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Osinbajo Defends Nigeria’s $73bn Debts

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  • Osinbajo Defends Nigeria’s $73bn Debts

Vice-President Yemi Osinbajo on Tuesday defended Nigeria’s $73bn debts despite admitting that the debt profile grew by another $10bn between 2015 and this year.

In 2015, the VP said the debt size was $63bn, growing by $10bn to hit $73bn in 2018.

However, Osinbajo, who spoke during a town hall meeting with Nigerians in Abuja, defended the debt profile, arguing that the country was still within the safe region, especially when compared with other countries.

He said people had misconceptions when they argued that the present administration of President Muhammadu Buhari was piling up more debts than its predecessors.

Osinbajo dismissed those who expressed such fears and gave an analysis on why he believed debts were not the country’s major problems.

Osinbajo argued that the country’s debts rose the “sharpest” between 2010 and 2014 when oil prices were also quite high.

He explained, “I want to give you the facts and figures on the debt issue. The dollar-denominated debts of Nigeria –that is the debts of the Federal Government, the states and local governments.

“In 2010, Nigeria’s debt was $35bn; 2011, it was $41bn; in 2012, it was $48bn; in 2013, it became $64bn; 2014, it rose to $67bn; 2015, it fell to $63bn; 2016, $57bn; 2017, $70bn; 2018, it is $73bn.

“So, the difference between 2015 and now is $10bn.

“One of the things that I always want you to bear in mind is that when oil prices were at their highest, between 2010 and 2014, that was when we had the sharpest rise in debts.”

The VP further argued that before people reached the conclusion that Nigeria was piling up much debts, they must also check the debt to Gross Domestic Product rate.

He stated, “Our debt to GDP is one of the lowest among the countries that are frequently compared to us. Our debt to GDP is 20 per cent. When you compare it to other countries, you will see that Ghana is about 68 per cent, whereas Ethiopia’s is 48 per cent. In terms of the size of our economy and debt, we are doing okay.”

But, he also informed his audience that the country had a challenge with revenue collection, which did not match its debt profile.

Osinbajo added, “We are not collecting enough revenue compared to what we want to spend.

“Are we collecting enough taxes? If you look at the Federal Inland Revenue Service Figures, it say 914 Nigerians pay the self-assessed tax of more than N10m. Of the 914, 912 live in Lagos and the other two live in Ogun State.

“No other Nigerian outside of Lagos and Ogun pay the self-assessed tax of more than N10m. So, we are simply not collecting enough revenue.”

To address the revenue collection gap, he said the Federal Government and the states were already discussing harmonising tax collections.

Osinbajo also spoke on the government’s N-Power Programme, saying that it would target additional one million beneficiaries in the next phase.

“At the moment, we have taken up to 500,000 and in the next phase, we are looking at another 200,000 and closely followed by another 300,000.

“In all, we will be employing up to a million, and that will be the largest post-tertiary job programme in the entire Africa.

“The reason why we have done this is that of the employment problems that we have, we may not be able to engage everybody but at least the government must give some direct provision of jobs.”

Commenting on the current strike by the Academic Staff Union of Universities, the VP said much as the government would continue to engage the union in discussions, it did not support the idea of spending over 70 per cent of the country’s annual budget on the payment of salaries.

“We are dealing with a population of about 200 million people who depend on a budget of about N8.6 trillion (2017) and of that amount, 70 per cent of it goes to salaries and overheads, and it goes to less than two million people.

“It is impossible to answer to all of the monetary needs of people by the size of the federal budget”, the VP said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Amaechi Inaugurates Seven-Man Panel to Probe Suspended NPA Boss, Hazida

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The Minister of Transportation, Mr. Chibuike Rotimi Amaechi, Monday inaugurated a seven-man panel of inquiry to probe the suspended Managing Director of the Nigerian Ports Authority (NPA), Hajia Hazida Bala-Usman.

The panel is to examine and investigate the administrative policies and strategies adopted by the suspended Managing Director while at the helms and confirm compliance with extant laws and rules from 2016 till date.

