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US, France Warn Russia of ‘New Measures’ Over Ukraine.


President Barack Obama and French President Francois Hollande warned Saturday of “new measures” against Russia if it fails to work toward defusing the crisis in Ukraine, the French presidency said.

In a phone call on Saturday, Obama and Hollande insisted on the “need for Russia to withdraw forces sent to Crimea since the end of February and to do everything to allow the deployment of international observers,” it said.
Obama’s conversation with Hollande was one of a half dozen telephone conversations he had with world leaders Saturday about Ukraine, the White House says.

He  also spoke with British Prime Minister David Cameron and Italian Prime Minister Matteo Renzi, and held a conference call with the presidents of Lithuania, Latvia, and Estonia.

The new warnings come in the wake of Russia’s insistence that any U.S. sanctions will have a boomerang effect on the United States and that Crimea has the right to self-determination as armed men tried to seize another Ukrainian military base on the peninsula.

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In a telephone conversation with U.S. Secretary of State John Kerry, Foreign Minister Sergei Lavrov warned against “hasty and reckless steps” that could harm Russian-American relations, the foreign ministry said on Friday.

“Sanctions…would inevitably hit the United States like a boomerang,” it added.

It was the second tense, high-level exchange between the former Cold War foes in 24 hours over the pro-Russian takeover of Ukraine’s Crimean peninsula.

Russian President Vladimir Putin said after an hour-long call with U.S. President Barack Obama that their positions on the former Soviet republic were still far apart. Obama announced the first sanctions against Russia on Thursday.

Putin, who later opened the Paralympic Games in Sochi which have been boycotted by a string of Western dignitaries, said Ukraine’s new, pro-Western authorities had acted illegitimately over the eastern, southeastern and Crimea regions.

“Russia cannot ignore calls for help and it acts accordingly, in full compliance with international law,” he said.

Serhiy Astakhov, an aide to the Ukrainian border guards’ commander, said 30,000 Russian soldiers were now in Crimea, compared to the 11,000 permanently based with the Russian Black Sea fleet in the port of Sevastopol before the crisis.

On Friday evening armed men drove a truck into a Ukrainian missile defence post in Sevastopol, according to a Reuters reporter at the scene. But no shots were fired and Crimea’s pro-Russian premier said later the standoff was over.

Putin denies the forces with no national insignia that are surrounding Ukrainian troops in their bases are under Moscow’s command, although their vehicles have Russian military plates. The West has ridiculed his assertion.

The most serious East-West confrontation since the end of the Cold War – resulting from the overthrow last month of President Viktor Yanukovich after protests in Kiev that led to violence – escalated on Thursday when Crimea’s parliament, dominated by ethnic Russians, voted to join Russia.

The region’s government set a referendum for March 16 – in just nine days’ time.

JETS, DESTROYER

Turkey scrambled jets after a Russian surveillance plane flew along its Black Sea coast and a U.S. warship passed through Turkey’s Bosphorus straits on its way to the Black Sea, although the U.S. military said it was a routine deployment.

European Union leaders and Obama said the referendum plan was illegitimate and would violate Ukraine’s constitution.

The head of Russia’s upper house of parliament said after meeting visiting Crimean lawmakers on Friday that Crimea had a right to self-determination, and ruled out any risk of war between “the two brotherly nations”.

Obama ordered visa bans and asset freezes on Thursday against so far unidentified people deemed responsible for threatening European Union leaders Ukraine’s sovereignty. Earlier in the week, a Kremlin aide said Moscow might refuse to pay off any loans to U.S. banks, the top four of which have around $24 billion in exposure to Russia.

Japan endorsed the Western position that the actions of Russia constitute “a threat to international peace and security”, after Obama spoke to Prime Minister Shinzo Abe.

China, often a Russian ally in blocking Western moves in the U.N. Security Council, was more cautious, saying economic sanctions were not the best way to solve the crisis and avoiding comment on the Crimean referendum.

The EU, Russia’s biggest economic partner and energy customer, adopted a three-stage plan to try to force a negotiated solution but stopped short of immediate sanctions.

The Russian Foreign Ministry responded angrily on Friday, calling the EU decision to freeze talks on visa-free travel and on a broad new pact governing Russia-EU ties “extremely unconstructive”. It pledged to retaliate.

