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Tag: Finance Minister

  • Minister inaugurates FIRS board, announces date of commencement of new VAT regime

    Minister inaugurates FIRS board, announces date of commencement of new VAT regime

    Mrs Zainab Ahmed, the Minister of Finance, Budget and National Planning said the implementation of the new regime of 7.5 per cent Value Added Tax (VAT) will take effect from Feb. 1.

    Ahmed said this during the inauguration of the Chairman and Board members of the Federal Inland Revenue Service (FIRS) in Abuja on Thursday.

    “We planned that going forward, the annual budget will always be accompanied by Finance Bills to enable the realisation of revenue projections.

    “Future Finance Bills will therefore, provide us with additional opportunities to incrementally improve the fiscal policy and regulatory and legal environment.

    “This is in order to further strengthen our domestic capital market, and ultimately ensure sustained and inclusive growth and development,” she said.

    The minister recalled that the Finance Act had also taken care of essential palliatives to support Micro, Small and Medium Enterprises (MSMEs) and mitigate the impact of VAT rate increase on the most vulnerable businesses, communities and citizens in the economy.

    While inaugurating the board, the minister urged the new board to ensure steadfastness of the service in meeting non-oil revenue targets to accelerate the nation’s development.

    Ahmed said the board was saddled with various responsibilities, including the supervision of the FIRS.

    The FIRS Executive Chairman, Mr Muhammad Nami, said the new board had dedicated itself to the task at hand as the nation was looking up to the service, to provide a leeway out of the present economic crunch.

    “As a tax administrator and custodian of the Nigerian tax system, we have the responsibility to the nation to implement all tax policies and laws in a manner that would ensure optimal benefits to the nation.”

    Nami said FIRS had a duty to strengthen, withstand and overcome the challenges that was ahead of it.

    He pledged to rebuild FIRS institutional framework, robust collaboration with stakeholders, build a customer taxpayer centric institution and data centric institution.

    He also said the board intended to achieve this through building staff capacity for service delivery and close all lien cases in order to build new enforcement strategies.

    Members of the board are Mr Muhammad Nami, the Executive Chairman of the FIRS, Mr James Ayuba (North-Central), and Mr Ado Danjuma (North-West).

    Others are Mr Adam Mohammed (North-East), Mr Ikeme Osakwe (South-East), Mr Adewale Ogunyomade (South-West) and Mr Ehile Aibangbee (South-South).

    Also inaugurated were members of boards of Ministries, Departments and Agencies (MDAs) of the Federal Government.

    They are Ladidi Mohammed, Attorney-General of the Federation Office and Mr Folashodun Shonubi, Central Bank of Nigeria (CBN).

    The membership also includes Hajiya Fatima Hayatu (Ministry of Finance), Mr Samuel Maagebe (Revenue Mobilisation Allocation and Fiscal Commission), and Mr Umar Ajiya (Nigerian National Petroleum Corporation).

    Others include DCG Mairo Isah of the Nigeria Customs Servic (NCS) and Mr Garba Abubakar, Registrar-General of the Corporate Affairs Commission (CAC)

  • How Dangote Refinery will help Nigeria save $11bn upon completion – Finance Minister

    How Dangote Refinery will help Nigeria save $11bn upon completion – Finance Minister

    Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has said Dangote Petroleum Refinery will save the nation $11 billion.

    The money would have been used for importation of petroleum products.

    The minister noted that the refinery will also encourage other investors to better understand the need to invest in the economy.

    Mrs Ahmed spoke on Sunday in Lagos during a tour of the refinery.

    The minister said the investment would be an engine to the economy with thousands of specialisations created and deployed into the economy.

    She said: “The potentials are endless and the foresight amazing. No doubt, once it is commissioned, lots of jobs will be created, including entrepreneurs.

    “As a government, we will leverage on the strength of the private sector to grow the economy. It is heart-warming to note that in no distant time we will transit to an exporting country, saving huge foreign exchange in this refinery in the excess of $11 billion.”

    The minister pledged government’s readiness to support the refinery to succeed, just like other companies in the oil and gas sector.

    Mrs Ahmed hailed the group for its enhanced Corporate Social Responsibilities (CSR) in vital areas, such as hospitals, schools, scholarships, overseas and local trainings.

    She stressed that it is the only way to protect the huge investment as the group’s host community will own the projects and provide a safe environment for them to operate.

