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Tag: adeosun

  • Forex crisis: Reps query Adeosun, Udoma, others

    Sequel to the rising inflation and the free fall of the Naira against the United States Dollar, Minister of Finance, Mrs. Kemi Adeosun, and the Minister of Budget and National Planning, Senator Udoma Udo Udoma appeared before members of the House of Representatives on Monday for questioning.

    Adeosun and Udoma appeared before the House Joint Committees on Finance, Appropriation and Aid/Loans/Debt Management at the National Assembly in Abuja to defend projections in the 2017-2019 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTEF.

    The 2017 budget of N7.29tn, which is already before the National Assembly, was worked out by the government based purely on the projections contained in the MTEF.

    The budget, by the provisions of the Fiscal Responsibility Act, 2007, cannot be approved by the legislature until it has first debated and passed the MTEF.

    When the ministers appeared before the committees, lawmakers raised several issues, including the “clear and huge disparity” between the official rate of the naira and the street or parallel market value.

    For example, while the government’s pairing of the local currency against the USD for the 2017 budget is N305/USD, the street rate is “almost N500/USD.”

    Lawmakers also noted that while inflation had already hit “18 per cent,” the government projected that inflation would be 15 per cent in 2017.

    The Chairman of the committee, Hon. Babangida Ibrahim, said: “There is something that is fundamentally wrong with these projections and the huge gaps that we are seeing.

    “There are even differences in the MTEF document you submitted to us at the National Assembly and the 2017 budget, which Mr. President laid before the National Assembly.

    “There has to be a position where all of us can be on the same page in the efforts to rescue this economy out of recession.”

    In addition, members demanded details on the government’s plan to borrow N2.32tn to finance the deficit in the budget, including the repayment conditions.

    They also noted another “inconsistency” in the drop in revenues to be generated by the Nigeria Customs Service from N862bn in 2016 to N717bn this year when government said it was focusing more on non-oil revenue sources.

    Adeosun in her defence of the falling naira, blamed market speculators.

    She claimed that there was deliberate buying and stocking of dollars to cause panic, when in the real sense, the naira should not have crashed more than N305.

    She added that the factors responsible for the naira’s fate were “irrational and emotional” reactions, resulting in unnecessary hike.

    In her words: “There is nothing to justify what is happening; this difference between the official and the black market rates has no fundamentals to support it.

    “In reality, the naira should not be affected more than the N305,” the finance minister stated.

    She however expressed optimism that the exchange rate hike would crash soon.

    On his part, Udoma tried to douse tension and explained that the government projected that the inflation rate would be 15 per cent because the current 18 per cent rise was not realistic.

    When asked why the inflation rate was pegged at 15 per cent in the 2017 budget when the reality is 18 per cent, Udoma said: “Our target is 15 per cent because that is what we believe it will be.

    “The exchange rate is what is causing it now, but we will soon attain stability and inflation will be down naturally at the 15 per cent.”

    Udoma explained that during the year, the exchange rate would stabilise in the region projected by the government (N305), which would in turn cut down inflation and keep it at 15 per cent.

    However, the minister did not specify how exactly the government would stabilise the market aside from promising that everything was being done to achieve it.

    Udoma also defended the slash in Customs’ revenues from N862bn to N717bn.

    He explained that in 2016, the projection could not be met due to the unhealthy state of the economy.

    He informed the lawmakers that the government felt it was wise to cut down to N717bn, which was considered more realistic to generate in 2017.

    In his words: “We looked at the performance of the economy and we looked at what was realistic.

    “Even the World Bank constantly reviews its figures and projections on Nigeria.”

    Also speaking on the sidelines of the $29.96 billion load request by President Buhari, the Director-General of the Debt Management Office, Mr. Abraham Nwankwo, admitted that the government would indeed borrow N2.32tn to finance the deficit in the budget.

    Nwakwo said the loan, when approved and received would be spent judiciously. He said the modalities of spending will be “spelt out by the government in the budget.”

    He said the loan would be spread over a repayment scheme of up to 25 years with a moratorium of between 10 and 15 years.

    Recall however that both the lower and upper Assembly are yet to grant President Buhari’s request of the $29.96bn loan.

  • FG’s whistleblowing policy and the death of financial corruption in Nigeria – Ncheta

    By Simon Ncheta

    At Independence, Nigeria was projected as the nation to lead Africa out of its third world status, into a continent of pride, worthy of competing with the developed world on every aspect of human development index.

    Abubakar Tafawa Balewa, promised the rest of the continent and the world, that Nigeria “shall not fail for want of determination”.

    56 years down the line, Nigeria has recorded tremendous progress, and equally tremendous failure. Corruption has been seen as the bane of our democracy and development as a nation.

    For many years, financial corruption has held the nation from attaining the realities of its potential. According to Waziri Adio, the executive secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Nigeria made N70 trillion from oil alone in 15 years (1999-2014).

    He goes on to question the way such monies were spent and the mis-management that trailed the country’s administrations through those years.

    “I think if previous administrations had developed a culture for prudent management of resources, Nigeria ought to have over $100 billion saved in the excess crude account,” he said.

    How such monies were spent no longer remain a mystery as President Muhammadu Buhari’s anti-corruption war has revealed how government officials and their cronies channelled state funds into personal pockets.

    Ben Akabueze, director-general of the office, said that the federal government is projecting an infusion of N258.6 billion from recovered loot into the 2017 budget, showing a fraction how much loot recovery, the government did in 2016.

