FG Pumps N350b To Revive Dying Economy
The Nation - Nigerians got some good news yesterday – the Federal Government is pumping N350 billion into the economy.
The aim, according to Finance Minister Kemi Adeosun, is to:
- reflate the economy and make more cash available in the system;
- pay contractors who will bring back workers who have been retrenched; and
- revive capital projects.
The cash, which is based on the soon-to-be-passed 2016 Budget, will be released in the next few months.
Mrs Adeosun broke the news to State House correspondents at the end of the two-day National Economic Council (NEC) Retreat at the Presidential Villa, Abuja.
With her were Zamfara State Governor Abdulaziz Yari; Anambra State Governor Willy Obiano and Minister of Budget and National Planning Udoma Udo Udoma.
The retreat, organised for the members of the National Economic Council (NEC) and other top Federal Government officials, according to her, deliberated extensively on the drop in government revenue and how it is affecting the state governments, which are finding it hard to pay salaries.
She said: “From the Federal Ministry of Finance in anticipation of the approval of the budget, we have virtually lined up about N350 billion which we will be pumped into the economy in the forthcoming months.
“We explained our rationale and the processes that we have put in place, safeguards to ensure that this money actually achieves the desired objective, which is to stimulate the economy.
“We are already discussing with some of the contractors who will be paid these monies and the objectives from the overall criteria is how many Nigerians would be re-engaged.”
She added: “We are specifically looking at contractors who have laid off staff and how many Nigerians are you going to put back to work as a result of this money that we are planning to release and we believe that this would bring significant economic activity.”
The N350bn will be pumped into the economy in the next one quarter.
”Our priority is engaging Nigerians and resuming our capital projects.”
On revenue generation, Mrs. Adeosun said: “There is need to have a business and commercial approach to revenue generation.
”There is need for us to look at data management because nobody can succeed in revenue generation without the data.”
Customs men also got a piece of cherry news. They will get a better pay.
“We look at the Customs and found out that it has one of the lowest salaries at least from their peer group. That is a problem. Here you have a custom officer being paid N50, 000 monthly and you task him to collect duty of nearly N2 million. So we are working on better remuneration for the Customs,” Mrs Adeosun said.
She went on: “The other issue is the equipment being used by the agency. Their ability to scan containers is very important. Classifications of containers are faulty now because of the kind of equipment they use. Ability to scan a container and know what is in it is limited.”
State government also got some relief. Their Universal Basic Education Commission (UBEC) counterpart funding is to be reduced so that they can access about N58 billion.
Said the minister: “We also discussed UBEC and the need to get legislative approval to change the need for counterpart funding on the part of state governments, which we feel is putting them further into debt, to reduce that requirement from a temporary period to 10 per cent from the current 50 per cent and that will release an estimated N58 billion that is currently un-accessed.”
“It was discussed that with that money we could possibly address around 1,000 of the worst classrooms in each of the 36 states and rehabilitate them and, of course, this would also create jobs and economic activity.”
On the drop in revenue, Mrs. Adeosun said the retreat resolved that there was a need to bring in more cost efficiency in their operations.
“In particular to look at the setting up of the efficiency unit within the state governments, to rationalise expenditure and, of course, to increase IGR. To that end, there was a need to generate data because data is the basis of any revenue collecting efforts,” she added.
According to her, the Federal and state Inland revenue services are to collaborate and do joint audits to invest in revenue, relevant technology and efforts to improve collection.
She said there was a need to develop incentives for both federal and state revenue generating agencies to ensure an alignment of interest.
“There is a focus at state level on property and consumption taxes to help in improving revenue in a fair manner. Tax payer education must be intensified and to expand the tax base and ensure that there is a buy-in in the revenue collection agencies from the populace.”
Governors, Mrs Adeosun said, were encouraged where possible to rationalise number of commissioners and political appointees and, in addition, cost control measures to be identified and implemented on an on-going basis.
There was sharing of best practices from a number of states that could be applied to other states.
Highlights of decisions at the retreat
Other highlights of the NEC Retreat, according to a communique issued at the end of the session, included agreement reached for concerted and consistent efforts to diversify revenue sources.
