By Obinna Chima and Nume Ekeghe in Lagos and Damlola Oyedele in Abuja
The Minister of Finance, Kemi Adeosun has said that the N165 billion
civil service monthly wage bill is over-bloated and can no longer be
sustained by the federal government.
The minister spoke on Thursday in Lagos
at a meeting with the Newspaper Proprietors’ Association of Nigeria
(NPAN) attended by her counterparts in the Ministry of Information,
Alhaji Lai Mohammed, Ministry of Environment, Ms. Amina Mohammed, and
Ministry of Agriculture, Chief Audu Ogbeh.
Adeosun, who provided details on the
economic reform agenda of the federal government, said the N165 billion
being paid to federal civil servants monthly represented 40 per cent of
the total spending of government, reported the News Agency of Nigeria
(NAN).
She said the figure was too high and the government was pursuing
aggressive measures to detect and prosecute ghost workers and other
saboteurs in the system.
“We spend N165 billion every month on salaries and when I came in there was no checking.
“Now, we have created a unit assigned with the sole responsibility of
checking the salaries and catching those behind the over-bloated
salaries,” she said.
Adeosun said the Integrated Payroll and
Personnel Information System (IPPIS) introduced by the previous
administration was defective and sabotaged by the elements benefitting
from the salary fraud.
She said many federal government establishments including the police were yet to be captured in the system.
According to her, it was shocking that
the Nigerian Railway Corporation (NRC), which is not fully functional,
still had 10,000 workers in its payroll serviced by government.
The minister assured her audience that government would correct the
anomalies in the payroll system and weed out all ghost workers in the
civil service.
Adeosun said that the fiscal focus of
the administration was to ensure economic growth that would be measured
on job creation and productive sectors growth.
“The economy is not measured by how many
private jets we have but how many jobs we create. People must be
productive for the economy to grow.
“We have been a consumer economy, but we want to be productive and stop buying everything from abroad.
“We have been borrowing to pay salaries for years and that has to stop because it is not sustainable.
“Last year, we spent N64 billion on travelling and only N19 billion on
roads. Travelling does not grow the economy and this must also stop,’’
she said.
The minister said the compound Gross
Domestic Product (GDP) of the country had been negative in the last 10
years and the administration was working to correct this.
She added that the administration would
be the most disciplined government the country has ever had in terms of
fiscal accountability and responsibility.
Also speaking at the meeting, Ogbeh said
government would reposition the agricultural sector to become the
mainstay of the economy.
“The ministry will give policy direction
and coordination to make farming attractive and for people to practice
it as a business.
“Government will put a policy in place
to recover the $22 billion which is floating out of the country’s
resources to sustain farms in other countries back to our villages.
“Government will also ensure that banks review the double-digit interest rate on loans to farmers and other productive sectors.
“The change promised may appear to be
slow, but it is actually taking place. In this year, we have harvested
millions of tonnes of rice,” he said.
The Minister of Environment, in her contribution, said government would
complete the clean up of Ogoniland in the next one year and ensure the
degraded land is revived for productive purposes.
She said the Great Green Wall project
targeted at planting trees to control desert encroachment would also be
given priority by the administration.
In another forum, Adeosun also faulted the position of her predecessor,
Dr. Ngozi Okonjo-Iweala, who had blamed the inability of the immediate
past administration to save for a rainy day on the state governors.
The governors, the former finance
minister said, had insisted that all revenues accruing to the federation
must be shared, effectively eroding the fiscal buffer that would have
shielded the economy from external shocks.
But countering this position, Adeosun
pointed out that 52 per cent of the Federation Account allocation goes
to the federal government, so if the federal government under former
President Goodluck Jonathan had the will to save, it would have saved
its own portion of its allocation.
Adeosun, said this while speaking on Channels Television’s current affairs programme, Sunrise Daily, yesterday.
She pointed out that it was unfair for the immediate past administration to always blame the states.
Adeosun, who at the time was the
Commissioner for Finance in Ogun State, said: “Let me explain the
structure of states and the federal government. Fifty-two per cent of
the money actually comes to the federal government. So even if the state
governments said they wanted to spend theirs, the federal government
too didn’t save its portion… the federal government was not saving.
