citizens of the state. In that regard, we enjoin banks and other lenders to be careful and prudent when lending to ensure that this is done within the existing rules, regulations and guidelines.

Former UN Secretary-General Kofi Annan once said: “Information and knowledge are central to democracy – and they are the conditions for development.” That is precisely why I have gone to some length to throw light on the real facts and the real issues regarding our debt situation and what the federal government is doing to address them. We need to create the basis to have a healthy and constructive public conversation on this issue, not a distorted and partisan battle.

• Dr. Okonjo-Iweala is Coordinating Minister for the Economy and Minister of Finance.

[center]FEDERAL MINISTRY OF FINANCE

News Release. April 25, 2013

OKONJO-IWEALA ELECTED CHAIR OF AU RISK AGENCY
… AGENCY HELPS AFRICAN GOVTS FIGHT EFFECTS OF EXTREME WEATHER CONDITIONS[/center]

As Africa faces the spiraling challenges of natural disasters caused by global warming, the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala has been announced as the first Chair of the Governing Council of African Risk Capacity, a continental financial climactic disaster risk management agency.

ARC is a specialized agency of the African Union which supports African states to mitigate the severe social and economic impact of extreme weather conditions through a structured insurance system.

By deploying innovative technology based on satellite weather surveillance and software run by independent risk professionals, the ARC will help African governments plan better for emergency situations, manage them efficiently, greatly reduce response time and ensure sufficient distribution of resources to disaster areas.

Reacting to the development, Okonjo-Iweala expressed her delight at the honour.

She described the ARC as a timely and innovative African response to the increasing challenges brought on by extreme weather conditions which deserves the support of all Africans.

In her words: “Not only can we predict extreme weather conditions, with a well-managed risk fund we are prepared to address them and ensure that the most vulnerable people in our communities receive protection.

“The ARC will support the governments of its member state to manage response programs effectively. And ensure that they have resources to meet natural disasters head-on.”

She added that ARC is a structured response which will help governments in Africa stop the bad practice of moving resources away from critical areas during periods of emergency.

The key objective of ARC is to ensure that the climate risk the continent is facing is controlled so that it does not negatively affect economic growth and social development.

Partners who supported the creation of the ARC Agency include The Rockefeller Foundation, the UK’s Department for International Development, the Swedish International Development Cooperation Agency (SIDA), Swiss Agency for Development and Cooperation (SDC) and the International Fund for Agricultural Development.

Dr Richard Wilcox, interim Director-General of the ARC said; “The launch of the ARC agency harnesses pan-African solidarity in approaching climate risk in a financially efficient way. Welcomed by the G8 last year, ARC is a critical step for African governments moving from managing crises to managing risks”.

Also reacting, C.D Glin, Associate Director at The Rockefeller Foundation’s Africa Regional Office said: “ARC represents a great example of our support for programmes that seek to find new ways of meeting the dynamic challenges of a developing continent, and improving outcomes for poor or vulnerable people.”


Paul C Nwabuikwu
Special Adviser to the Coordinating Minister for the Economy and Minister of Finance

FEDERAL MINISTRY OF FINANCE
News Release, March 22, 2013

ACHEBE WAS A MOVEMENT, NOT JUST A MAN.
HE WILL NEVER DIE – OKONJO-IWEALA

We received the news of the passing of Prof Chinua Achebe with a sense of profound loss. Yes, he was 82 years old and by any measure not too young to die. But Achebe had for so long been a part of our lives that the thought of his death has an unreal quality.

Additionally, having known him and his wonderful wife, Aunty Christy since I was a teenager, there is, for me, a very personal feeling to this loss.

But the good news is that though he is gone, Achebe is very much alive. He is alive in his works and in his words and in his ideas. Certainly his idea that African culture has intrinsic value beyond anthropological voyeurism is very much alive. That is why his great intellect lives on and the man will never die!

For me and countless others, he was a personal inspiration and indeed a hero. That is why my co-author, Tijan Sallah and I wrote the biography of Achebe for young adults called “Teacher of Light” to capture the essential Achebe for our young people.