“Expand compliance on VAT, adopting a gradual plan for rate increase. Increase expenditure through borrowing, which should be invested in infrastructure.
“Federal and state governments to focus on fiscal responsibility as a critical element in macro-economic balance. Increase investment in infrastructure through public private partnership (PPP). Develop financial inclusion strategies to cater for the poor and vulnerable population. Maintain a minimum level of capital expenditure of 30% in the budget.
On agriculture, the retreat resolved that the Federal Government should re-position the Bank of Agriculture to enhance its capacity to finance agriculture.
“Funding for agricultural sector is considered critical and sources of intervention funding from the Central Bank of Nigeria should be considered. A single digit interest rate for agricultural loans should be considered while duties and taxes for agricultural products and equipment should be waived.
“Develop strategic partnerships between Federal and state governments. Each state should make specific commitments to crops in which it has comparative advantage and request Federal Government intervention.
It was also resolved that national targets for self-sufficiency should be set for identified crops, which should be monitored including tomato paste – 2016, rice – 2018, and wheat – 2019.
“The Federal and State governments should roll out agricultural extension services nationwide. Commodity Exchanges should be established for price regulation and avoidance of losses due to lack of markets. The Abuja Commodity Exchange should be revitalised.
“The National Agricultural Land Development Authority (NALDA) should be re-established. The Federal Government should develop an Agriculture Implementation plan whereby state governments are encouraged to identify at least two crops in which they have comparative advantage
“States should open up rural/feeder roads to facilitate transportation of agricultural produce to be supported by the Federal Government
“The Federal and state governments should establish minimum price guarantee for farm produce.
“The Federal Government should provide immediate funding to upscale efforts of Agricultural Institutes of Research and Development across Nigeria.”
The retreat also resolved that state governments should also be encouraged to fund research and development in agriculture through technical colleges, universities and research institutions.
For solid minerals, the retreat resolved that the Ministry of Solid Minerals Development should complete and present the solid minerals development roadmap.
“This framework should address issues of illegal miner, licences, taxes and royalties by 31st March 2016. Federal Government to engage state government on the roadmap and agree any amendment that may be required by 30th June 2016
“Initiate relevant legislative changes that maybe necessitated by the agreed roadmap by 31stJuly 2016. Conclude the revalidation/recertification of all mining leases by 30th September 2016
“Agree with states and local government on respective responsibilities for developing feeder roads and other critical infrastructure for solid minerals development
“Federal Government and states to set deadlines to achieve self-sufficiency in bitumen/asphalt and tiles (to discourage/stop importation)
“Make and communicate final decisions on operationalisation of Ajaokuta Steel Plant by 30th June 2016. Establishment of joint committee to address issues of data on quantity and quality of minerals exploited and exported
Setting up of mining cadastral zonal offices for proximity to states for the purpose of issuing licenses and easy monitoring by states was also resolved by the retreat.
“Discourage use of wood for cooking by promoting use of coal briquettes. Guarantee access to finance solid minerals development via intervention funds and private sector capital.
“Block revenue leakages in the sector through effective monitoring of activities in the mining sector. Organise artisanal/small-scale miners as a mechanism for reducing illegal mining and Establish Mines Surveillance Taskforce by September 2016
On Investment, industrialisation and enabling monetary policies, it was resolved that the Ministry of Industry, Trade & Investment (MITI) to develop a matrix of actions to be taken by Federal and State Governments towards achieving the targeted improvements in Ease of Doing Business ranking by 30th April 2016.
“Present an incentive scheme for states taking actions towards improvement of the investment climate in their states, including grants, by 30th September 2016
“Forge strong links between the Nigeria Investment Promotion Commission (NIPC) and the State Investment Promotion Agencies. States to collaborate more actively on regional basis on investments and industrialization.
“The Federal Government should work with the states and other stakeholders to create an enabling environment for trade and investment through the implementation of the Nigerian Industrial Revolution Plan (NIRP) to encourage industrialisation.
“Make environment conducive for the Micro, Small & Medium Enterprises to create jobs for the unemployed and undertake deliberate policies to create access to funds.”
State and Federal governments have also been urged to emphasise the patronage of “Made in Nigeria” products.