“In fact, the federal government was
borrowing even to pay salaries. And that is where the disconnect comes
in. So I think it is largely unfair for the federal government to say
you (the states) were the ones that made me to spend – I can spend mine,
but I can’t force you to spend yours.
“But the federal government didn’t save
its share either. So, collectively, I don’t think we should be trading
blame. I think what we should be doing now is to look at the lessons we
have learnt.
“The federal, state and local governments must have savings. Even if we don’t have savings, we can have investments.
“Look at Saudi Arabia, it has about $700
billion of reserves unspent, and we have about $28 billion. Oil goes,
oil comes but they still have something to show for it.”
She however said the drop in crude oil prices presented a good
opportunity to reset the economy, adding that the opportunity for
diversification of the economy created by the crisis should not be
wasted.
She also spoke on the measures adopted
by the federal government to assist state governments that are unable to
meet their various statutory obligations.
“Everybody is now extremely sober. Every Nigerian is sober. All the
governors have realised that oil prices can plummet from $110 per barrel
to $28 per barrel over such a short period of time and we could be so
exposed that we cannot even pay salaries.
“So there is a sobriety that has set in
and I don’t think we should waste. We are working very hard with the
states and we said to them, first of all we are not bailing them out.
“We have said we would have a fiscal
restructuring plan. Whatever we are doing is conditional, they must go
and drive efficiency, which means the states must do biometric capture
of their staff, know those that are paid, put in efficiency units just
as we have done at the federal government level where we are seeing a
level of savings that it can generate.
We told them they must sign up to a
restructuring plan and if they don’t want a restructuring plan, then we
would not help them in any way,” Adeosun explained.
Responding to a question on the Sovereign Wealth Fund (SWF), she said
the fund was doing well and making the necessary investments.
However, the finance minister said the
federal government wants to “reposition it and have it focused in line
with government’s objectives which is investments in infrastructure”,
observing that the government realised that even with 30 per cent of the
budget allotted to capital spending, the country’s infrastructure gap
is so wide that government alone could not bridge it.
“So what we are hoping is that the
sovereign wealth fund now becomes a channel to attract further private
money particularly from investment funds abroad. So we really want to
focus on infrastructure – toll roads, bridges, power plants, things that
would help the economy grow,” she said.
On efforts to eradicate ghost workers in
the ministries, departments and agencies (MDAs), Adeosun commended the
Economic and Financial Crimes Commission (EFCC) for the job done so far
in this regard.
Adeosun disclosed that the EFCC had set
up a unit that deals with payroll fraud, saying it would soon start
taking those involved in the scam to court.
Furthermore, she revealed that the government had discovered a syndicate involved in the fraud.
“There is actually an organised network
and I don’t want to speak too much about how they were doing it so some
people might now think that it is a good business to go into. But it is a
worrying trend and we spent N165 billion on salaries and pensions.
“When I came into office, there was no
audit, there were no controls. Once you get on that payroll, they pay
you forever. Even dead people were still being paid.
“So we have now put in what we call a continuous audit team and they do
nothing else, but audit that payroll. And that is how we are still
uncovering and there are still more,” she said.
The finance minister also disagreed with
a recent comment by a former Minister of Education, Mrs. Oby
Ezekwesili, that President Muhammadu Buhari had introduced “archaic and
opaque” economic policies which are hurting the poor.
Ezekwesili, while speaking at The
Platform, a public policy forum in Abuja last Saturday, had said that
the president was using the same methods of a command and control
economy he had used when he was a military head of state.
But Adeosun said: “I don’t agree that we
have a command and control economy. What we are trying to have is a
planned economy. There must be some planning. When we were growing, they
used to say Nigeria has the highest number of private jets and we would
all clap for that.
“But we also have the most terrible
unemployment rate. So what we are trying to do is to plan for the future
and have an economy that meets the needs of Nigerians.
“We are a huge economy, so we shouldn’t
have an economy where growth is not inclusive and allows few people to
prosper at the expense of others. So I don’t think we have a command and
control economy.”
Continuing, the finance minister pointed
out that there is a big misunderstanding about the Treasury Single
Account (TSA) and how it operates.
“What is the TSA? It is a huge bank account. So what happened was that
all the agencies of government closed their accounts in various banks
and moved them into a single account at the Central Bank of Nigeria
(CBN).
