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FG Urged to Improve Efficiency in Public Sector

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  • FG Urged to Improve Efficiency in Public Sector

The federal government has been advised to pursue economic liberalisation policies, including privatisation policies so as to improve efficiency in the public sector.

Analysts at Afrinvest West Africa Limited that gave the advice in a report at the weekend said this was neccessary to generate the much-needed cash flow to invest in capital projects and increase borrowing capacity.

Nigeria’s fiscal deficit had been projected to grow by 22.3 per cent from N2.2 trillion in 2016 to N2.7 trillion 2017 fiscal year, thus deficit/GDP ratio is expected to settle at 2.5 per cent in 2017 from 2.1 per cent in 2016.

Whilst the government’s decision to aggressively borrow from the local debt market to fund the budget deficit in 2016 reduced its susceptibility to exchange rate risk, the Medium-Term Expenditure Framework (MTEF) for 2017 suggests that over the medium term, the federal government will be more skewed towards external financing options, in order to free up local funds for private sector investment.

“However, high debt servicing cost to revenue ratio remains a constraint on ability to continue running below 2.5 per cent fiscal deficit to GDP ratio notwithstanding low debt to GDP ratio (17.0%). Also, given the bearish outlook for the naira, the plan to redirect attention towards external financing options suggests the projected amount for debt servicing will shoot up in 2017 – depending on the performance of the naira.

“The 2016 fiscal year has been largely synonymous with a sharp slowdown in economic activities largely as a result of lower oil earnings which constrained fiscal revenue and foreign exchange supply, as well as underwhelming policy responses and a brooding sub-national fiscal crisis which peaked in the first half of 2016,” the report added.

With a change in monetary policy tact to inflation targeting in first quarter 2016 – demonstrated by two rate hikes – in a bid to bolster FX supply, the federal government has been clear on its intent to counterbalance monetary tightening by utilising available fiscal space to buoy expenditure as a strategy to deepen economic diversification and stimulate economic activities.

Also, it pointed out that despite government’s intent to diversify revenue base and relegate oil earnings to the third most important in 2016, data compiled from first half 2016 budget performance puts oil revenue’s contribution to 42.6 per cent of total, the highest amongst all sources.

Indeed, all non-oil revenue sources ran below projected run rates in the first half of 2016. Income from corporate income tax (CIT) was 62.7 per cent less than expected while independent revenue was only 14.2 per cent of projections for half year.

“Thus, the FGN has largely relied on deficit financing to balance its books, with fiscal deficit as at first half of 2016 reported at N1.5trillion (66.6% of total approved for FY:2016), implying a fiscal deficit to GDP ratio of 3.2 per cent compared to 2.1 per cent legislated and three per cent ceiling for a full fiscal year.

Of N1.5 trillion deficit raised, only N159.1bn was released to cash-back capital projects in the period.

“We largely expect revenue to improve in H2:2016 – as observed from FAAC allocations in Q3:2016 – due to translation of oil earnings at lower exchange rate, but still expect fiscal deficit (as percentage of GDP) at year end to exceed 2016 target by a minimum of 0.7 per cent,” the report added.

Nevertheless, last week, the FGN submitted the MTEF and Fiscal Strategy Paper for 2017 – 2019 to the National Assembly with ambitious expenditure targets.

The MTEF provided the framework for the 2017 budget and illuminated the expenditure outlook and revenue expectations for the period.

Aggregate expenditure in the proposed 2017 budget was projected to surpass the N6.1trillion in the 2016 budget by 13.3 per cent (circa N805.9bn) to N6.9 trillion in line with objectives to reflate the economy.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Netanyahu Stands Firm as US Halts Bomb Shipment Over Rafah Invasion Warning

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Amidst escalating tensions between Israel and the United States, Israeli Prime Minister Benjamin Netanyahu has adopted a defiant stance following the US decision to halt a shipment of bombs and warned against Israel’s potential invasion of the southern Gaza city of Rafah.

In a bold statement, Netanyahu declared, “If we have to stand alone, we will stand alone,” emphasizing Israel’s resolve to pursue its objectives despite opposition.

The Prime Minister’s comments, delivered via social media and a subsequent interview with American talk show host Dr. Phil, underscore Israel’s determination to address security threats posed by the Gaza Strip, particularly by Hamas militants operating in Rafah.

Netanyahu reiterated the necessity of military action in Rafah to eliminate the remaining Hamas battalions, condemned Hamas’s history of violence and reiterated Israel’s commitment to achieving victory and ensuring the safety of its citizens.

The US administration, led by President Joe Biden, expressed concerns over the potential humanitarian impact of an Israeli invasion of Rafah, prompting the decision to withhold additional offensive weapons shipments to Israel.

Biden’s statement echoed broader international apprehensions about the escalation of violence and civilian casualties in the conflict-stricken region.

However, Netanyahu remained resolute in Israel’s approach, asserting the country’s right to defend itself against security threats. He emphasized Israel’s efforts to minimize civilian casualties and facilitate the evacuation of civilians from Rafah before any military action.