“Import competition” rather than “import substitution” should be emphasised.
Governors are to set up task forces to monitor implementation of trade/ investment policies and strengthen planning institutions by linking federal and sub-national planning; in this regard, a monthly meeting between the Minister of Budget & National Planning and State Commissioners for planning will be institutionalised.
States are also to set up one-stop shop for investors where they do not exist to attract investment and improve on IGR.
“Promote regional cooperation on investment and industrialisation. Implement institutional and structural reforms as a way of improving the efficacy of monetary policy, including greater consultation with the National Economic Council.
It also harped on the need for predictability and consistency of the Central Bank of Nigeria’s communication to key stakeholders to manage expectations.
“The Central Bank of Nigeria should carry the states along in some of their reforms in areas of SMEs and agricultural funding initiatives. Long-term development goals should anchor policy decisions
“Effective regulation and supervision to improve confidence in the soundness and stability of the banking system.
For infrastructure and services, the retreat resolved development of infrastructure delivery plan, considering current financial capabilities driven principally by the goal of improvement of the quality of life for the populace
“Develop financing model for infrastructure projects. Integrate training and job creation components in infrastructure projects. Implement empowerment and entrepreneurship policies to foster inclusive growth.”
The Federal and State Governments are also to work collaboratively to ensure sustainability of the school feeding and other social protection programmes.
“Cooperation from the States’ Ministries of Education and State Universal Basic Education Board (SUBEBs) for the Teacher Corp programme.
“Provide logistics support on the proposed upgrade of 75 existing National Directorate of Employment (NDE) facilities (across the various states) to Empowerment Centres
“Cooperation and coordination with the states on their specific job creation efforts. State government support on identified needs such as infrastructure and/or space for innovation hubs.
“State government support for artisan training, scoping and support for existing artisan cultures, use of existing training facilities.
“Institutionalise a single register as a platform for targeting the authentic poorest and vulnerable for safety net programmes; for government, donor agency, organisations or individuals.
“Creating a delivery mechanism that ensures efficient, consistent timely and direct payments in the remotest parts of the country. Boost productivity and financial inclusion for the poorest and most vulnerable.”
The retreat raised two committees: The Implementation Steering Committee is headed by
Vice President Yemi Osinbajo, who is the chairman of NEC.
Other members of the committee are Abdulaziz Y. Abubakar, Chairman, Nigeria Governors Forum and Governor of Zamfara State, Adams Oshiomhole, Governor of Edo State, Abdulfatah Ahmed,
Governor of Kwara State, Rauf Aregbesola, Governor of Osun State, David Umahi, Governor of Ebonyi State.
Others are Badaru Abubakar, Governor of Jigawa State, Mohammed Abubakar, Governor of Bauchi State, Udoma Udo Udoma, Minister of Budget and National Planning, Kemi Adeosun, Minister of Finance, Okechukwu Enelama, Minister of Industry, Trade and Investment, Audu Ogbe, Minister of Agriculture, Kayode Fayemi, Minister of Solid Minerals, Babatunde Fashola, Minister of Works, Power and Housing, and Nana F Mede, Permanent Secretary, Ministry of Budget and National Planning, who will be secretary.
The Implementation Monitoring Committee chaired by Zainab S. Ahmed, Minister of State, Budget and National Planning. Members are Mrs. Yosola Akinbi, Senior Technical Adviser to the Vice President on the National Economic Council, Mr. L.O.T. Shittu, DG, Nigeria Governors Forum, Mr. David Olofu, Commissioner for Finance and Planning, Benue State, Mohammed Kauji, Commissioner for Finance and Economic Planning, Borno State, E.A. Onwiodokif, Commissioner for Economic Planning, Akwa Ibom State, Mrs. Aisha M. Bello, Commissioner for Budget and Planning, Kano State Mrs. Aderenle Adesina, Commissioner for Budget and Planning, Ogun State.
Others are Mark Okoye, Special Adviser, Economic Planning and Budget, Anambra State, Mr. Tunde Lawal, Director, Macroeconomic Analysis Department, Fed. Min. BNP, Kayode Obasa, Director, Economic Growth, FMBNP and A.B. Saadu, Director, Special Duties.