“Now, at every point in time, the
balance on that account is quoted, it can be N3 trillion today, maybe
tomorrow it is something else. But that money is everybody’s money.
“The Nigerian National Petroluem Corporation (NNPC), Federation Account
Allocation Committee (FAAC) money is in there, and so not all of that
money is available for spending.
“You can’t just go and take NNPC’s money
to build a bridge. Some of that money had already been earmarked for
certain things and some already have liabilities penciled against them.
“What we are doing is sitting down with the agencies because each
individual agency has a sub-account, and saying out of their balance in
the TSA, how much of it is part of the surplus that should have gone to
the federal government.
“That is, how much of it is a free cash
float that can go into the budget. So it is not like everything in the
TSA can be spent,” she explained.
Adeosun, nonetheless, stressed that the TSA has given the federal
government better control and better visibility of government’s revenue.
She also reiterated that the recently
introduced Efficiency Unit by her ministry would help stop wastage and
ensure efficiency in government spending.
According to her, ministerial debit cards would also be introduced by
her ministry in the next few days in order to rein in and track what
MDAs spend and also support the cashless policy.
She said three banks had been given the government mandate on the cards, which would be introduced very soon.
On other measures to block leakages,
Adeosun said: “We have been borrowing to pay salaries for years and the
reason is that revenue is leaking and that is one of the things I am
very passionate about sorting out.
“Let me explain this: at the moment,
there are only three lines of federal government revenue that we account
for. That is money that comes in from oil, taxes from the Federal
Inland Revenue Service and the Customs and Excise Service.
“All the other revenues of government
sit in boards of corporations. And most of them have not been remitting
any money into the Federation Account.
“We can’t afford to waste money the way
we wasted money in the past. Let me give you a shocking statistic. Last
year, we spent N19 billion on roads in the entire federation, but we
spent N64 billion on travels.
“So we set up the Efficiency Unit to
look at those expenses. So, for example, we now have industry guidelines
through a circular we sent out that public officers cannot fly first
class on government money.
“You also cannot even travel on business class unless you are a minister
or permanent secretary. If you are traveling for government business,
why should you travel business class?”
She said there has been strong
collaboration between the fiscal and monetary authorities, restating
that the federal government would borrow from external sources so as not
to crowd-out the private sector.
“We have said from the beginning that we
will only borrow 50 per cent of what we need from the domestic market
because we don’t want to crowd-out the private sector. We want the banks
to go out and lend to the real sector, we don’t want to be competing
with the private sector,” Adeosun said.
When her interviewers reminded her that a
lot of Nigerians were unaware of the existence of an economic
management team in the present government, Adeosun said: “Are you saying
they don’t know the ministers that are in charge of the economy? You
don’t know the vice-president? You don’t know me, the two Ministers for
Budget and National Planning, the Minister of Trade and Investment?
“There is an economic team. It is
chaired and managed by the vice-president. I am a member, the ministers
of budget are members, the minister of trade and investment is a member,
and the minister of information is a member, the head of the Debt
Management Office (DMO) is a member, the Director General of Budget is a
member.
“So there is an economic team. It is
just a different structure from having a Coordinating Minister for the
Economy (CME). Remember that under the CME system, the budget office was
under the Ministry of Finance. But the budget office has now moved to
National Planning.”
According to her, the federal government’s economic team was very competent, hardworking and would turn the economy around.
“Criticism is good. You just have to
listen to people, but we have to do better in telling people what we are
doing. The economic blueprint is very clear.
“We are going to invest in capital projects to ensure that we diversify
this economy. We have been talking about diversification since I was a
child and we have diversified nothing.
“If we just feed ourselves rather than importing food, we would create
jobs and wealth. We have a huge population, huge land mass and what is
missing perhaps is unfortunately infrastructure.
“Let’s take something as simple as
tomato paste as an example. We import tomato paste from China, but we
have tomatoes getting rotten in Kano. But if we have rail and power, we
can process and move these products and we can compete,” she said.
She assured Nigerians that “as soon as the budget is signed, we are
going to pump N350 billion into the economy in this quarter and we are
going to do so every quarter until we stimulate growth”.
“And we would see growth if we spend
money on those things that would create jobs. What I will tell you is
that there are no quick solutions to fixing the economy.