    On Wednesday, Kemi Adeosun, minister of finance, announced the federal government’s whistleblowing policy for loot recovery.

    “You can submit documentary evidence on the portal. You can also provide specific and fact-based information such as what occurred, amount involved, who was involved and dates of the occurrence on the portal,” she had said.

    “Confidentiality will be maintained to the fullest extent within the limitations of the law. If you choose not to disclose your identity, there will be no record of who you are. If you choose to disclose your identity, it will be fully protected.
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    ”If you whistleblow in public-spirit and in good faith, you will be protected. If you feel that you have been treated badly because of your report, you can file a formal complaint. If you have suffered harassment, intimidation or victimisation for sharing your concerns, restitution will be made for any loss suffered.”

    To cap it all Adeosun said the programme comes with an incentive and protection for whistle blowers. It ensures that whistle blowers can get as much five percent of loot, in case of losses recorded in the process.

    “Whistle blowers will be protected against sanctions, and in the event that somebody who is a whistle blower loses their job or is financially disadvantaged as a result of the information they have provided, we have a reward scheme, which would pay not more than five percent,” she adds.

    This goes on to show that the government is committed to catering for whistle blowers.

    What this policy would do much more than recovering loot, is to prevent looting. With everyone free to blow a whistle on financial mismanagement, every public official planning one form or looting or the other will be deterred from doing so, because anyone who knows about it can blow a whistle and get the official in the government’s net.

    Hence, much more than the recovery of loot, federal government’s whistleblowing programme may mean the death of financial theft in Nigeria.

     

  • CBN to eliminate official, black market exchange rate gap soon – Adeosun

    The Minister of Finance, Mrs. Kemi Adeosun has said the Central Bank of Nigeria, CBN is poised to eliminate the huge difference between the official and black market exchange rates against the dollar.

    According to Reuters, the naira is trading on the parallel market some 40 per cent lower than the official rate as low global crude prices have dried up vital oil revenues and pushed Africa’s largest economy into recession.

    The CBN scrapped a 16-month-old peg of 197 naira to the dollar in June, but it continues to trade in the official market, so that the naira remains far stronger against the dollar there than on the parallel market. The government has blamed that black market for damaging the already shaky economy.

    “The CBN is working on the elimination of arbitrage,” Adeosun told Reuters by text message, without saying how this would be done.

    Adeosun earlier told a conference that the central bank was working on removing the price difference.

    She said this had been in response to a question about manufacturers not getting incentives to produce given an arbitrage opportunity.

    The spokesperson for the CBN, Isaac Okorafor, said the bank was working towards “ensuring that the forex market operates as effectively as we would envisage.”

    He said the aim was to “ensure there is no black market,” but did not give details of how this would be achieved.

    The naira has traded around 305.5 naira to the dollar on the official interbank market since August, while it was quoted at 487 to the dollar on the parallel market on Monday.

    It is however not clear specifically when the disparity between the exchange rates will be fixed.

  • Adeosun, Emefiele back Senate’s proposed scrapping of BoI

    …as BoI kicks

    The Minister of Finance, Mrs. Kemi Adeosun and the Governor, Central Bank of Nigeria, CBN, Mr. Godwin Emefiele have thrown their weights behind calls in some quarters especially the National Assembly to scrap the Bank of Industry (BoI) to be replaced with a National Development Bank (NDB).

    However, in a swift reaction, the BoI kicked against the move. Speaking Monday at a public hearing organised by the Senate Committee on Banking, Insurance and Other Financial Institutions on the establishment of the NDB, the Acting Managing Director, BoI, Mr. Waheed Olagunju, said the Bol plays a distinct role which already encapsulated the role of the proposed NDB.

    A bill seeking to establish the NDB had passed second reading in the Senate on October 12.

    Titled: ‘A Bill for an Act to establish the National Development Bank, 2015’, and sponsored by Senator Ibrahim Gobir, it seeks to repeal the BoI, the Bank for Commerce and Industry Act and the National Economic Reconstruction Fund Act.

    The bill further seeks to bring the total assets of the organisations under one body to be called the National Development Bank.

    Olagunju stated that what was needed was more funding of the bank by the Federal Government so as to increase its support to the real sector rather than duplicate functions with the establishment of another bank with a similar purpose.

    In his words: “We are of the opinion that the BoI, as presently constituted, is fulfilling the mandate envisaged in the proposed legislation by supporting genuine entrepreneurs. Therefore, it should be left to continue its operations as it is. The merger envisaged in the proposed bill has already taken place.

    “The BoI should be provided with more capital to be able to further support the real sector instead of duplicating functions by creating new development finance institutions, bearing in mind the failure of similar DFIs in the past, such as the NBCI, NERFUND, People’s Bank, Community Banks, etc.”

    He added, “We advise that the National Assembly should support industrialisation by enacting legislation that will help create an enabling environment for business to thrive, such as an amendment to the Land Use Act, tax incentives for SMEs and establishment of industrial parks.

    “This will substantially address the demand challenges of finance for SMEs in Nigeria, as vagaries of the business environment have been making the sector unattractive to private and public lenders.”

    However, Adeosun, who was represented by a director in Ministry of Finance, Christopher Gabriel, said the ministry strongly supported the bill, adding that the proposal was in tandem with the economic reconstruction efforts of the Federal Government.