    President of Dangote Group, Alhaji Aliko Dangote said though the companies initially faced setbacks in price variation and the general poor infrastructure in the country, they remained determined to succeed and deliver the nation from continued importation.

    The foremost industrialist said Dangote Group would not only save the nation $11 billion in yearly foreign exchange but would also move from a $4 billion revenue company to $30 billion yearly revenue.

    He also said the group would be positioned for more investments in other sectors of the economy to make the nation self-sufficient in skills, competencies and products.

    Dangote said: “We will look at other sectors of the economy, apart from agriculture, where we have excelled in creating value. Our desire is to transform Nigeria into an export-based economy. In the next two years, we have a projection to export cement in excess of $500 million annually. We are also looking at venturing into the construction sector as we have invested a lot in that sector to build the complex.”

    Dangote Group’s Executive Director, Capital Projects and Portfolio Development, Edwin Devakumar said the refinery is flexible and set to produce Euro V products quality, including crude from other African countries, Middle East and the United States light oil.

  • Budget 2020: New minimum wage, personnel costs to gulp N4.88trn – Finance Minister

    Budget 2020: New minimum wage, personnel costs to gulp N4.88trn – Finance Minister

    By Emman Ovuakporie
    The Minister of Finance, Zainab Ahmed on Wednesday revealed plans by the Federal Government to expend N4.88 trillion for payment of the new national minimum wage and other personnel costs in the 2020 fiscal year.
    Ahmed who disclosed this during the National budget public hearing on the 2020 budget estimates at the joint session held by the Senate and House of Representatives, told lawmakers of the present administration’s projected investment of N10.33 trillion into Government Owned Enterprises (GOEs/Bilateral/Multilateral project tied loans/expenditures.
    For the proposed budget deficit for 2020 was pegged at N2.175 trillion (1.52% of the GDP), is expected to be funded mainly by borrowing of N1.594 trillion, comprising of N744.99 billion domestic sources and N850 billion foreign sources (more concessionary financing against commercial financing arrangement.)
    On debt servicing, Federal Government proposed the sum of N2.5 trillion representing 23.74% of target expenditure for the incoming fiscal year and N296 billion for the retirement of maturing bond to local contractors, representing an increase of 169.09% from N110 billion for 2019.
    The minister affirmed that the country achieved 58% of its revenue target as at second quarter of 2019 fiscal year, explained that the success was largely because some one-off items such as the N10 billion from Oil Joint Venture Asset restructuring and N320 billion from revision of the Oil Production Sharing Contract legislation/terms are yet to be actualized.
    Breakdown of the actual revenue accrued to government’s coffer between January and June 2019 showed that total sum of N900 billion (49%) was from Oil revenue; N349.11 billion (86%) from Company income tax; N81.36 billion (71%) from Value Added Tax while N184.10 billion (100.47%) was from Customs Collections.
    “Fiscal deductions by NNPC for federally funded projects also exceeded target.”
    Of the total appropriation of N8.92 trillion, the sum of N3.39 trillion had been spent as at June 2019 against the prorated expenditure of N4.58 trillion, representing 76% performance while N294.63 billion had been released for capital projects as at 30th September, 2019, despite late signing of the budget on the 27th May, 2019.
    According to her, the 2019 actual GDP stands at 2.02% against the proposed 3.01% in the budget; 1.86mbpd of oil production against 2.3mbpd; $67.2 per barrel against the proposed $60 per barrel while the actual inflation rate stands at 11.4% against proposed 9.98% and exchange rate stands at N305.9/$ against the proposed N305/$ at half year.
    While speaking on the 2020 budget estimates she reflects that the adjustments to the MTEF/FSP with respect to the oil benchmark price of $57 per barrel from $55 per barrel and Customs revenue target raised to N1.5 trillion, an increase of N557.4 billion of which N235.5 billion is available to fund Federal Government’s budget.
    She also assured that debt service and the implementation of non-debt recurrent expenditure, notably payment of workers’ salaries and pensions are on track, while spending on 4 critical sectors namely power, roads, rail and agricultural sectors are of top priority.
    She expressed concern over the rising personnel cost including pension costs above N3 trillion, however noted that steps are being taken to “contain the rising personnel costs, including an October 2019 deadline by Mr. President for all MDAs to implement IPPIS.”
    As contained in the 2020 budget estimates, she explained that MDAs are to roll over 60% of the 2019 projects due to paucity of fund in the current year.
    Chairman, House Committee on Appropriation, Hon. Muktar Betara, in his remarks explained that the public hearing was aimed at making it an all-inclusive process in the task of national development.
    “As always, the enormity of demands translated to projects and huge capital, can hardly match available resources. This is the more reason why we in the national Assembly and particularly in the House of Representatives will always do our utmost best in thoroughly processing the national budget.
    “The 2020 Budget of ‘sustaining growth and job creation’ is no doubt built within robust and sound objectives, which if well programmed, will translate to effective implementation and dividends that will spiral growth across all sections and spheres of the country.
  • Finance Minister counters DMO, says Nigeria’s debt more than N25.7tn