The Nation - Nigerians got some good news yesterday – the Federal Government is pumping N350 billion into the economy.
The aim, according to Finance Minister Kemi Adeosun, is to:
- reflate the economy and make more cash available in the system;
- pay contractors who will bring back workers who have been retrenched; and
- revive capital projects.
The cash, which is based on the soon-to-be-passed 2016 Budget, will be released in the next few months.
Mrs Adeosun broke the news to State House correspondents at the end of the two-day National Economic Council (NEC) Retreat at the Presidential Villa, Abuja.
With her were Zamfara State Governor Abdulaziz Yari; Anambra State Governor Willy Obiano and Minister of Budget and National Planning Udoma Udo Udoma.
The retreat, organised for the members of the National Economic Council (NEC) and other top Federal Government officials, according to her, deliberated extensively on the drop in government revenue and how it is affecting the state governments, which are finding it hard to pay salaries.
She said: “From the Federal Ministry of Finance in anticipation of the approval of the budget, we have virtually lined up about N350 billion which we will be pumped into the economy in the forthcoming months.
“We explained our rationale and the processes that we have put in place, safeguards to ensure that this money actually achieves the desired objective, which is to stimulate the economy.
“We are already discussing with some of the contractors who will be paid these monies and the objectives from the overall criteria is how many Nigerians would be re-engaged.”
She added: “We are specifically looking at contractors who have laid off staff and how many Nigerians are you going to put back to work as a result of this money that we are planning to release and we believe that this would bring significant economic activity.”
The N350bn will be pumped into the economy in the next one quarter.
”Our priority is engaging Nigerians and resuming our capital projects.”
On revenue generation, Mrs. Adeosun said: “There is need to have a business and commercial approach to revenue generation.
”There is need for us to look at data management because nobody can succeed in revenue generation without the data.”
Customs men also got a piece of cherry news. They will get a better pay.
“We look at the Customs and found out that it has one of the lowest salaries at least from their peer group. That is a problem. Here you have a custom officer being paid N50, 000 monthly and you task him to collect duty of nearly N2 million. So we are working on better remuneration for the Customs,” Mrs Adeosun said.
She went on: “The other issue is the equipment being used by the agency. Their ability to scan containers is very important. Classifications of containers are faulty now because of the kind of equipment they use. Ability to scan a container and know what is in it is limited.”
State government also got some relief. Their Universal Basic Education Commission (UBEC) counterpart funding is to be reduced so that they can access about N58 billion.
Said the minister: “We also discussed UBEC and the need to get legislative approval to change the need for counterpart funding on the part of state governments, which we feel is putting them further into debt, to reduce that requirement from a temporary period to 10 per cent from the current 50 per cent and that will release an estimated N58 billion that is currently un-accessed.”
“It was discussed that with that money we could possibly address around 1,000 of the worst classrooms in each of the 36 states and rehabilitate them and, of course, this would also create jobs and economic activity.”
On the drop in revenue, Mrs. Adeosun said the retreat resolved that there was a need to bring in more cost efficiency in their operations.
“In particular to look at the setting up of the efficiency unit within the state governments, to rationalise expenditure and, of course, to increase IGR. To that end, there was a need to generate data because data is the basis of any revenue collecting efforts,” she added.
According to her, the Federal and state Inland revenue services are to collaborate and do joint audits to invest in revenue, relevant technology and efforts to improve collection.
She said there was a need to develop incentives for both federal and state revenue generating agencies to ensure an alignment of interest.
“There is a focus at state level on property and consumption taxes to help in improving revenue in a fair manner. Tax payer education must be intensified and to expand the tax base and ensure that there is a buy-in in the revenue collection agencies from the populace.”
Governors, Mrs Adeosun said, were encouraged where possible to rationalise number of commissioners and political appointees and, in addition, cost control measures to be identified and implemented on an on-going basis.
There was sharing of best practices from a number of states that could be applied to other states.
Highlights of decisions at the retreat
Other highlights of the NEC Retreat, according to a communique issued at the end of the session, included agreement reached for concerted and consistent efforts to diversify revenue sources.
