THE NIGERIAN
10
MONDAY, AUGUST 19, 2013
Business + Economy
Okonjo-Iweala Wants Emphasis On Capital Projects By Govs
MINNA - The Minister of Finance, Dr Ngozi Okonjo-Iweala has expressed concern about states expending their resources on salaries and operational cost rather than on capital projects. Okonjo-Iweala said this in Minna at the National Council for Economic Development (NACOFED) conference. She said that there was the need for states to make strategic choices about how to spend their allocation from the federation account. “The structure of our public expenditure is lopsided, at the federal level and in most states, our budgets consist mostly of recurrent expenditures such as payroll and overhead expenses. “Yet, we continue to have more demands for more recurrent spending. “At present, ASUU wants government to pay N92 billion in extra allowances when the resources are not there and when we are working to integrate past increases in pensions,’’ she said. According to her, we need to make choices in this country as we are getting to the stage where recurrent expenditures take the bulk of our resources and people get paid but can do no work. Okonjo- Iweala, who is also the Coordinating Minister for the Economy, said that at the federal level, there had been recent progress in improving public financial management in the coun-
try. The minister said that government was paying close attention to the management of the country’s foreign and domestic debt. She said that the ministry was collaborating with the Debt Management Office to get a
clearer picture of outstanding debts incurred by state governments. The coordinating minister also urged state governments to keep “an eagle eye on domestic borrowings’’.
According to her, the Federal Government is working hard to diversify the economy as part of its strategy, thereby reducing over dependence on the oil sector.
L-R: Chairman, NLC Oyo State, Mr. Olarewaju Bashir; Former Petroleum Minister, Prof. Tam David-West; ASUU National Treasurer, Dr. Ademola Aremu and others at the town hall meeting of ASUU, University of Ibadan Branch in Ibadan recently.
Housing Project: Gov Imoke Halts Work CALABAR - The Cross River Government has ordered the Federal Ministry of Lands, Housing & Urban Development to stop work at the site of a proposed federal housing scheme. Gov. Liyel Imoke of Cross River, who gave the order in Calabar, said the “stop work order” was on grounds of environmental impacts violations. The reports say that the housing scheme is located in the mangrove forest of Calabar Municipality. Imoke, who was represented by his Deputy, Mr Efiok Cobham, during an on unscheduled inspection visit to the site along the Atimbo Swamp, said that the violations should be remedied. “Henceforth no further development by any agency or
individual should go on in Atimbo axis till further notice,” Imoke warned. He alleged that the federal authorities had gone ahead to execute the housing project without an approval from appropriate state agencies. The governor cited adverse environmental effects on the host community as part of his decisions to stop work at the site. He said that the State Government would not fold its arms and watch anybody expose citizenry to “untold hazards or distorting the ecosystem occasioned by the depletion of the swam.” He said that if the federal authorities continued the project, the community would be exposed to erosion and aggravated flooding to which the area was already prone to. He said these developments
were capable of impacting negatively on the ecosystem in the host community. The Commissioner for Environment, Mr Sandy Onor, said that the project would negatively impact on the state which, he said was the 25th bio-diversity hot spot in the world. Onor said that the Cross River Government would ensure that its environmental and forestry policy and programmes meant to conserve and protect the environment were adhered to.
He said the state had made progress in projecting its ecosystem, pointing out that it would do everything within its powers to ensure the tempo was sustained. ‘The state stands to lose its status as the beneficiary of the UN Programme on Reducing Emissions from Deforestation and Forest Degradation, which Cross River remains the only benefiting state in the country,” he said.