    Finance Minister counters DMO, says Nigeria’s debt more than N25.7tn

    The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday said there are debts owed by states and government enterprises that have not been captured in the N25.7 trillion recently declared as total national debt.

    Ahmed made this known during a panel discussion on Debt Transparency at the ongoing World Bank/IMF Annual Meetings in Washington, United States.

    This revelation is coming two days after the Debt Management Office (DMO) published a summary of the nation’s debt as at June 30.

    The minister disclosed plans by the government to produce a more comprehensive debt database with emphasis on providing detailed breakdown of projects related to borrowings.

    “Going forward, we want to scan the environment and have a good database of all the debts that government owes, whether at the sovereign or subnational level.

    “Also, we are trying to capture debts of the state-owned enterprises, and debts we owe local creditors.

    “We want to be able to show more clearly debts that are related to specific projects like debts that we owe to countries like China.

    “Right now, they are reported as part of the public debt but there is no detailed drill down to show the projects tied to them,” she said.

    Ahmed said the move was partly in response to increasing demand from the civil society and the Nigerian public for more transparency in the system.

    She, however, enumerated measures currently in place to ensure transparency in government’s borrowing and debt management.

    The minister explained that all government borrowings were subject to legislative approval conducted in a transparent manner.

    “Nigeria also publishes quarterly data (sovereign and sub-national) as well as the composition of external and domestic debt.

    “In addition, it publishes its Debt Management Strategy, Debt Sustainability Analysis and National Debt Management Framework, and all these are available at the DMO website,” she said.

    She highlighted the benefits of transparency in the system to include helping local and foreign investors, and multilateral and bilateral creditors with their investment and lending decisions.

    The Federal Government, according to the minister, is also undertaking a major programme to assist states with grants and technical assistance to strengthen their fiscal transparency, accountability and sustainability.

    She said the government was embarking on the programme with the support of a 750-million-dollar World Bank financing using the bank’s Programme-for-Results instrument.

    According to her, the initiative will also help benefitting states in debt reporting, domestic expenditure arrears management, and debt sustainability analyses.

    She, however, noted that the support would be given based on the performance of beneficiaries in fiscal transparency and debt management practices

  • Proposed increase in VAT: Senate to invite finance minister, FIRS chairman

    The Senate Committee on Finance says it will invite the Minister of Finance and the Chairman, Federal Inland Revenue Service, (FIRS) to give details on reasons for the proposed increase in Value Added Tax (VAT).

    The Chairman of the Committee, Sen.Solomon Adeola, made the disclosure in a statement issued by his Media Adviser, Mr Kayode Odunaro, in Abuja on Thursday.

    Adeola said the invitation was hinged on the proposed plan to increase VAT from 5 per cent to 7.2 per cent .

    The Minister of Finance, Mrs Zainab Ahmed had after the Federal Executive Council (FEC) meeting on Wednesday spoken on the proposed plan to increase VAT.

    Adeola, said the proposed increase in VAT had generated mixed reactions among the public on its possible effects on living standards and the economy.

    “We are glad that the minister of finance indicated that the VAT act will have to be amended for the increase to take effect.

    “But we are concerned about the current economic situation of the country as it affects the generality of the people.”

    The chairman said the interaction with the two key officials of Federal Government would form part of the basis for possible amendments of the VAT Act.

    According to him, the meeting will further assuage any sentiments against the proposed VAT increase, if eventually the act is amended.

  • N24.39tr debt profile: Why Nigerians do not have to worry – Finance Minister

    The Federal Government has said the nation is not in any way near a debt crisis despite its current N24.39 trillion (about $79.44 billion) debt profile.

    The debt figure, which, as at December 31, 2018, comprised Eurobond loans, facilities from the World Bank Group, China and Africa Development Bank Group constitute over 80 per cent of the total debt stock.

    It represents a year-on-year growth of 12.25 per cent and is higher than the 2017 figure by N2.662 billion.