Professor Chinua started life as a man, but ended it as a MOVEMENT - a movement for African literature, good governance and the dignity of man.

We extend our condolences to the entire Achebe family at this difficult time. May the Almighty comfort them and all of us at this difficult time.


Dr Ngozi Okonjo-Iweala
Coordinating Minister for the Economy and Minister of Finance

BUDGET OFFICE OF THE FEDERATION

FEDERAL MINISTRY OF FINANCE


News Release. March 15, 2013

DG BUDGET DID NOT DIRECT MDAs TO IGNORE 2013 APPROPRIATION ACT

Our attention has been drawn to several media reports suggesting that the Director-General, Budget Office of the Federation issued a directive to MDAs NOT to implement the 2013 Appropriation, but to await the passage of the Budget Amendment Bill.

We wish to state categorically that this is absolutely UNTRUE. At no time since the passage of the 2013 budget and subsequent assent by Mr. President did the Budget Office issue such a directive.

The true situation is as follows:

Following the passage of the 2013 Budget, a series of consultations were held between the National Assembly (NASS) and the Executive, during which observations were made on aspects of the passed bill that required adjustment, including personnel cost, overhead votes and critical capital projects. It was agreed that an Amendment should be sent to NASS for consideration after assent by Mr. President.

The Budget Office subsequently issued a brief Circular Ref No. BD/2000/Exp/S.132/T/16, dated 6th March 2013, to guide MDAs on steps to observe in proposing any amendment to their budgets, along with a template. They were to focus on the personnel cost, overhead and critical capital projects.

We wish to reiterate the following
(i) There was NOTHING in the Circular remotely suggesting that the 2013 Appropriation Act should not be implemented, as alleged. That was never the subject of the Circular.

(ii) Far from being disrespectful to the Appropriation Act, the Guideline took pains to stress the need for MDAs, in preparing their Amendment proposal, to respect the Act as passed.

It is hoped that this would clear the air for the general public and all stakeholders.

Francis O. Ojiah
Director, Administration
Budget Office of the Federation

FEDERAL MINISTRY OF FINANCE

News Release, March 14

FINANCE MINISTRY RELEASES N400 BILLION 1ST QUARTER CAPITAL

The Federal Ministry of Finance has released the sum of N400 billion as first capital budget to give fresh impetus to the execution of projects captured in Budget 2013.

Of this amount, N120 billion had been frontloaded to cater for two important initiatives:

• N75 billion for retiring bonds which have come due. This is in line with the new debt management strategy which focuses on reducing the stock and flow of debt in a proactive manner.

• N45 billion for the payment of PHCN workers.

Paul C Nwabuikwu
Special adviser to the Coordinating Minister for the Economy and Minister of Finance

TRANSPARENT NIGERIA
REVENUE DATA

Fellow Nigerians,

In concert with the recent overview of the 2013 budget, I would like to direct your attention to Transparent Nigeria (www.transparentnigeria.com), which has recently published budget performance, tax revenue, and customs revenue data over the past five years. Please share this information with your networks. An informed Nigerian is an empowered one!

NOI

FEDERAL MINISTRY OF FINANCE
CLARIFICATIONS ON THE STATE OF THE ECONOMY, THE EXCESS CRUDE ACCOUNT AND RELATED ISSUES

• In recent times, a number of comments and articles have appeared in the media, which have tended to talk down the performance of the Nigerian economy and question the accuracy and transparency of the Excess Crude Account and the External Reserves of the country. It is essential that Nigerians understand the exact position of the economy, and the integrity of these important government accounts. This note aims to provide some facts for Nigerians on these issues, to clarify the exact position, and finally to put these concerns to rest.

• The specific issues that have been raised in recent times include the health and prospects of the Nigerian economy, the composition of the external reserves, and purported discrepancies in account balances reported by the Ministry of Finance and the Central Bank of Nigeria (CBN).

