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FG Lost N70bn to Failed Banks – Accountant-General

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  • FG Lost N70bn to Failed Banks – Accountant-General

The Accountant-General of the Federation, Alhaji Ahmed Idris, on Thursday said over N70bn of funds belonging to the Federal Government had been lost to failed banks in the country.

He said this in a presentation on the ‘Challenges of the implementation of the Treasury Single Account in the Nigerian public service’ during a forum organised by the Bureau of Public Service Reforms.

Idris, who did not disclose the identity of the failed banks, said the TSA had been used by the government to unify all its accounts by ensuring that all monies belonging to the Federal Government were kept with the Central Bank of Nigeria.

He explained that the initiative, which commenced fully in September 2015, had been complied with by over 900 agencies of government, with over 17,000 bank accounts closed, while huge sums of money had been moved from the banks to the CBN.

Idris, who was represented at the event by Deputy Director/Coordinator, TSA/e-Collection Funds Department, Accountant-General of the Federation’s Office, Mr. Sylva Okolieaboh, said the TSA policy had been able to assist the government to address a lot of impediments affecting the efficiency of public finance.

He stated, “The cardinal objective of the TSA is to facilitate the implementation of the Federal Government cash management policy.

“The TSA is intended to address multiple bank accounts of over 17,000, countless dormant accounts with huge balances, inability to determine consolidated cash position of government, borrowing and incurring charges when there are idle balances in Ministries, Departments and Agencies’ account, and delayed remittance of revenue and collections. Over N70bn of Federal Government funds was lost to failed banks.”

The AGF told participants at the event that the government was currently enjoying a lot of benefits from the implementation of the TSA policy.

For instance, he stated that through the policy, the government had been able to block leakages and abuse, which had characterised the public sector before its commencement in September 2015.

Apart from blocking leakages, Idris said the TSA initiative had assisted the government to overcome the burden of indiscriminate borrowings by the MDAs thus saving the government a lot of bank charges associated with the borrowings.

In addition, he said through the policy, the government had eliminated various financial charges which hitherto stood at N11bn.

According to him, despite the successes so far recorded, there are still some institutional and operational challenges that are affecting the scheme.

He gave some of them as capacity deficit, lack of clarity on stakeholders’ roles, conflicting directives and signals, resistance based on limited understanding of the TSA, and non-enrolment of key arms of government.

Others are lump sum transfer of the MDAs’ balances by Deposit Money Banks, difficulty in accessing bank statements and associated reconciliation issues, and multiplicity of sub-accounts.

The Acting Director-General, BPSR, Mr. Dasuki Arabi, said the agency considered the TSA as an important policy that would assist to improve transparency and accountability in government expenditure.

“One of the key concerns of the government has been how to tackle the menace of corruption and reduce it to the barest minimum. The BPSR considers the TSA policy to be an extremely important policy initiative in improving transparency and accountability in government expenditure,” he added.

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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Nigeria Aims for N2 Trillion Annual Revenue from Marine and Blue Economy by 2027

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Nigeria has set an ambitious target of generating N2 trillion in annual revenue from this sector by the year 2027.

The revelation came from the Minister of Marine and Blue Economy, Adegboyega Oyetola, during an ongoing ministerial briefing in Abuja on Tuesday.

Outlined within a comprehensive strategy, the plan involves a three-pronged approach to significantly increase revenue generation and operational efficiency within the marine sector.

Oyetola highlighted the imperative of automating revenue collection processes to eradicate bottlenecks and enhance transparency and accountability.

By deploying revenue assurance technologies, the aim is to ensure accurate billing aligned with established contracts and services rendered, thereby preventing revenue leakage.

The ministry plans to commission revenue enhancement studies targeting various departments and agencies to identify avenues for maximizing the use of existing assets.

This includes leveraging concessions to the private sector and fostering public-private partnerships to ensure efficient utilization of national assets.

Recognizing the vast potential of the blue economy, Nigeria intends to embark on investment promotion campaigns aimed at both domestic and international investors.

This strategy seeks to unlock new revenue streams within the marine sector, paving the way for sustainable economic growth.

Minister Oyetola emphasized the importance of harnessing Nigeria’s marine and blue economy, noting its significant role in driving economic diversification and reducing dependency on traditional sectors.

He underscored the government’s commitment to fostering an enabling environment for investment and innovation within the sector.

The ambitious revenue target reflects Nigeria’s determination to tap into its vast marine resources, which have long been underutilized.

With strategic planning and concerted efforts, the country aims to position itself as a key player in the global blue economy, unlocking opportunities for sustainable development and prosperity.

As Nigeria charts its course towards achieving this ambitious goal, stakeholders across government, industry, and civil society will play a pivotal role in driving forward the necessary reforms and initiatives to realize the full potential of the marine and blue economy.

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Investor Optimism Dwindles One Year After Tinubu’s Reforms

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One year into President Bola Tinubu’s administration, the initial investor enthusiasm over his ambitious economic reforms is fading.