    Finance Minister Mrs. Zainab Ahmed, who made the disclosure at the sidelines of the just-concluded International Monetary Fund/World Bank Spring Meetings in Washington D.C, explained that despite warnings by the multilateral institutions, the country was not in any way near a debt crisis.

    Her position was collaborated by FSDH Research latest report on Nigeria’s debt position titled: Is Nigeria public debt too high? Analysts at the Lagos-based investment company argued that since Nigeria’s public debt-to-Gross Domestic Product (GDP) ratio was still under 20 per cent, precisely 18.89 per cent, it can still get more loans to reach the 25 per cent benchmark set for itself and the 56 per cent international threshold set for countries in Nigeria’s peer group.

    The analysts at FSDH Research said Nigeria still has room to borrow an additional N7.89 trillion before reaching a threshold of about N32 trillion.

    FSDH Research data showed that countries like China, South Africa, India, UK, Brazil and the United States (U.S.) all have high debt-to-Gross Domestic Product (GDP) of 50 per cent, 57 per cent, 70 per cent, 87 per cent, 88 per cent, 91 per cent and 106 per cent respectively.

    It, however, stressed that these countries have successfully managed to deploy their borrowings into activities that can stimulate revenue generation including education, transportation, construction, security, technology and other growth-enhancing infrastructure.

    The FSHD report explained that by utilising the borrowed funds in areas that improve the ease of doing business in their countries, they have been able to grow their economies further, create job opportunities, and create more avenues for their governments to grow their revenue.

    It said: “The 25 per cent benchmark gives Nigeria a leeway to borrow an additional N7.89 trillion given her level of GDP. But before you are quick to celebrate, there is the need to consider one very important factor: the ability of the country to service the debt without causing untold hardship on the country.

    “In measuring the ability of a country to service her debt obligations, we look at the ratio of domestic debt service-to-Federal Government of Nigeria Federation Accounts Allocation Committee (FAAC) allocation.”

    The IMF had during the Spring Meetings warned Nigeria and other emerging market countries taking excessive loans from China to consider the terms of such facilities, especially, their compliance to the Paris Club arrangements.

    Director, IMF Monetary and Capital Markets Department, Tobias Andrian, said there was nothing bad in borrowing from China, except that the terms of such loans are always questionable.

    He said: ‘Loans from China are good, but the countries should consider the terms of the loans. And we urge countries that when they borrow from abroad, that the terms are favorable for the borrower, and should be conforming to the Paris Club arrangements”.

    Continuing, Andrian, who spoke on the Global Financial Stability Report (GFSR) said: “Let me reiterate that in many frontier markets, we see that the share of debt that is not conforming to the Paris Club standards is on the rise. And that means that if there is any debt restructuring down the road one day that can be very unfavorable to those countries. So, the borrowing terms, the covenants, are extremely important. And we do see a deterioration in that aspect.”

    But Mrs. Ahmed explained that while government borrows to deliver on its promises, it is also mindful of rising debt burden, which eats up about 25 per cent of the country’s annual earnings.

    The minister said: “The World Bank and IMF are cautioning us on the rate at which we are borrowing. They are also cautioning us on the need to build fiscal buffers because the global economy is going to be facing some risks and we agree with that.

    “We are very mindful of the level of our borrowings. Our borrowing is very much within fiscal limits right now. What we are doing is to increase our revenue generating capacity to make it easier for us to meet our debt obligations, routine and capital expenditure.”

    Responding to concerns on Chinese loans to finance the Idu-Kaduna, Lagos-Ibadan and Abuja light rail projects, expansion of four airport terminals and some hydroelectric projects across the country, the minister said: “To borrow, we go through several processes of assessments as well as negotiations. We make sure we get the best possible terms and whether we are borrowing from financial institutions or in Europe or China or anywhere else, we try to get the best rates of borrowing. So far, the conditions we have got are very good ones.”

    Ahmed said the government of President Muhammadu Buhari is committed to ensuring that the country grows in a manner that would bring many people out of poverty.

    According to her, it is for this reason that the government takes its social investment programmes like the school feeding, Conditional Cash Transfers to the poor and vulnerable and TraderMoni programme, very seriously.

  • Nigeria’s Finance Minister Appointed Board Chair of AU Peace Fund

    The Africa Union (AU) on Thursday in Addis Ababa, Ethiopia appointed Minister of Finance, Mrs Zainab Shamsuna Ahmed as chairperson of Board of Trustees of the AU Peace Fund.