“Expand compliance on VAT, adopting a gradual plan for rate increase. Increase expenditure through borrowing, which should be invested in infrastructure.
“Federal and state governments to focus on fiscal responsibility as a critical element in macro-economic balance. Increase investment in infrastructure through public private partnership (PPP). Develop financial inclusion strategies to cater for the poor and vulnerable population. Maintain a minimum level of capital expenditure of 30% in the budget.
On agriculture, the retreat resolved that the Federal Government should re-position the Bank of Agriculture to enhance its capacity to finance agriculture.
“Funding for agricultural sector is considered critical and sources of intervention funding from the Central Bank of Nigeria should be considered. A single digit interest rate for agricultural loans should be considered while duties and taxes for agricultural products and equipment should be waived.
“Develop strategic partnerships between Federal and state governments. Each state should make specific commitments to crops in which it has comparative advantage and request Federal Government intervention.
It was also resolved that national targets for self-sufficiency should be set for identified crops, which should be monitored including tomato paste – 2016, rice – 2018, and wheat – 2019.
“The Federal and State governments should roll out agricultural extension services nationwide. Commodity Exchanges should be established for price regulation and avoidance of losses due to lack of markets. The Abuja Commodity Exchange should be revitalised.
“The National Agricultural Land Development Authority (NALDA) should be re-established. The Federal Government should develop an Agriculture Implementation plan whereby state governments are encouraged to identify at least two crops in which they have comparative advantage
“States should open up rural/feeder roads to facilitate transportation of agricultural produce to be supported by the Federal Government
“The Federal and state governments should establish minimum price guarantee for farm produce.
“The Federal Government should provide immediate funding to upscale efforts of Agricultural Institutes of Research and Development across Nigeria.”
The retreat also resolved that state governments should also be encouraged to fund research and development in agriculture through technical colleges, universities and research institutions.
For solid minerals, the retreat resolved that the Ministry of Solid Minerals Development should complete and present the solid minerals development roadmap.
“This framework should address issues of illegal miner, licences, taxes and royalties by 31st March 2016. Federal Government to engage state government on the roadmap and agree any amendment that may be required by 30th June 2016
“Initiate relevant legislative changes that maybe necessitated by the agreed roadmap by 31stJuly 2016. Conclude the revalidation/recertification of all mining leases by 30th September 2016
“Agree with states and local government on respective responsibilities for developing feeder roads and other critical infrastructure for solid minerals development
“Federal Government and states to set deadlines to achieve self-sufficiency in bitumen/asphalt and tiles (to discourage/stop importation)
“Make and communicate final decisions on operationalisation of Ajaokuta Steel Plant by 30th June 2016. Establishment of joint committee to address issues of data on quantity and quality of minerals exploited and exported
Setting up of mining cadastral zonal offices for proximity to states for the purpose of issuing licenses and easy monitoring by states was also resolved by the retreat.
“Discourage use of wood for cooking by promoting use of coal briquettes. Guarantee access to finance solid minerals development via intervention funds and private sector capital.
“Block revenue leakages in the sector through effective monitoring of activities in the mining sector. Organise artisanal/small-scale miners as a mechanism for reducing illegal mining and Establish Mines Surveillance Taskforce by September 2016
On Investment, industrialisation and enabling monetary policies, it was resolved that the Ministry of Industry, Trade & Investment (MITI) to develop a matrix of actions to be taken by Federal and State Governments towards achieving the targeted improvements in Ease of Doing Business ranking by 30th April 2016.
“Present an incentive scheme for states taking actions towards improvement of the investment climate in their states, including grants, by 30th September 2016
“Forge strong links between the Nigeria Investment Promotion Commission (NIPC) and the State Investment Promotion Agencies. States to collaborate more actively on regional basis on investments and industrialization.
“The Federal Government should work with the states and other stakeholders to create an enabling environment for trade and investment through the implementation of the Nigerian Industrial Revolution Plan (NIRP) to encourage industrialisation.
“Make environment conducive for the Micro, Small & Medium Enterprises to create jobs for the unemployed and undertake deliberate policies to create access to funds.”
State and Federal governments have also been urged to emphasise the patronage of “Made in Nigeria” products.