Okonjo-Iweala said that efforts were also on to grow the non oil sector such as agriculture and infrastructure. “We are working to improve our non-oil tax revenue collection. Recently, we hired international consultants to conduct a diagnostic exercise on the bottlenecks in our tax collection process. “They compared our official registry of companies at CAC to the official taxpayers’ database at FIRS. “The result was that 75 per cent of registered firms were actually not in the tax system, in addition about 65 per cent of registered tax payers had not filled their tax returns in the past two years. “Overall, it was estimated that an additional N80 billion could be obtained if we improved our tax systems, given the recent decline in our oil revenues. This is additional money which is urgently needed.’’ Okonjo- Iweala also stressed the need for all states to adopt the Fiscal Responsibility Commission 2007 Act. “We need to cooperate more on our fiscal policies since all tiers of government operate in the same economy. “We will need to coordinate more on how we spend our money, what we spend on and also when we spend it on. “This will help us manage liquidity in the economy and keep our macro-economic indicators stable,” she said. In his remarks, Vice President Namadi Sambo, said that there was the need to reduce recurrent expenditure to sustainable levels, while increasing capital projects. Sambo was represented by the Minister of National Planning Commission, Dr Shamsudeen Usman. The Vice President said that following the Orunsaye Committe report, the Federal Government had taken steps to
reduce waste as well as duplication of government agencies. “Consequently, recurrent expenditures will be trimmed further from 71.5 per cent in 2012, to about 68.7 per cent of the 2013 budget, while the capital vote is expected to increase to 31.3 per cent from 28.5 per cent in 2012,’’ he said. Sambo said that the government was working to restructure expenditure through its transformation agenda by improving capital expenditure in infrastructure to create employment and a business friendly environment. “The annual budget of our administration is predicated on four main pillars, namely macroeconomic stability, structural reforms, governance and investments in priority sectors. “It is our belief that the effort of the Federal Government in this regard would be complemented by those of the states and local governments. “So that together we can lay solid foundation for sustainable economic growth,’’ he said. Sambo urged participants to deliberate and come up with workable solutions that would help to improve public finance in the country. Dr Yerima Ngama, the Minister of State for Finance in his closing remarks, thanked the Niger State Government for hosting the conference. “We need to work more closely in tackling various public services which fall on the concurrent list such as delivering health and education.’’ Ngama said that he was optimistic that the nation’s economy would be on sound footing in the near future, following the implementation of government’s various economic development strategies. The conference was attended by states commissioners for finance, accountants-general as well as permanent secretaries of ministries of finance from the 36 states.
Aftermath Of Banking Crisis
Commercial Banks Sign Resolution
ABUJA - Commercial banks nationwide have signed the Resolution Trust Fund Deed to help cover the cost of the banking crisis witnessed in the coun-
L-R: Secretary General, Association of Federal Health Pensioners of Nigeria (AFHPEN), Mr. Biodum Oladimeji; National President of the Association, Lawrence Akinbola and the Legal Adviser, Mr. Peter Ekundayo at the election of new executives of Jos University Teaching Hospital Branch of the Association in Jos recently.
try in the past three years. The Director, Banking Supervision, Central Bank of Nigeria (CBN), Mrs Tokunbo Martins, said this in Abuja when she briefed newsmen on the outcome of Bankers Committee meeting. “One major event that took place today was the signing of the Resolution Trust Fund Deed. The deed is between the banks. The intention is to cover the cost of banking crisis that we had two or three years ago. “Initially, what we had in place was a Memorandum of Understanding (MOU) where the banks on their own agreed to contribute 0.3 per cent of their total assets to the cleanup of the banking system at that time,’’ she said. According to her, with the deed in place, the banks have agreed to contribute 0.5 per cent of the total assets and 0.5 of 33 per cent of their off balance sheet items to the sinking fund. She said that the intention was to ensure safe “and there would be no incident of falling back to tax payer’s money. “Currently in the banking sys-
tem, we have N21 trillion worth of assets held by 24 banks but the proportion of which they hold those assets differ. “So, for each bank, the total assets of 0.5 per cent of that is remitted, and for the off balance sheet items, they will calculate 33 per cent of their off balance sheet item and take another 0.5 per cent of that,’’ she said. On the 50 per cent withdrawal of public sector fund through Cash Reserve Requirement policy, the Managing Direct, Zenith Bank Plc, Mr Godwin Emeifele, said that the CBN Gov, Malam Sanusi Lamido Sanusi took time to justify the policy. “The reason being that there is a lot of liquidity in the system and the Central Bank had taken time to look at the balance sheets of banks and observed that the liquidity ratio was very strong. “ And there was the need to withdraw some of the liquidity in the system to be able to achieve its primary mandate of macroeconomic stability and also achieve stable exchange rate,’’ he said. On cashless policy, the Man-
aging Director, UBA, Mr Philip Oduoza , said that there had been significant improvement in transaction in the five news states where the policy had been introduced. The five states are Abia, Anambra, Ogun, Kano and Rivers. “ When we started this year, we started with cash transaction of about N8.3 billion as at July 2013, it has moved up to N13.6 billion which is substantial. “ In January last year, the number of point of sales in the system was about 5,900 and today that number has increased significantly to 120,000,’’ he said. On agriculture, the Managing Director, Fidelity Bank, Mr Reginald Ihejiahi, said that banks looked at how best to reinforce the progress made so far on the sector and how to fix the value chain. “What is clear is that for the banks to lend (the banks are anxious to lend) we need to have a new generation of agro-business entrepreneurs. “We need access roads and that’s what will make the cost of entrepreneur lower, we need priority in power,’’ he said.