    In a statement issued by the Special Adviser to the Minister on Media and Communications, Mr Paul Ella Abechi, the minister expressed appreciation and commitment towards achieving the agenda of the Special Fund.

    The board has 5 African members each representing a region and 2 Non African Members (United Nations and European Union) as International partners. The Minister of Finance is representing the Western African Sub-region in the Board.

    The Protocol Relating to the African Union Peace and Security Council (PSC) provides for the establishment of a Special Fund to be known as the Peace Fund with the objective of providing the necessary financial resources for peace support missions and other operational activities relating to peace and security in Africa.

    The Peace Fund is an independent international fund for the prevention and management of conflicts, and the promotion of peace in Africa.

    It would be recalled that the Board of Trustees was established by the Assembly of the Union in July 2016 to ensure strategic coherence, enhanced governance, and financial and administrative oversight of the Peace Fund.

    The Peace Fund will finance three key priorities: mediation and preventive diplomacy activities, institutional capacity requirements, and peace support operations.


  • No Cause For Alarm Over FG’s Borrowing Plan – Finance Minister

    …says revenue growing successfully

    The Minister of Finance, Mrs Zainab Shamsuna Ahmed, has assured Nigerians that there is no cause for alarm over Federal Government’s borrowing as it still remains within the fiscal limits.

    The minister made the disclosure in a statement signed by the Special Adviser to the Minister of Finance on Media and Communications, Paul Ella Abechi, while speaking at the Deloitte Economic Outlook conference, where she presented a paper titled, ‘Revenue Growth and Economic Development: Expectations for 2019’ in Lagos on Thursday.

    She also explained that with the global trends in global economic growth indicated risks in spite of these the efforts made by the Buhari-led administration with the Economic Recovery Growth Plan, ERGP, the economic exited recession.

    She said: ‘We have been very strategic in the management of our debts, revenues, infrastructure, and human capital. These plans and the tighter coordination, monitoring within and among Ministries, Department and Agencies (MDAs) with economic functions have placed us on a positive trajectory. We intend to maintain a steady course. Our borrowing is still within very good fiscal limits.

    “Global trends reveal slowdown in global economic growth exacerbated by global risks. Despite these trends and pursuant to our policies in the Economic Recovery Growth Plan, we have seen the economy exit from recession and move the economy upwards on a path of sustainable, inclusive & diversified growth.”

    Although she acknowledged that, “The problem we have is that of revenue. By prioritising revenue generation, the Federal Government intends to continue significant investments in human capital and critical infrastructure to sustain the growth trajectory.”

    Meanwhile, the Minister maintained that the nation’s revenue has been growing successfully based on government’s policies and programmes initiated to ensure that the revenue generation base is diversified.

    “Historical performance analysis show that we are succeeding in growing our revenue. We have chosen to be strategic in our response and we recently launched the Strategic Revenue Growth Initiatives to achieve sustainability in revenue generation; identify new and enhance enforcement of existing revenue streams; and achieve cohesion of people and tools.

    “Our targeted revenue to GDP ratio is 15 per cent as set out in the Economic Recovery Growth Plan.

    “We will continue investing in the ERGP implementation by leveraging finance for critical infrastructure and our social investment programmes. These investments, we believe, will guarantee a sustainable future.

    “In 2019 and in line with the Economic Recovery and Growth Plan (ERGP) 2017 – 2020, we will continue to invest resources in achieving our fiscal priorities which are: Enhancing Revenue Generation, Collection and Monitoring; Fiscal Consolidation by Optimising Priority Capital and Recurrent Expenditure; Optimising Management of both Domestic and Global Fiscal Risks; and Increased Coordination of Fiscal, Macroeconomic, Monetary and Trade Policies”, she said.

    However, according to her there is need to do more to achieve high revenue generation.

    “We still need to do more to achieve higher revenue outturn as peer comparison on our ability to convert Gross Domestic Product (GDP) to revenue for capital and social investment show that we have a lot to do”, she stated.

  • Executive Order 007: Finance Minister Heads 13-Man Management Committee

    …Dangote, 5 investors set to execute 19 road projects in 11 states

    Following Federal Government’s resolve to continue with massive infrastructural development across the country under Executive Order #007 signed by President Muhammadu Buhari on Friday, the Minister of Finance, Mrs Zainab Shamsuna Ahmed, will chair the 13-man Scheme’s Management Committee of various road and bridge projects under the pilot phase.