“If you have cancer, you cannot take Panadol, you have to take proper
medication. I don’t want to come here and give people false hopes. I
don’t want to use the word magic because ministers get into trouble when
they use the word magic. It has to be done painstakingly,” she said.
Meanwhile, the N60 billion Calabar-Lagos
rail project, which first set off the impasse between the presidency
and the National Assembly over the 2016 Appropriation Bill has been
included in the budget details transmitted to President Buhari yesterday
afternoon, sources in the presidency have revealed.
The Kano-Lagos rail project, which was
initially allocated N106 billion was slashed to N60 billion in the
revised details submitted to the president.
Presidency officials, who were privy to the revision of the budget
details, said the extra funds for both rail projects were sourced from a
trade-off from the Baro inland seaport project in Niger State, which
now has no allocation, and funds reallocated from the airport security
and navigational equipment projects.
Had the budget been passed without the
current revision, the Baro inland seaport would have been the first of
its kind in northern Nigeria.
In the revised budget details, the
Ministry of Health also got an extra N5 billion for polio and other
vaccines, and for the ministry to meet its counterpart funding
obligations.
All sub-heads under the health ministry were however slashed by 30 per
cent to provide the N5 billion for polio and other vaccines.
The Ministry of Communications got a
N1.7 billion extra, which was removed from the N3 billion allocated to
the Nigerian Communications Satellite (NIGCOMSAT) by the Senate and
House Committees on Communications.
The sources further revealed that 80 per
cent of the grey areas highlighted by the Ministries of Power, Works
and Housing, Water Resources, Education and Solid Minerals were all
granted. Major roads which had monies reduced were all augmented.
In spite of the alterations, the size of the budget envelop of N6.06
trillion was retained because one of the agreements before the
composition of the harmonisation committee comprising officials from the
executive and National Assembly was that the key budget parameters
would remain intact.
The leadership of the National Assembly
had mandated the harmonised committee headed by the Deputy Speaker, Hon.
Yussuff Sulaimon Lasun, to grant 80 per cent of all the grey areas
highlighted by the executive.
The implication however was that 80 per cent of the input of the
National Assembly and its standing committees were removed, a
development that is causing some dissatisfaction among the lawmakers,
who were not consulted before the decision was made.
For instance, 80 per cent of the roads that were approved by the Senate and House Committees on Works were removed.
THISDAY had exclusively reported on
Wednesday that the presidency and National Assembly had reached
compromise to retain the main underlining figures and parameters of the
budget, but the executive gave some room to the National Assembly to
alter, where necessary, up to 20-30 per cent of the budgets of the MDAs.
This was agreed in recognition of the
independence of the legislature with respect to appropriation, and so
that it does not end up being a rubber stamp for the executive, a Senate
source had explained.
Based on this principle, the source
added, the joint committee of the National Assembly and the executive
reviewed the subheads of the MDAs to ensure that where budget cuts or
additions exceeded the 20-30 per cent threshold, they were amended in
line with the agreement reached on the budget.
With work finally concluded on the
revised budget details, the document was handed over to the Special
Adviser to the President on National Assembly (Senate), Senator Ita
Enang, at about 1 pm yesterday by the deputy speaker.
Several lawmakers, who spoke off record, confirmed that it had been given to the president’s aides.
A lawmaker, who served on the
harmonisation committee, also confirmed that the controversial
Calabar-Lagos rail project was “included” in the budget, not “restored”.
Another lawmaker explained that the revision took longer than expected because of attempts to introduce new projects.
“Yes, several additions made by the
lawmakers were removed, but the executive kept trying to introduce new
things that were not contained in either the first or second documents
presented by the president.
“But we stood our grounds and made it
clear that since we were working within certain parameters, both
chambers would have to consider it if we could expand the envelop,” the
lawmaker said.
The Deputy Chairman of the House
Committee on Media, Hon. Jonathan Gaza, speaking at a press briefing,
expressed hope that with the revision, the budget would be signed very
soon.
“The resolutions have been transmitted or rather have been submitted to the president,” he said.
He added that revising the budget was borne out of the need to move the country forward.
Following the conclusion of work on the budget, the Senate and House
adjourned plenary till May 12, 2016 to allow members of the Peoples
Democratic Party (PDP) participate in their party’s congresses
nationwide.
Culled from Thisday