The minister, during the inauguration of the committee in Abuja, noted that the terms of reference of the panel include examining and investigating issues leading to the termination of pilotage and other contracts of NPA and confirm compliance with the terms of the respective contracts, court rulings and presidential directives.

“To also examine and investigate compliance with the communication channel as obtained in the Public Service, examine and investigate the procurement of contracts from 2016 to date,” he said.

Amaechi urged the panel to come up with suggestions and advice that would strengthen the operations of NPA and forestall such occurrences in the future, and any other matter that may be necessary for the course of the assignment.

Members of the panel include Suleiman Auwalu, Director, Maritime Services and Chairman of the team; Ben Omogo, Director, Organisation Design and Development, Co-Chairman.

Others include Hussani Adamu, Director, Procurement; Blessing Azorbo, Director, Legal Services; Mercy Ilori, Director, Transport Planning Coordination; Muhly-deen Awwal, Director, Human Resources Management; and Gabriel Fan, Deputy Director, Legal Services, who serves as the secretary of the committee.

Also, three employees of Human Resources Management are to serve as secretariat staff of the committee.

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Senate Goes After Agencies That Failed To Remit Into Federation Account

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The Senate has disclosed that no fewer than 60 federal government agencies failed to remit over N3 trillion generated revenue into the Federation Account from 2014 to 2020.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said that some of the affected parastatals have started crediting government coffers with the outstanding revenues they generated in the last six years.

The Senate Committee on Finance headed by Senator Olamilekan Adeola made the allegation in the course of investigating revenue remittances by MDAs between 2014-2020 and payment of one percent Stamp Duty on all contract awards by the MDAs within the same period.

Although the committee did not categorically mention the agencies involved but the media gathered that almost all the revenue-generating agencies of the government failed to remit generated funds into the coffers of the government.

The Minister of Finance, Mrs. Zainab Ahmed, Director-General of Budget Office, Mr. Ben Akabueze, Auditor General of the Federation, Mr. Idris Ahmed, and other heads of agencies appeared before the committee over the ongoing investigation into revenue remittances by MDAs between 2014 and 2020.

According to senator Adeola, calculations from the Fiscal Responsibility Commission revealed that about 60 Government Owned Enterprises (GOEs), may have about N3trillion of government revenue still unremitted in their coffers or already spent on frivolous expenditure contrary to the Constitution and Fiscal Responsibility Act, 2007.

He said: “The reconciliation done so far by the Office of Accountant General of the Federation is in excess of over a trillion naira going to like two, three trillion Naira or thereabouts and these monies are still hanging in the hands of these agencies and we have asked the office of Accountant General to get the money into the government coffers and we discovered that they are giving them a payment notice without necessarily following up this process.

“We have noticed that in the so-called 80 percent of operational surplus the agencies refer to, many of these agencies proved frivolous expenditure and they have taken advantage of the current system and refuse to remit this amount as at when due. We tried to audit the account of these agencies year in year out for the past five years and some of the revelations are scary. How do we explain that an agency of government that has a provision in the budget for Capital, Overhead, and Personel, in their audited account, they have gross revenue of N500 million and they are asking for N200 million?”.

He added that since the commencement of the investigations some agencies have complied with the committee’s directive with some of them paying back tens of millions of Naira with receipts to show from the Office of the Accountant General of the Federation.

“There is no gainsaying the fact that if these revenues are paid to the Consolidated Revenue Fund (CRF) for proper appropriation by the parliament during budget considerations, we are going to reduce dramatically the size of our deficit and hopefully, minimise our borrowing.

“We cannot continue to run government business as we used to do in this time when there are huge demands for the government to fund needed infrastructure and other socio-economic programs”.

Adeola stressed that the minister and other top officials were invited to get their full buy-in and also brief them on the revelations unearthed by the over four-week-long investigations with many agencies committing all manner of illegalities relating to the expenditure of government funds that should rightly be paid into the Consolidated Revenue Fund (CRF).

The minister, in her contribution, confirmed that in recent times a good number of agencies have been directed to pay back revenues collected on behalf of the federal government as required by the law.