    This was contained in the statement signed by the Special Adviser to the Minister of Finance on Media and Communications, Paul Ella Abechi, where Ahmed explained that President Muhammadu Buhari, under the enabling legal framework, is empowered by Sections 5 and 315 of the 1999 Constitution to make Executive Orders, such as this Executive Order #007 of 2019, to alter, repeal or otherwise modify existing laws.

    She further stated that one of her key priorities has been mobilising investments in developing human capital and physical infrastructure, in line with the Buhari-led administration’s Economic Recovery and Growth Plan (‘ERGP’), which she did not hesitate to challenge her team to “develop and deliver innovative ways of leveraging private finance through Public Private Partnerships, to address our infrastructure deficit.”

    She also added that Executive Order #007 of 2019 on the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme was the outcome of her team’s efforts to think outside of the box and deploy new techniques to develop critical roads infrastructure across the country.

    According to her the Scheme will incentivise private sector investment in Nigerian roads across key economic corridors and industrial clusters, relieving the Government of the burden of funding the initial outlays for these investments.

    She said: “In terms of the enabling legal framework, Mr. President is empowered by Sections 5 and 315 of the 1999 Constitution to make Executive Orders, such as this Executive Order #007 of 2019, to alter, repeal or otherwise modify existing laws.

    Furthermore, the relevant provisions of the Companies Income Tax Act empower “Mr. President to authorise the exemption from corporate taxation, for certain companies or groups of companies, by way of the issuance of tax credits. The Scheme is based on the demand for road projects by companies and other corporate sponsors, who are willing to deploy their own working capital and financial resources to fund road projects located in the major economic corridors of the country where they have significant businesses and operations.

    “In terms of process and governance, prospective road projects are to be submitted to the Government via the Scheme’s Management Committee. This Management Committee, which I chair, has the Minister of Power, Works and Housing as its Deputy Chairman, and the Permanent Secretary of the Federal Ministry of Finance as its Secretary. The other members of the Management Committee are drawn from a number of relevant Federal Ministries, Departments and Agencies (‘MDAs’). They include: The Federal Ministry of Finance; The Federal Ministry of Power, Works and Housing; The Federal Ministry of Industry, Trade and Investment; The Federal Ministry of Justice.

    “Others are The Bureau of Public Procurement; The Federal Inland Revenue Service; The Nigerian Investment Promotion Commission; The Securities and Exchange Commission; The Infrastructure Concession Regulatory Commission; The Budget Office of the Federation; The National Bureau of Statistics; The Nigeria Sovereign Investment Authority; and The Office of the Chief of Staff to the President

    “After carefully considering submissions by Investors, the Management Committee will forward the proposals, through the Chairman of the Committee, to Mr. President, who is empowered, pursuant to the Executive Order, to select Eligible Road Projects.”

    Meanwhile, the Minister disclosed that in the pilot phase of the scheme six private sector players in the construction industry will execute the Executive Order 7, which include Dangote Industries Limited; Lafarge Africa Plc; Unilever Nigeria Plc; Flour Mills of Nigeria Plc; Nigeria LNG Limited; and China Road and Bridge Corporation Nigeria Limited.

    “These Investors will be investing in the following 19 Eligible Road Projects, totalling 794.4km which have been prioritised in 11 States across each of the 6 Geo-Political Zones: Construction of Ashaka-Bajoga Highway in Gombe State; Reconstruction of Dikwa-Gambaru Ngala Road in Borno State; Reconstruction of Bama-Banki Road in Borno State; Rehabilitation of Sharada Road in Kano State; Rehabilitation of Nnamdi Azikiwe Expressway / Bypass, in Kaduna State; Reconstruction of Birnin Gwari Expressway – Road in Kaduna State; Reconstruction of Birnin Gwari – Dansadau Road in Kaduna State; Reconstruction of Makurdi-Yandev-Gboko Road in Benue State; Reconstruction of Zone Roundabout-House of Assembly Road in Benue State.

    “Others are Reconstruction of Obajana-Kabba Road in Kogi State; Reconstruction of Ekuku-Idoma-Obehira Road in Kogi State; Construction of Adavi Eba-Ikuehi-Obeiba-Obokore Road in Kogi State; Rehabilitation of Lokoja-Ganaja Road in Kogi State; Ofeme Community Road Network and Bridges in Abia State; Rehabilitation of Obele-Ilaro-Papalanto-Shagamu Road in Ogun State; Reconstruction of Sokoto Road in Ogun State; Reconstruction of Apapa-Oshodi-Oworonshoki-Ojota Road in Lagos State; Construction of Bodo-Bonny Road & Bridges across Opobo Channel in Rivers State; and Rehabilitation of Benin City – Asaba Road in Edo State.