• First, the Nigerian economy is strong. Our economic performance is robust when viewed against a whole range of objective factors. Inflation is now down to single-digit at 9.0% in January 2013, compared with 12.6% in January 2012. The exchange rate has been relatively stable, and the fiscal deficit at just under 2% of GDP is on a downward trajectory, and below our threshold of 3% of GDP. Our national debt is at a sustainable level at about 19.4% of GDP. Overall, GDP growth for 2012 was 6.5%, and projected at 6.75% for 2013, compared with the projected global growth of 3.5%. The above facts have been independently noted and validated by international ratings agencies (such as Fitch, Standard & Poor's and Moody's) who have upgraded the country's economic outlook, even as other countries are being downgraded. In addition, Nigeria's bonds have recently been included in the Barclays and JP Morgan Emerging Market indices.

• Of course, we recognize the socio-economic challenges which we face as a nation. We know we still have a long way to go but let us keep working to correct what is wrong and stop focusing on the denigration of what is being done right. In this regard, we need to create more jobs for our youth to curb unemployment. Poverty needs to decrease at a faster pace, as we do not want excessive inequality to be a feature of our economic growth. For example, the recent poverty statistics released by National Bureau of Statistics show a slight decline in poverty levels of about 2% between 2003 and 2010. This needs to be further accelerated. The cost of governance also needs to be reduced, and the government is taking steps in this direction. We have reduced the share of recurrent expenditures in the budget from 74% in 2011 to 71% in 2012, and to 68% in 2013. We aim to push for a 60% recurrent and 40% capital budget ratio in the medium term.

• As part of the Transformation Agenda, President Goodluck Jonathan has emphasized the diversification of the economy to promote inclusive growth and create jobs. This is being achieved through investments in agriculture, housing and construction, manufacturing, aviation, power, roads, rail, solid minerals and the information and communication technology (ICT) sectors by both government and the private sector. These sectors are gradually transforming the economy, and creating jobs in the process. The economy is moving in the right direction.

• As noted earlier by the Federal Government, Nigeria's reported level of external reserves is comprised of three parts: the CBN's external reserves, the Excess Crude Account, and the Federal Government's funds belonging to agencies such as the Nigerian National Petroleum Corporation for joint venture cash calls and so on. This is simply a matter of definition, and follows international best practices and reporting guidelines. It is thus unnecessary to continue to dwell further on this issue.

• There have also been claims of inconsistency of account balances provided by the Ministry of Finance and the CBN. It is worth noting that the Ministry of Finance typically reports its balances following Federal Accounts Allocation Committee (FAAC) Meetings, which often take place at the middle of the month, whereas CBN data are reported at the end of each month. There is thus a time lag between the reports from the two institutions. As a result, there are usually some differences due to 'transit items' which are yet to be reconciled in both accounts. In addition, for quite a while, the CBN excess crude reports have included the $1 billion allocated to the Sovereign Wealth Fund as this is still domiciled with the CBN, whereas the Ministry of Finance does not regard it as part of the distributable Excess Crude Account.

• As an example, in Table 1 below, we provide the monthly balances of the Excess Crude account reported by the Ministry of Finance and the CBN for the period June 2012 to January 2013. As can be clearly seen, after accounting for the $1 billion allocated to the SWF, the differences are minor and are the result of time lags in the reporting mentioned earlier. Nigerians should closely examine the table and judge for themselves the reasons for the discrepancy and whether Ministry of Finance and CBN are so muddled in their accounting as some would like to suggest.

• There have also been issues raised regarding the rate of growth of the foreign reserves and the Excess Crude Account. It is worth recalling that the Excess Crude Account was established partly to provide a cushion for the Nigerian economy in times of a global downturn. In this regard, all three tiers of Government, relied on savings in the Excess Crude Account to plug the shortfall in their revenues following the collapse of oil prices in 2008. Moreover, there have been withdrawals from the ECA to pay for petroleum subsidy claims which increased sharply in recent years from N291 billion in 2007 to about N2188 billion in 2011. Finally, there has been the increased loss of oil revenues due to an upsurge in the incidence of illegal crude oil bunkering and oil theft.