“GUERRILLA WAR?”

Senior Ukrainian opposition politician Yulia Tymoshenko, freed from prison after Yanukovich’s overthrow, met German Chancellor Angela Merkel in Dublin and appealed for immediate EU sanctions against Russia, warning that Crimea might otherwise slide into a guerrilla war.

Brussels and Washington rushed to strengthen the new authorities in economically shattered Ukraine, announcing both political and financial assistance. The regional director of the International Monetary Fund said talks with Kiev on a loan agreement were going well and praised the new government’s openness to economic reform and transparency.

The European Commission has said Ukraine could receive up to 11 billion euros ($15 billion) in the next couple of years provided it reaches agreement with the IMF, which requires painful economic reforms like ending gas subsidies.

Promises of billions of dollars in Western aid for the Kiev government, and the perception that Russian troops are not likely to go beyond Crimea into other parts of Ukraine, have helped reverse a rout in the local hryvnia currency.

In the past two days it has traded above 9.0 to the dollar for the first time since the Crimea crisis began last week. Local dealers said emergency currency restrictions imposed last week were also supporting the hryvnia.

Russian gas monopoly Gazprom said Ukraine had not paid its $440 million gas bill for February, bringing its arrears to $1.89 billion and hinted it could turn off the taps as it did in 2009, when a halt in Russian deliveries to Ukraine reduced supplies to Europe during a cold snap.

In Moscow, a huge crowd gathered near the Kremlin at a government-sanctioned rally and concert billed as being “in support of the Crimean people”. Pop stars took to the stage and demonstrators held signs with slogans such as “Crimea is Russian land”, and “We believe in Putin”.

IMPORTANT DIFFERENCES

Ukrainian Prime Minister Arseny Yatseniuk said no one in the civilised world would recognise the result of the “so-called referendum” in Crimea.

He repeated Kiev’s willingness to negotiate with Russia if Moscow pulls its additional troops out of Crimea and said he had requested a telephone call with Russian Prime Minister Dmitry Medvedev.

But Putin’s spokesman Dmitry Peskov ridiculed calls for Russia to join an international “contact group” with Ukraine proposed by the West, saying they “make us smile”.

Demonstrators encamped in Kiev’s central Independence Square to defend the revolution that ousted Yanukovich said they did not believe Crimea would be allowed to secede.

Alexander Zaporozhets, 40, from central Ukraine’s Kirovograd region, put his faith in international pressure.

“I don’t think the Russians will be allowed to take Crimea from us: you can’t behave like that to an independent state. We have the support of the whole world. But I think we are losing time. While the Russians are preparing, we are just talking.”

Unarmed military observers from the pan-European Organisation for Security and Cooperation in Europe were blocked from entering Crimea for a second day in a row on Friday, the OSCE said on Twitter.

The United Nations said it had sent its assistant secretary-general for human rights, Ivan Simonovic, to Kiev to conduct a preliminary humans rights assessment.

Ukrainian television has been replaced with Russian state channels in Crimea and the streets largely belong to people who support Moscow’s rule, some of whom have harassed journalists and occasional pro-Kiev protesters.

Part of the Crimea’s 2 million population opposes Moscow’s rule, including members of the region’s ethnic Russian majority. The last time Crimeans were asked, in 1991, they voted narrowly for independence along with the rest of Ukraine.

“With all these soldiers here, it is like we are living in a zoo,” Tatyana, 41, an ethnic Russian. “Everyone fully understands this is an occupation.”

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By Newsmax Wires

Aliyu Gusau: The Real Evil Genius Returns By Rudolf Ogoo Okonkwo.


 

Columnist:

By Rudolph Okonkwo

Sometime in the late 1980s, Okey Ndibe wrote a cover story for the African Guardian magazine where he labeled the then military president, Gen. Ibrahim Babangida, Maradona- after the Argentinian football player. Ndibe did so for the way Babangida dribbled the political class with his transition to nowhere.

The tag soon entered the psyche of the military president. In early 1990s, Babangida had become so cocky that he declared in a newspaper interview that he was an evil genius. The Nigerian political elite and the hordes of commentators bought into it. But as President Goodluck Jonathan would say, “that’s not korrect.”

