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AfDB Launches Strategy for Economic Governance in Africa to Foster Accountable Governments

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African Development Bank - Investors King

The African Development Bank on Friday launched its Strategy for Economic Governance in Africa (SEGA), aimed at fostering transparent and accountable governments and institutions to secure inclusive, sustainable development.

The strategy proposes bold reforms in the management of public finances to eliminate revenue ‘leakages’ and ensure an efficient, productive, and transparent use of scarce resources. The paper comes amid the ongoing Covid-19 pandemic, which has exposed African countries’ weak public financial management and service delivery, as well as vulnerability to exogenous shocks.

“This event comes at a crucial time as African countries look to recover from the crisis caused by the Covid-19 pandemic. It is difficult for Africa to take off without transparent and accountable governments and strong institutions capable of driving a prompt, sustainable and inclusive recovery and ensuring economic resilience,” said Vera Esperança dos Santos Daves, Angola’s Minister of Finance at the virtual launch of the strategy, attended by government ministers, and representatives of the private sector, academia and international institutions.

In a speech read on her behalf by  Secretary of State for Treasure and Finance, Dr. Ottoniel Santos, the minister described the Strategy as “a milestone.”

“We are very delighted that it will contribute to promoting public sector effectiveness at the national and subnational level, thus stimulating structural transformation in our throughout the continent, and ensuring that our people participate in public sector governance,” she said.

SEGA also proposes tougher anti-corruption measures in the public and private sectors. This includes the establishment of systems to monitor and hold governments accountable for the delivery of public service and the elimination of corrupt practices.

“The African Development Bank is itself uniquely positioned to implement this new strategy, building on its unparalleled knowledge and understanding of the African context, and also on the Bank’s credentials in the area of good governance,” said Swazi Tshabalala, the African Development Bank’s Acting Senior Vice President.

Tshabalala hopes that  governments will embrace the reforms recommended in SEGA “at this critical time the African economy is gearing itself to build back better and greener.”

“The quality of life of our citizens depends on it. The future of our continent depends on it,” she said.

The strategy document also outlines interventions to strengthen African governments’ domestic mobilization of resources, even as pandemic responses have increased debt levels and harmed economic productivity.

Better governance is expected to enable countries to strengthen macroeconomic stability, foster a business enabling environment, and improve the efficiency of public spending and investments, according to the strategy document. SEGA will cover the 2021-2025 period.

Abdoulaye Coulibaly, the Bank’s Director of Governance and Public Financial Management said the Strategy document refocuses the Bank’s fundamental priorities on the most effective areas for improving African economic governance.

“With SEGA, we are consolidating on our past successes and leveraging the lessons learned from our experience working on governance,” he said.

SEGA was developed through consultation with governments and non-state actors across Africa. It replaces the Bank’s Governance Strategic Framework and Action Plan (GAP-II), which covered the 2014-2020 period.

Approximately a fifth of the Bank’s loan portfolio covers governance projects, including macroeconomic and public financial management, sector governance, and enhancing the business climate.

In the last three years, the Bank has approved 80 governance projects totaling $7.85 billion.

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Economy

Finance Minister Edun Lauds Nigerians for Enduring Economic Reforms Amidst Hardships

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The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has commended Nigerians for enduring the hardships caused by the economic reforms of President Bola Tinubu.

Minister Edun, who spoke on Thursday during an interactive session with the Senate Committee on Finance at the National Assembly in Abuja, highlighted that these reforms have begun to yield positive results.

Edun explained that two critical reforms initiated by the Tinubu government are now at the stage of delivering results.

He added that these reforms will restore the fiscal viability of the country.

“The two critical reforms on the market-based price of Premium Motor Spirit (PMS) and foreign exchange are now at the stage of delivering results, which will, by extension, restore the viability of the nation’s economy through fiscal restoration.”

“These two pillars of the economic reforms, which are now taking positive shape, portend additional revenue for the government, recovery of NNPCL’s finances, and a strong foundation for growing the economy, attracting investment, and creating jobs.”

“I think we need to commend Nigerians for staying the course to this stage of realizing these benefits,” he stated.

The Chairman of the Committee, Senator Sani Musa, said that the session was important as it gave stakeholders the opportunity to deliberate on pressing issues.

He said, “Today, we gather to deliberate on pressing matters related to the sale of crude oil to domestic refineries in Nigeria in naira, its implications on the approved Medium-Term Expenditure Framework and Fiscal Strategy Paper for 2024-2026, and what we should expect for 2025-2027.”