    “This list of Eligible Road Projects is not exhaustive. Indeed, we are actively soliciting for more serious proposals from interested Investors, State Governments and other stakeholders who may wish to take advantage of this Scheme to partner with the Federal Government in investing in roads. Our intention is for there to be at least one significant Eligible Road Project underway in every State of the Federation within the first year of the operation of this Scheme.”

    According to her (Ahmed) once approved, these eligible road projects will be published in an Official Gazette, and modalities would be agreed upon with the investors to accelerate the implementation of these projects, the verification of eligible project costs, as well as the issuance of tax credit certificates to the Investors.

    This Executive Order also provides mechanisms for groups of investors to pool funds together to invest in road projects – directly; jointly through special purpose vehicles; or indeed, in collaboration with institutional investors such as Pension Fund Administrators, Collective Investment Schemes, Insurance Companies and Investment Banks. These measures have been adopted to enhance the ease of accessibility to the Scheme’s benefits by prospective Investors.

    “The Scheme’s implementation is to be supported by a rigorous monitoring and evaluation (‘M&E’) framework, which draws from the traditional capabilities of the Ministry of Power, Works and Housing, and Bureau of Public Procurement (‘BPP’), as well as the more innovative M&E framework which we have adopted in the implementation of our N2.5 trillion Presidential Infrastructure Development Fund, which is currently anchored by the Nigeria Sovereign Investment Authority (‘NSIA’).

    “As is the case with all such tax expenditures, there is the need to ensure adequate safeguards to protect the National Treasury. In this regard, the Executive Order provides several prudential measures to enhance the integrity of the Scheme. These include the following: Investors may only be permitted to recover relevant project costs after these costs have been duly scrutinised by the Management Committee to ensure that only those costs that are wholly, reasonably, exclusively and necessarily incurred in the development and maintenance of the Eligible Roads are recouped.

    “The quantum of tax credits that may be utilised by any participating Investor is restricted to ensure that in every tax year, the Investor must pay at least half of its normal corporate tax liability. However, unutilised tax credits may be deferred for use in subsequent fiscal years until the investments in the Eligible Road Projects are fully recouped.

    “Investors shall not be entitled to claim any other tax credit, capital allowance, relief or incentive on relevant project costs incurred in respect of any Eligible Road Project under any law in force in Nigeria, in addition to the tax credits provided pursuant to this Scheme. This is to avoid a duplication of claims being made.

    “ The Scheme upholds the powers of the Federal Inland Revenue Service, pursuant to Section 22 of the Companies Income Tax Act, to set aside any artificial or fictitious transactions that may be used to evade taxes, in accordance with extant anti-avoidance laws; and Fiscal Implication Reports will be regularly generated to monitor and track the fiscal costs of the Scheme in line with extant laws”, she said.


  • Finance Minister Unveils FG’s Strategic Revenue Growth Initiatives

    ….to deploy strong coordinating mechanism

    The Minister of Finance, Zainab Shamsuna Ahmed, Wednesday, unveiled Federal Government’s Strategic Revenue Growth Initiatives (SRGI) for sustainable revenue generation in all sectors of the economy.

    Ahmed who did the unveiling as contained in a statement signed by the Special Adviser to the Minister of Finance on Media and Communications, Paul Ella Abechi, had the presence of top government officials from various Ministries, Departments and Agencies in attendance.

    She recalled that upon her resumption as Minister of Finance in September 2018, she took time to reflect and consider which issues would be prioritised over the course of her stewardship over the ministry, its agencies and its affairs.

    According to her she has been guided by the issues outlined by the President Muhammadu Buhari-led administration’s Economic Recovery and Growth Plan (ERGP), which include enhancing oil and non-oil revenues; optimising capital and recurrent expenditures; the management of global and domestic fiscal risks; working with our colleagues in other economic MDAs, to closely coordinate Nigeria’s fiscal, macroeconomic, monetary and trade policies.

    She also pointed that among these focal issues, revenue enhancement has become a critical challenge in terms of the need to mobilise fiscal resources to deliver on socio-economic development targets as set out in the ERGP, based on the current fiscal terrain and recent revenue outturn performance with the realization of budgeted revenue at about 50 per cent as at the third quarter of 2018, which has a distance to transverse to achieve the ERGP’s target of a tax to GDP ratio of about 15 per cent.