Despite the US’s decision to pause the bomb shipment, Netanyahu affirmed Israel’s commitment to its longstanding alliance with the US. He acknowledged past disagreements between the two nations but expressed optimism about resolving current tensions through dialogue and cooperation.

In response, White House officials reiterated the US’s support for Israel’s security while urging restraint and emphasizing the need to avoid actions that could exacerbate the humanitarian crisis in Gaza.

The administration clarified that the decision to halt the bomb shipment was aimed at preventing potential civilian casualties in Rafah.

The confrontation between Israel and the US underscores the complexity of navigating regional conflicts and balancing strategic interests. As tensions persist, both nations face the challenge of reconciling their respective security imperatives with broader humanitarian concerns, seeking to avert further escalation while addressing the root causes of the conflict in the Middle East.

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EFCC Declares Former Kogi Governor, Yahaya Bello, Wanted Over N80.2 Billion Money Laundering Allegations

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Yahaya Bello

The Economic and Financial Crimes Commission (EFCC) has escalated its pursuit of justice by declaring former Kogi State Governor, Yahaya Bello, wanted over alleged money laundering amounting to N80.2 billion.

In a first-of-its-kind action, the EFCC announced Bello’s wanted status in connection with the alleged embezzlement of funds during his tenure as governor.

The commission, armed with a 19-count criminal charge, accused Bello and his cohorts of conspiring to launder the hefty sum, which was purportedly diverted from state coffers for personal gain.

The declaration of Bello as a wanted fugitive came after a series of failed attempts by the EFCC to effect his arrest.

Despite an ex-parte order from Justice Emeka Nwite of the Federal High Court, Abuja, mandating the EFCC to apprehend and produce Bello in court for arraignment, the former governor managed to evade capture with the reported assistance of his successor, Governor Usman Ododo.

This latest development shows the challenges faced by law enforcement agencies in holding powerful individuals accountable for their actions.

However, it also demonstrates the unwavering commitment of the EFCC to uphold the rule of law and ensure that justice is served, irrespective of the status or influence of the accused.

In response to the EFCC’s declaration, the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, issued a stern warning to Bello, stating that fleeing from the law would not resolve the allegations against him.

Fagbemi urged Bello to honor the EFCC’s invitation and cooperate with the investigation process, saying it is important to uphold the rule of law and respect the authority of law enforcement agencies.

The EFCC’s pursuit of Bello underscores the agency’s mandate to combat corruption and financial crimes, sending a strong message that individuals implicated in corrupt practices will be held accountable for their actions.

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Concerns Mount Over Security as National Identity Card Issuance Shifts to Banks

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Amidst the National Identity Management Commission’s (NIMC) recent announcement that the issuance of the proposed new national identity card will be facilitated through applicants’ respective banks, concerns are escalating regarding the security implications of involving financial institutions in the distribution process.

The federal government, in collaboration with the Central Bank of Nigeria (CBN) and the Nigeria Inter-bank Settlement System (NIBSS), introduced a new identity card with payment functionality, aimed at streamlining access to social and financial services.

However, the decision to utilize banks as distribution channels has sparked apprehension among industry stakeholders.

Mr. Kayode Adegoke, Head of Corporate Communications at NIMC, clarified that applicants would request the card by providing their National Identification Number (NIN) through various channels, including online portals, NIMC offices, or their respective banks.

Adegoke emphasized that the new National ID Card would serve as a single, multipurpose card, encompassing payment functionality, government services, and travel documentation.

Despite NIMC’s assurances, concerns have been raised regarding the necessity and security implications of introducing a new identity card system when an operational one already exists.

Chief Deolu Ogunbanjo, President of the National Association of Telecoms Subscribers, questioned the rationale behind the new General Multipurpose Card (GMPC), citing NIMC’s existing mandate to issue such cards under Act No. 23 of 2007.

Ogunbanjo highlighted the successful implementation of MobileID by NIMC, which has provided identity verification for over 15 million individuals.

He expressed apprehension about integrating the new ID card with existing MobileID systems and raised concerns about data privacy and unauthorized duplication of ID cards.

Moreover, stakeholders are seeking clarification on the responsibilities for card blocking, replacement, and delivery in case of loss or theft, given the involvement of multiple parties, including banks, in the issuance process.

The shift towards utilizing banks for identity card issuance raises fundamental questions about data security, privacy, and the integrity of the identification process.

With financial institutions playing a pivotal role in distributing sensitive government documents, there are valid concerns about potential vulnerabilities and risks associated with this approach.

As the debate surrounding the security implications of the new national identity card continues to intensify, stakeholders are calling for greater transparency, accountability, and collaboration between government agencies and financial institutions to address these concerns effectively.

The paramount importance of safeguarding citizens’ personal information and ensuring the integrity of the identity verification process cannot be overstated, especially in an era of increasing digital interconnectedness and heightened cybersecurity threats.

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