The committee reaffirmed the need for accountability in the NNPC, stating, “Additionally, we will examine shortfalls in NNPCL revenue remittances, focusing on key areas such as foreign and domestic excess crude accounts, the signature bonus accounts, NNPCL cash call accounts, and any outstanding or remitted revenue linked to under-recoveries.”

“This meeting underscores our commitment to transparency, accountability, and responsible management of our national resources.”

Musa concluded that with relevant collaboration, solutions can be identified.

He stated, “I am confident that with the collaboration of the Ministry of Finance under the able leadership of the Coordinating Minister of the Economy, the Office of the Accountant General of the Federation, the Central Bank of Nigeria, the Revenue Mobilization and Fiscal Commission, and other critical stakeholders present here, we will identify solutions and ensure that due processes are upheld for the benefit of our economy and the Nigerian people.”

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President Tinubu Approves Concrete Redesign for Abuja-Kaduna Road Amid Contract Termination

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The Federal Government has announced plans to address the difficulties faced by road users on the Abuja-Kaduna-Zaria-Kano road with the redesign of the dual carriageway.

This announcement was made by the Minister of Works, David Umahi via a statement on Wednesday.

The Ministry revealed that the 127 kilometers project has been approved by President Bola Tinubu.

This development comes two days after the Ministry of Works announced the termination of its contract with Julius Berger for the Section I (Abuja-Kaduna) of the Abuja-Kaduna-Zaria-Kano Dual Carriageway project in FCT, Kaduna, and Kano States.

Investors King understands that the contract for the rehabilitation of the road was awarded to Messrs Julius Berger (Nig.) Plc on December 20, 2017.

The project, initially valued at N155.7 billion, with a 36-month completion period was further categorized into three sections.

However, only Section II (Kaduna-Zaria) has been completed and partially handed over.

Section III (Zaria-Kano) is partially finished while Section I remains in a severely deteriorated state.

A statement from the Ministry explained that the decision to terminate the contract with Berger was based on non-compliance with reviewed cost, scope, and terms, stoppage of work, and refusal to remobilise to site.

The ministry on Wednesday, November 6, confirmed that Section I has been redesigned and re-scoped.

The statement reads, “The President, His Excellency, Bola Ahmed Tinubu, GCFR has approved that the remaining 127 kilometres of the Rehabilitation of Abuja – Kaduna – Zaria – Kano Dual Carriageway, Section I (Abuja – Kaduna) be redesigned using continuously reinforced concrete pavement (CRCP) instead of the present asphaltic one.”  

“The contract, divided into three (3) sections, was awarded to Messrs Julius Berger (Nig.) PLC on 20th December 2017 at an initial sum of N155, 748,178,425.50 billion (one hundred and fifty-five billion, seven hundred and forty-eight million, one hundred and seventy-eight thousand, four hundred and twenty-five naira, fifty kobo) with a completion period of thirty-six (36) months.” 

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Economy

Tax Expert Warns Tinubu: VAT, PAYE Hikes Will Deepen Hardship for Nigerians

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Company Income Tax (CIT) - Investors King

Due to Nigeria’s economic situation, tax expert Adebisi Oderinde has urged President Bola Ahmed Tinubu to halt plans to increase the VAT and Pay-As-You-Earn (PAYE) tax rates.

Oderinde, who is also the CEO of AOC-Adebisi Oderinde & Co, made the statement during the inauguration of the company’s Head Office in the Kara area of Ogun State.

He said the country’s economic conditions are challenging and particularly unfavorable for SMEs and warned that implementing tax reform could destabilize many small businesses as inflation has already eroded purchasing power in Nigeria.

With over 28 years of experience as a tax consultant, Oderinde noted that new tax reforms would likely worsen hardship across the country.

“My advice is to make hay while the sun shines, as the journey of a thousand miles begins with a single step, and slow and steady wins the race. The country is hard! As a tax practitioner, I continue to pray for our President, but he must heed the advice of elders, especially when it concerns tax reform,” he said.

“This is not the right time to reform any tax, nor to adjust rates. Nigerians’ purchasing power is very low. While some may think of VAT reform as beneficial, it would have a negative impact, especially on Lagos State. One part of the reform aims to cancel the consumption tax, which would hit Lagos hard, as the state earns more from consumption tax than any other state in the federation,” he added.

Oderinde further advised northern Nigeria not to support the proposed policy, warning it could disproportionately affect the region.

“They also want to increase PAYE, and recent data from the NBS in 2023 shows that the total IGR from the 36 states plus the FCT is about N2.4tn, with PAYE accounting for about 63%. If PAYE is raised, it will impact many states significantly. Instead of focusing on VAT, the northern states should consider that an increase in PAYE would affect them even more than VAT,” he explained.

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