Despite significant changes aimed at revitalizing Nigeria’s economy, persistent challenges such as currency volatility and high inflation are dampening investor confidence.

Upon assuming office in late May 2023, Tinubu enacted a series of reforms intended to attract foreign investment and boost dollar liquidity.

These included eliminating costly fuel subsidies, appointing ex-Citibank executive Olayemi Cardoso as the new central bank governor, and overhauling the country’s exchange-rate policies, which effectively devalued the naira.

While these steps initially sparked optimism and increased dollar inflows, the momentum has since waned.

Kevin Daly, a portfolio manager at London-based Abrdn Investments Ltd., highlighted the need for further stability in Nigeria’s foreign exchange market before considering additional investments in local currency bonds.

“We are likely to add to local currency bonds once FX volatility declines, but the timing of that remains up in the air,” Daly remarked.

He emphasized that the central bank cannot be the sole provider of FX liquidity for the market, calling for more foreign portfolio flows and a degree of de-dollarization.

Data from Tellimer Ltd. reveals that investor inflows into Nigeria’s foreign-exchange market fell by nearly 20% in April, averaging $200 million daily, and dropped further to $180 million in the first three weeks of May.

Since June, the naira has depreciated by almost 67% against the dollar. Additionally, the reintroduction of fuel subsidies, following public backlash over rising living costs, has further complicated the economic landscape.

Inflation remains a significant hurdle, with rates soaring to approximately 33.7%, far outpacing the central bank’s policy rate of 26.25%.

This has deterred investors like Ayo Salami, chief investment officer at Emerging Markets Investment Management Ltd., from venturing into local currency bonds, deeming them unattractive under current conditions.

Another critical issue is the repatriation of funds. While Nigeria offers higher equity valuations and yields compared to some emerging and frontier markets, peers like South Africa, Egypt, Kenya, Turkey, and Pakistan present lower repatriation risks, more credible policy frameworks, and advanced policy corrections.

Ladi Balogun, CEO of Lagos-based FCMB Group, underscored the importance of consistent and clear policy direction to restore investor confidence.

“I think as long as we can be consistent and clear about policy direction, when it comes to monetary policy and the like, then I think you will see confidence return, then you will see liquidity return,” Balogun stated. “That is when you will see international investors come back.”

As Nigeria navigates these economic challenges, the road to restoring and sustaining investor confidence remains complex and fraught with hurdles. The coming months will be crucial in determining whether Tinubu’s administration can achieve the stability and growth it seeks.

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IMF Boosts China’s 2024 Growth Forecast to 5% Amid Strong Start

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The International Monetary Fund (IMF) has raised its forecast for China’s economic growth in 2024 to 5%, up from its earlier estimate of 4.6%.

This adjustment reflects a robust expansion at the start of the year and additional government support aimed at stabilizing and invigorating the economy.

The IMF’s latest projection aligns with China’s target growth rate of around 5% for the year.

The upward revision comes on the heels of a better-than-expected 5.3% growth in the first quarter, indicating a strong recovery trajectory despite ongoing challenges in the housing market, which continues to dampen domestic demand.

Gita Gopinath, the IMF’s First Deputy Managing Director, highlighted the dual forces driving this positive outlook.

“We certainly are seeing that consumption is recovering, but it has some ways to go,” Gopinath noted in a recent interview with Bloomberg News.

“The strength we’re seeing in public investment remains. Private investment is still weak, mainly because of the weakness in the property sector.”

The IMF’s statement emphasized the need for Beijing to enhance monetary and fiscal support, particularly addressing the protracted housing crisis.

Gopinath underscored the urgency of protecting buyers of pre-sold unfinished homes and accelerating the completion of these projects to stabilize the sector.

Earlier this month, Chinese authorities unveiled new measures to support the real estate market.

These include easing down-payment requirements for buyers and injecting 300 billion yuan ($42 billion) of central bank funding to assist local governments in purchasing excess inventory from developers. However, Gopinath argued that these steps should be expanded.

“Fiscal policy should prioritize providing one-off central government financial support for the real estate sector,” she stated, adding that the current low inflation environment offers room for further monetary easing.

Beyond the domestic landscape, the IMF is also monitoring the implications of international trade tensions. Gopinath expressed concerns over the rising number of trade restrictions globally, noting that about 3,000 new trade barriers were introduced in 2023 alone, triple the number in 2019.

These developments are contributing to an emerging trend of geopolitical fragmentation in global trade.

“There has been an increase in more restrictive trade policies across countries,” Gopinath said. “Trade across countries that are more geopolitically aligned is holding up better than trade across countries that are less geopolitically aligned.”

The IMF’s revised forecast underscores a cautiously optimistic outlook for China’s economy.

While strong public investment and government support are driving growth, the ongoing weaknesses in the property sector and global trade tensions present challenges that need to be carefully navigated.

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