• In conclusion, the Federal Ministry of Finance wishes to stress that the outlook for the Nigerian economy remains good, despite the current global economic uncertainty. We accept that government should be accountable to their citizens, and transparent to its people in terms of information, particularly regarding public finances. In this regard, we have made efforts to publish revenues allocated to all tiers of government, we have published the Federal Government's budgets down to the last details, and we have published the subsidy reinvestments (SURE-P) payments to all tiers of government. We have also published subsidy payments to oil marketers and further published the names of companies that defrauded the government in the oil subsidy regime. We will continue to make every effort to respond to demands for greater transparency because we believe this lies at the heart of good governance.

SIGNED.

Dr. Ngozi Okonjo-lweala
Coordinating Minister for the Economy and Hon Minister of Finance

Government determined to get back $1bn paid to oil companies which failed to deliver imported fuel.

It is one year since about 140 Nigerian oil companies were said to have been paid close to $7bn by the government to import fuel.

Many of those involved did not deliver the fuel and an ongoing government investigation has so far detected that at least $1bn was wrongly paid out to such companies.

Oil and gas executives say the sector is recovering from the damage done to the image of the industry, while the government says it is determined to get the money back.

http://aje.me/Xp2kA2

Ghana advised to manage oil find transparently
Dr Ngozi Okonjo-Iweala has cautioned Ghana to illustrate greater transparency and accountability in managing the fledgling oil industry to avoid the challenges associated with the harnessing of the natural resource.

“My sisterly advice is that you should be uncompromising on issues of transparency and accountability in the sector,” the Nigerian Finance Minister stressed.

Dr Okonjo-Iweala, who is also the Nigerian Coordinating Minister of the Economy made the recommendation during a lecture on: “What Africa should do to claim the 21’st Century,” at the 2nd John A. Kufuor Global Development Series 2013 in Accra on Friday.

She said before her country discovered oil the national economy was well-diversified, with agriculture contributing about 64 per cent to Gross Domestic Product (GDP), whilst the manufacturing sector was netting five per cent.

However, “once oil came on stream, the non-oil sectors contracted, the psychology and mentality of the people changed, and a lot of entrepreneurial energy was now directed at rent-seeking activities liking chasing after government contracts rather than productive investments”, she said.

By 2010, agriculture had shrunk to about 40 per cent of GDP, and manufacturing slipped to about four per cent of GDP.

Dr Okonjo-Iweala said Ghana’s Petroleum Revenue Management Act was praised widely since the legislation specified how petroleum revenue should be collected and allocated.

She however warned that temptations could set in at some level and therefore recommended policymakers and leaders to be more transparent in the negotiations of contracts.

They should also do their homework thoroughly before beginning contract negotiations with foreign oil firms as well as investing the oil income in public infrastructure.

Dr Okonjo-Iweala, who is also a former Managing Director of the World Bank Group, called on African leaders to pay close attention job creation, addressing widening inequality, building resilience against climate shocks, financing development and deepening regional integration.

She noted that Africans could do better if they work harder at regional and sub-regional integration stressing: “Nigeria and Ghana can be a collective powerhouse of Africa and West Africa if we can look closely at economic ties we need to build to bind us…together.”

“Infrastructure is certainly key, like making the West Africa Gas Pipeline, work better. But trade is also important and we need to facilitate commerce in our sub-region, making it easier for the private sector to manufacture and sell goods in our countries.”

Dr Okonjo-Iweala Dr Ngozi observed that the necessary building blocks for development are finally falling in place, good economic policies, good governance, and investments in infrastructure and skills.

“With these building blocks in place, we can create a platform for the private sector to grow,” she said.

Mr John Agyekum Kufuor, Ghana’s former President noted that human and natural resources abound in Africa but due to un-groomed and un-nurtured leadership the people are living in abject poverty.

He said leadership is the most important and decisive factor in all human activity that is why his Foundation is seeking to establish good leaders by creating a Centre of Distinction that would train budding world leaders in all facets of human endeavour.

The Foundation would fashion out measures to promote good governance on the continent through electoral monitoring, strengthening electoral systems, conflict mediation and resolution, promoting accountability and transparency and deepening democratic structures.

http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=265737#