The real evil genius of Nigeria is Gen. Aliyu Gusau, retired or not.
I came to that realization after a piece on Gusau by Dr. Perry Brimah compelled me go back and re-read the Wikileak cables where Gen. Gusau, as the National Security Adviser under President Olusegun Obasanjo, was blabbing in front of American Ambassador to Nigeria. Gusau’s encounter with the ambassador says a lot about the man and his regard for Nigeria, a country that for the last 30 years he has played a major role in what it is today. His mastery is in using the intelligence he is in possession of to get what he wants from people in power. His only failure is in his inability to translate it into his ultimate goal- being the Oga Kpatakpata at the Top.

For the record, the primary reason for Gusau’s return is President Jonathan’s last ditch effort to placate Babangida and Obasanjo, all friends and allies of Gusau. With Gusau in place, he hopes to also assure the North that their interest will be taken care of while he runs out the clock for another 4 years when power will definitely return to the north. As is always the case, the interest of Gusau is being interchanged with the interest of the North.
As Gusau prepares to return to power as a possible minister of defense, I looked back at something that I wrote about him and others like him over 14 years ago. The piece is called, “Aliyu Gusau and other Untouchables.” It’s telling that in Nigeria, the more things change, the more they remain the same.

Enjoy.

Behind every throne, the philosopher says, there is something bigger than the King. The Nigerian presidency is a throne presently occupied by Olusegun Obasanjo. But behind that throne are people who are bigger than the King. None of them has been on the spotlight lately as Lt.-General Aliyu Mohammed Gusau. He belongs to the exclusive club of the Nigerian untouchables. Currently, he is under attack by a section of the Nigerian media and he is fighting back with great fury. And when an untouchable fights back, it is not a pretty sight.

Mohammed Gusau is Nigeria’s National Security Adviser. He was the Chief of Army Staff during Shonekan’s Interim National Government of 1993. Just like many people around Obasanjo, he has been on Nigeria’s political scene for a while. He was a royal friend of Babangida who was retired by Abacha. He is credited to be the man who “sold” Obasanjo to the north. Before Gen. Babangida paid the famous courtesy call to Otah farm, General Gusau was the forerunner.

As the National Security Adviser, General Gusau is one of the most powerful people in Nigeria. He knows what ordinary Nigerians do not know. He is in control of both the military and civilian intelligence network, so he can make things happen. And he does with impunity. He knows who is writing fake checks and who is wearing dirty underwear. He knows who is sleeping with another man’s wife and who is stealing Nigeria’s money. He knows a lot. Obviously, more than the King, Obasanjo, knows. That is why he is something behind the throne that is bigger than the King.

One of his special assignments in this current administration is the recovery of public funds stolen from Nigeria’s treasury by past governments. Whether that assignment includes looking at the activities of his friend Babangida from 1983 – 1993, we may never know. By all indication, Gusau is on the heels of the Abachas. Like everything Nigeria, Gusau’s problems seem to be coming from all the complications that follow anyone who ever dined with the devil. And in his case, he dined with a short spoon.

As Nigeria’s security agencies uncover loots and fingerprints, the Nigerian press uncovers footprints. Sometimes, the footprints of the untouchable are seen in areas where the devil stepped on. Which is not totally unexpected considering the fact that the untouchables have the habit of hanging around the devils. In defense of the Nigerian press, the press like the police does little profiling. It also believes that birds of the same feather flock together. The press thinks there is no smoke without fire. That is the premise from which the press begins to work until stories are confirmed and published or unconfirmed and discarded. So it is not difficult to understand why a sector of the Nigerian press will begin by labeling Gusau as the ring leader of the cabal trying to impose Obasanjo on Nigeria and ended up calling him the principal actor trying to destabilize Obasanjo’s administration.

Nigerians are beginning to discover that the man Babangida embraced is more dangerous than the man Abacha did. I would first have as heroes men Babangida rejected before I would accept those Abacha rejected. Abacha was crude, evil and insane. He surrounded himself with sycophantic fools who displayed their pathetic ignorance. The same could not be said of Babangida. He was tactical, evil and cancerous. He surrounded himself with intelligent idiots who displayed their criminal foolishness. In the long run, it would be proved that friends of Babangida did more damage to Nigeria than friends of Abacha. Abacha’s men took away our cash but Babangida’s men took away our cash and something more expensive- our soul.