    She made it clear to those present at the unveiling that President Muhammadu Buhari mandated the Federal Ministry of Finance to generate more revenues to finance national development as it proactively monitor collections by all MDAs involved in revenue generation.

    This mandate is very critical and important and I intend to make it my priority. It also is the very reason we are all gathered here at this launch event.challenge of revenue generation has been over the years despite referred to largest economy in the continent.

    She further stated that the case remains the same with current contribution between oil and non-oil revenues to oil and non-oil Gross Domestic Product (GDP), hence the need to launch the SRGI.

    She said: “Nigeria’s low revenue generation capabilities have been an enduring challenge to past and present governments. Although we are celebrated as the country in Africa with the largest economy, translating this wealth into revenues remains a challenge.

    “We have therefore faced difficulty in mobilizing domestic funds necessary for human capital development and infrastructure that are both drivers of sustainable economic growth. Our current revenue to GDP ratio of about seven per cent is unsatisfactory and we are keen on exerting all efforts in turning this around.

    “The case remains the same with our current contribution between oil and non-oil revenues to oil and non-oil GDP, for which our analysis on oil revenue to oil GDP reveals as 39% while non-oil revenue to non-oil GDP as 4.2%.

    “Our VAT revenue to GDP in Nigeria for example stands at less than 1% (0.8%) which compares unfavourably to the ECOWAS average of 3.4%. So also, is our excise revenue which is 4.1%, compared to Ghana at 15% or Kenya at 19.5%.

    “The first thematic area is on achieving sustainability revenue generation to optimally collect revenues, so we always maintain fiscal buoyancy and resilience.

    “The second thematic area is on identifying new revenue streams and enhancing the enforcement with regards to revenue collection on our existing revenue streams.

    “The third thematic area is targeted at achieving cohesion between revenue generating entities and equipping them with cutting-edge tools and expertise needed to support high performance, so we can turnaround our current performance on revenue outturn to meet revenue targets that we are charged with.

    “The revenue initiatives have been broken into clear implementable portfolios for each relevant MDA and I believe that these are well thought out initiatives targeted at improving our tax base and collections, ensuring we have big data to work with, deploy a single trade platform, among many others.”

    The Minister also disclosed a strong coordinating and governance unit will be deployed to monitor progress and results on revenue generation, which she will chair.

    “From our end here at the Ministry, we have designed a results framework and we will deploy a strong coordinating and governance unit that will monitor progress and results realization, especially with regards to revenue generation.

    “This is to ensure that the resources, time and efforts being used are productive and that the outcomes from the supporting Monitoring & Evaluation framework will guide executive decision-making as well as proposed reforms of the incentives provided for performance by our revenue collecting agencies.”

    Meanwhile, she noted that the pointed out that SRGI is critical to development and growth of the economy and national life, and stated that relying on volatile oil revenues that fluctuate depending on international energy markets and prevailing exchange rates have been risky and is beyond government’s control.

    “This is why, in the ERGP, we have prioritized the generation and reporting of non-oil as well as oil revenues, to ensure a more sustainable revenue profile for the Federation.

    “In this vein, I urge all MDAs represented here to rise to the challenges inherent in achieving the revenue initiatives we are launching today, to make our contributions, as the Federal Ministry of Finance Group, towards a sustainable, inclusive and diversified economic development of our nation. Based on this, I would like to mandate each MDA to own and implement their portfolio in a results-oriented manner.

    “Indeed, the journey that we set forth will be a challenging one, but if we can succeed in our individual and collective endeavours, we can attain the stretch targets that come with these initiatives that we are adopting today for implementation”, she stated.

    Earlier, the permanent secretary in the ministry and secretary Presidential Initiative on Continuous Audit be(PICA), Dr MK Dikwa while giving an overview noted that the new revenue drive was the brainchild of the Minister of Finance, Mrs Zainab Shamsuna Ahmed. He said, “the Strategic Revenue Growth Initiatives (SRGI) “serves as one of the mechanisms that will assist in improving public confidence in the tax system, delivering on governments priorities as it concerns the welfare of its citizens, growing the revenue system while ensuring the full recovery of our stolen commonwealth.

    “It is now left for us as reform drivers with the needed political will from the top, to steer the ship in the right direction and this requires a great deal of perseverance, commitment, dedication and discipline on our side to enable solutions that will be beneficial to our country.”