Economy
THE N22.7 trillion Ways and Means debt incurred by the Federal Government will be audited, Minister of Finance Wale Edun said yesterday.
Edun spoke at the ongoing Public Wealth Management Conference organised by the Ministry of Finance Incorporated (MoFI).
Coincidentally, the Senate also resolved yesterday to investigate the use of the N22.7 trillion the Muhammadu Buhari administration borrowed from the Central Bank through Ways and Means as well as other interventions by the apex bank such as the N10 trillion Anchors Borrowers Programme.
An ad-hoc committee constituted to carry out the assignment is also to find out how the N22.7 trillion okayed by the Senate in May 2023 rose to N30 trillion.
From 1999 to May 29, 2023, past governments accessed the Ways and Means (overdraft from the CBN) to meet emergency needs.
At the conference, Edun said: “There was an inherited amount, N22.7 trillion backlog. We are auditing it. It is like when I am ready to pay a loan at the bank, I ask for an audit before agreeing on the sum to pay.
“But apart from that, how do you close your ways and means gap? You get your revenue up and you get your expenditure down as much as possible.”
The minister also highlighted the importance of oil revenue and urged the Nigerian National Petroleum Company Limited (NNPCL) to increase production while cutting costs.
He added that efforts were being made to improve revenue collection from government-owned enterprises and enhance the efficiency of tax collection through digitisation and technology.
Edun said: “We have used technology, digitisation such that we have laid the foundation for a total revamp of Federal Government revenues and we expect the revenues to go up from what is due to government at the hands of other companies and enterprises will automatically now be deducted using digitisation.”
The minister also reiterated government’s plans to reform fiscal policies and tax systems to streamline processes, reduce taxes, and eliminate unnecessary levies and fees.
The plans include the introduction of an emergency intervention bill to rationalise taxes and improve revenue collection from both corporate sectors and individuals.
He said: “The fiscal policy is going to be revolutionised and announced very quickly through an emergency intervention bill. It is going to rationalise taxes and take more nuisance values away from the public sector. It is going to reduce the tax value you have on a handful of items; all the levies and fees particularly the ones that are directly controlled by the Federal Government will all be removed.
“On the revenue side, everything is being done to ensure that there are no leakages.”
On the expenditure side, he said that measures are being implemented to reduce inefficiencies, eliminate duplications and prevent leakages in public spending.
These, according to him, include addressing issues such as duty waivers, tax incentives, and contract expenditures to ensure that government funds are utilised effectively.
“On the expenses side, we are also implementing a robust expenditure framework that removes the leakages, removes double-counting, payment to people who are not supposed to be paid, whether it is from duty waiver or tax incentives or even expenditure of government on contract supplies, etc.”
At its plenary yesterday, the Senate expressed concern that Ways and Means had put inflationary pressures on the economy.
Its decision to raise an ad-hoc committee to investigate the disbursement and use of the N22.7 trillion followed its adoption of the report and recommendations of the Joint Senate Committee on Banking, Insurance and other Financial Institutions, Finance, National Planning, Agriculture and Appropriation on the state of the economy and falling rate of the Naira.
The recommendation was made by the committees and the President Tinubu’s economic team last week.
The report was presented by one of the co-chairs of the joint committees and Chairman, Senate Committee on National Planning Yahaya Abdullahi.
Chief Whip of the Senate, Ali Ndume, said details of the expenditure of N22.7 trillion were not presented to the Ninth National Assembly before the approval.
Ndume said: “I was not part of the plenary that gave the nod for Ways and Means but the detail of funds spent was not provided. This is illegal.”
Deputy Senate President Barau Jibrin, who was chairman of the Senate Committee on Appropriation during the Ninth Senate, corroborated Ndume’s assertion.
Barau said: “When the request was brought, it was due to an emergency. Because they told us it was urgent, we said we were going to pass it but they didn’t bring the details.”
Senator Ahmad Lawan, President of the Ninth Senate, however, expressed reservations about the move by the 10th Senate to investigate the Ways and Means advances.
Lawan said the ninth Senate okayed N22.7 trillion and N30 trillion.
Arguing that the probe would serve no purpose, the former Senate President said what is uppermost in the minds of Nigerians at the moment was how to put food on their table.
He said: “What the Ninth National Assembly approved was N22.7 trillion, in terms of Ways and Means and another N819 billion for infrastructure and others. It wasn’t N30 trillion. It was N22.7 trillion.
“If we had a Ways and Means that was N30 trillion, that means something happened. So, if the figure we have today is N30 trillion, then we must investigate it.
“If there were expenditures done wrongfully in contradiction of the provision of the 1999 Constitution, the National Assembly can look at the expenditures and if sanctions are needed for unlawful, wrong or unauthorised expenditures, the National Assembly can provide the sanctions.”
Mohammed Goje supported Lawan’s position. He argued that the Senate had the power to approve.
Senate President Godswill Akpabio, however, noted that the nation was experiencing economic challenges because of illegal things done by the previous administration.
“We are where we are today as a result of illegal things and I think it is necessary that details of Ways and Means should be provided,” Akpabio said.
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The Senate Joint Committee and Presidential Economic team’s recommendations report reads in part: “The government should prioritise liquidating the N30 trillion Ways and Means obligation of the Federal Government through a quicker resolution mechanism than the current securitisation arrangement over a period of 40 years.
“In addition, the CBN should put in place measures to ensure the repayment of various intervention programmes by the beneficiaries after a thorough evaluation of their performance. These will help reduce the money supply.
“Also, the ‘quasi-fiscal measures’ totalling N10 trillion of which the Anchor Borrowers programme is a major part should be further interrogated by the committee with a view to plugging loopholes in future development finance activities of the bank.”
Senate to Tinubu: Reduce Fed. Govt expenditures
The Senate has urged the Bola Tinubu-led administration to reduce “government expenditure to lower fiscal deficits and promote fiscal sustainability.
It also advised the government to “provide interventions in the area of food and transportation to alleviate the suffering of vulnerable Nigerians and mitigate the impact of economic challenges facing them.”
The Senate made the appeal during its consideration of the report Joint Committee on Foreign Exchange Management yesterday.
The upper arm of the National Assembly suggested that “exchange gains from naira depreciation should be used to wind down government deficits at all levels rather than expand the size of the budget.”
It lauded the Central Bank of Nigeria(CBN) for some of the measures it has so far put in place to address exchange rate volatility and improve liquidity in the FX markets.
But the Senate suggested that to ensure transparency and boost confidence in the market, the joint committee should further interrogate “the $2.4 billion Forex transactions adjudged invalid out of the outstanding $7 billion obligations” to identify culprits and sanction them.
It also wants the committee to query “the sudden revision of the rate calculation methodology by the FMDQ on January 29, 2024, and the resultant sharp increase in the NAFEM rate from N891/5 to N1,348.63.
The Senate argued that the review adversely impacted the value of dollar-denominated obligations.
“This step is necessary to safeguard investments, protect jobs and economic agents in Nigeria with foreign currency exposure.”
On Fiscal Discipline and Expenditure Reduction, the joint committee said that there is a need to “Improve fiscal discipline by reducing government expenditure to lower fiscal deficits and promote fiscal sustainability.”
“In this connection exchange gains from naira depreciation should be used to wind down government deficits at all levels rather than expand the size of the budget,” it said.
THE NATION
21st February, 2024.
C.E.
Tags: CBN Federal Goverment NNPCL Wale Edun