“Import competition” rather than “import substitution” should be emphasised.
Governors are to set up task forces to monitor implementation of trade/ investment policies and strengthen planning institutions by linking federal and sub-national planning; in this regard, a monthly meeting between the Minister of Budget & National Planning and State Commissioners for planning will be institutionalised.
States are also to set up one-stop shop for investors where they do not exist to attract investment and improve on IGR.
“Promote regional cooperation on investment and industrialisation. Implement institutional and structural reforms as a way of improving the efficacy of monetary policy, including greater consultation with the National Economic Council.
It also harped on the need for predictability and consistency of the Central Bank of Nigeria’s communication to key stakeholders to manage expectations.
“The Central Bank of Nigeria should carry the states along in some of their reforms in areas of SMEs and agricultural funding initiatives. Long-term development goals should anchor policy decisions
“Effective regulation and supervision to improve confidence in the soundness and stability of the banking system.
For infrastructure and services, the retreat resolved development of infrastructure delivery plan, considering current financial capabilities driven principally by the goal of improvement of the quality of life for the populace
“Develop financing model for infrastructure projects. Integrate training and job creation components in infrastructure projects. Implement empowerment and entrepreneurship policies to foster inclusive growth.”
The Federal and State Governments are also to work collaboratively to ensure sustainability of the school feeding and other social protection programmes.
“Cooperation from the States’ Ministries of Education and State Universal Basic Education Board (SUBEBs) for the Teacher Corp programme.
“Provide logistics support on the proposed upgrade of 75 existing National Directorate of Employment (NDE) facilities (across the various states) to Empowerment Centres
“Cooperation and coordination with the states on their specific job creation efforts. State government support on identified needs such as infrastructure and/or space for innovation hubs.
“State government support for artisan training, scoping and support for existing artisan cultures, use of existing training facilities.
“Institutionalise a single register as a platform for targeting the authentic poorest and vulnerable for safety net programmes; for government, donor agency, organisations or individuals.
“Creating a delivery mechanism that ensures efficient, consistent timely and direct payments in the remotest parts of the country. Boost productivity and financial inclusion for the poorest and most vulnerable.”
The retreat raised two committees: The Implementation Steering Committee is headed by
Vice President Yemi Osinbajo, who is the chairman of NEC.
Other members of the committee are Abdulaziz Y. Abubakar, Chairman, Nigeria Governors Forum and Governor of Zamfara State, Adams Oshiomhole, Governor of Edo State, Abdulfatah Ahmed,
Governor of Kwara State, Rauf Aregbesola, Governor of Osun State, David Umahi, Governor of Ebonyi State.
Others are Badaru Abubakar, Governor of Jigawa State, Mohammed Abubakar, Governor of Bauchi State, Udoma Udo Udoma, Minister of Budget and National Planning, Kemi Adeosun, Minister of Finance, Okechukwu Enelama, Minister of Industry, Trade and Investment, Audu Ogbe, Minister of Agriculture, Kayode Fayemi, Minister of Solid Minerals, Babatunde Fashola, Minister of Works, Power and Housing, and Nana F Mede, Permanent Secretary, Ministry of Budget and National Planning, who will be secretary.
The Implementation Monitoring Committee chaired by Zainab S. Ahmed, Minister of State, Budget and National Planning. Members are Mrs. Yosola Akinbi, Senior Technical Adviser to the Vice President on the National Economic Council, Mr. L.O.T. Shittu, DG, Nigeria Governors Forum, Mr. David Olofu, Commissioner for Finance and Planning, Benue State, Mohammed Kauji, Commissioner for Finance and Economic Planning, Borno State, E.A. Onwiodokif, Commissioner for Economic Planning, Akwa Ibom State, Mrs. Aisha M. Bello, Commissioner for Budget and Planning, Kano State Mrs. Aderenle Adesina, Commissioner for Budget and Planning, Ogun State.
Others are Mark Okoye, Special Adviser, Economic Planning and Budget, Anambra State, Mr. Tunde Lawal, Director, Macroeconomic Analysis Department, Fed. Min. BNP, Kayode Obasa, Director, Economic Growth, FMBNP and A.B. Saadu, Director, Special Duties.