Ahmed added that the executive arm of government is also scrutinising the application of the template of calculating and deducting operating surpluses by agencies of government to ensure that the right amount is paid to the government.

On his part, the DG, Budget Office, Akabueze clarified that the issue of operating surpluses does not apply to any government agencies that are fully funded by the government, stressing that all revenue generated by such agencies must be paid in full into the CRF as it is illegal to spend out of such money without appropriation by the National Assembly.

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COVID-19: CBN Has Disbursed N83B Loans to Healthcare Sector

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The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday, said the central bank had disbursed over N83.9 billion to pharmaceutical and healthcare practitioners in the country since the outbreak of the COVID-19 pandemic in the country.

Also, Lagos State Governor, Mr. Babajide Sanwo-Olu, has stressed the need for a slash in the cost of governance in the country, saying a lot more resources could be dedicated towards healthcare and critical infrastructure.

They both said this yesterday, at the premiere of ‘Unmasked’, a documentary on Nigeria’s response to the pandemic held in Lagos.

Emefiele, who was represented by the CBN’s Director of Corporate Communications, Osita Nwasinobi, explained: “Building a robust healthcare infrastructure was also vital from a security perspective, as some nations had imposed restrictions on the exports of vital medical drugs as well as the use of drug patents that could aid in containing the spread of the pandemic.

“As a result, we focused our interventions in the healthcare sector on three areas. Building the capacity of our healthcare institutions supporting the domestic manufacturing of drugs by businesses, and providing grants to researchers in the medical field, in order to encourage them to develop breakthrough innovations that would address health challenges faced by Nigerians.

“In this regard, we disbursed over N83.9 billion in loans to pharmaceutical companies and healthcare practitioners, which is supporting 26 pharmaceutical and 56 medical projects across the country. We were also able to mobilise key stakeholders in the Nigerian economy through the CACOVID alliance, which led to the provision of over N25 billion in relief materials to affected households, and the set-up of 39 isolation centres across the country. These measures helped to expand and strengthen the capacity of our healthcare institutions to respond to the COVID-19 pandemic.”

According to the CBN Governor, the banking sector regulator also initiated the Healthcare Sector Research and Development Intervention Grant Scheme, which was to aid research on solutions that could address diseases such as COVID-19, and other communicable/non-communicable diseases.

He said so far, five major healthcare-related research projects were being financed under the initiative.

Speaking further on the call to increase access to health insurance, Emefiele said: “One key aspect which we would have to address is improving access to healthcare for all Nigerians. A key factor that has impeded access to healthcare for Nigerians is the prevailing cost of healthcare services.

“According to a study by World Health Organisation (WHO), only four percent of Nigerians have access to health insurance. Besides food, healthcare expenses are a significant component of average Nigeria’s personal expenditure.

“Out of pocket expenses on healthcare amount to close to 76 percent of total healthcare expenditure. At such levels of health spending, individuals particularly those in rural communities may be denied access to healthcare services.

“Expanding the insurance net to capture the pool of Nigerians not covered by existing health insurance schemes, could help to reduce the high out of pocket expenses on healthcare services by Nigerians. It will also help to increase the pool of funds that could be invested in building our healthcare infrastructure and in improving the existing welfare package of our healthcare workers.”

“The private sector has a significant role to play in this regard given the decline in government revenues as occasioned by the drop in commodity prices. Leveraging innovative solutions that can provide insurance services at relatively cheap prices could significantly help to improve access to healthcare for a large proportion of Nigerians particularly those in our rural communities.”

According to Emefiele, the CBN remains committed to working with all stakeholders in improving access to finance and credit that would support the development of viable healthcare infrastructure in our country.

On his part, Sanwo-Olu said: “What are the lessons that we have learned with the Covid-19? Looking at all the things that Covid-19 has cost us, how are we preparing ourselves?

“The truth be told the structure of our governance system needs to change particularly the cost of governance. We need to speak up and ask ourselves are we ready to change.”

“When it gets to the election it is the same set of people that will come up and people don’t come out to vote and we end up having 20 percent out of 100 percent that will elect those that will govern. So, the change has to be about all of us. That is how the real change that will help us will come,” he added.

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