So the tragedy of General Gusau goes back to the tragedy of his master, Babangida. Like most men around Obasanjo, he came in with heavy luggage and it is beginning to wear him down. Surrounding himself with a legion of untouchables was Obasanjo’s first mistake. Those Warren Christophers of Nigeria, those Henry Kissingers of Nigeria who ought to have retired into private life are busy parading themselves along Nigeria’s corridors of power with all their luggage as the untouchables. The Asiodus, the Ciromas, the Ogbemudias. Men, whose names I learnt in Social Studies classes in primary school are the same names that my children would be learning. And it wasn’t that they did such a wonderful job in the past to warrant a return journey. When Babangida brought in Philip Asiodu to serve in his Interim Government, the press asked Asiodu how he felt about the enormous task facing him. Asiodu told the press it was just a routine assignment.

To the untouchables, the Nigeria project is just a routine assignment. They have been there, and they have done that. On pieces of papers where Nigeria’s money were signed away, their signatures abound. They know the system very well. They have traveled the road many times. They are well connected. They were there when it all began. There is nothing really that anybody can do to them. They can blackmail. They can open a can of worm nobody wants to open. They can pull the right strings and people will start falling down. Yes, they can. They have all the apparatus of state power in their hand. Each day the untouchables spend around the corridors of power, they are busy covering their footprints.

Mr. Nduka Obaigbena, publisher of ThisDay newspaper now knows what it means to look for and discover the footprint of an untouchable along the unholy path of Nigeria’s public life. The paper has the audacity to pursue stories about possible links between Aliyu Mohammed Gusau’s Paris account and the loots recovered from the Sani Abacha family. They were looking at possible kick-backs in the 12 billion naira paid to Julius Berger before Obasanjo visited Germany and if it is responsible for the current in-fighting between government officials. The paper was also looking at Vice-president Atiku’s claim that retired Generals were behind Sharia crises.

How dare you ask questions about the untouchables? For that reason, Obaigbena has to explain to the State Security Service (SSS) the circumstances behind an unsettled bill of $23, 407.39 owed to Marriott Wardman Park Hotel, in Washington DC during IMF/World Bank meeting with Nigerian officials in DC. Mr. Obaigbena has since stepped aside as the publisher and Editor-in-Chief of ThisDay while he fights to clear his name. He would be fighting amongst others, the National Council on Privatization (NCP) who he claimed owe his company, Leaders and Company Limited $150,000 for co-ordinating dinner/briefing of the 1999 World bank/IMF annual meeting held at Marriott Wardman Park House.

If there is a non-criminal way of qualifying Abacha’s name with the word credit, it is in relation to the untouchables. Abacha, in his brutal nature, showed no respect for the untouchables. He dethroned Alhaji Ibrahim Dasuki. He put Obasanjo in jail- something Babangida only dreamt of. He also put Yaradua in jail. A move that even shocked Yaradua himself. And he succeeded in replacing the old untouchables with his cronies whom he devoured, as he seemed fit.

The first goal of any Nigerian that hopes to contribute to Nigeria’s development is to get ready for a battle with the untouchables. These symbols of Nigerian entrenched power must be demystified if the new breed will have any chance. Until we sweep them all out of power, into retirement, there would not be any change in attitude. The greatest danger the untouchables pose to the Nigerian nation is that they are contaminating another generation of Nigerians who are struggling to find their way into positions of responsibility. That is the deepest cuts of them all.

Source: SAHARA REPORTERS.

Full Transcript Of My Presentation At The Ministerial Platform By Ngozi Okonjo-Iweala.


By Ngozi Okonjo-Iweala

Thank you very much to the Honourable Minister of Information for that very rousing welcome and for hosting us for this event.

For my colleague, the Honourable Minister of Sports, I don’t think it’s coincidental that Sports and Finance are together today, because I’d always joked that if I was not the Minister of Finance, I’d love to be the Minister of Sports. So, I totally envy him in his job, especially now that we’re winning.

And to my colleagues, the Honourable Minister of State (Finance), the Perm Sec., and all the members of the audience here; I want to say that we’re going to handle our presentation in such a way that I will start up, pass to my minister of state and then he will pass back to me to round off. And I can’t start this without first acknowledging the support of the President to the Ministry of Finance. It’s not an easy ministry to run, as you all know. Nobody likes Finance because everybody likes to say they never have enough. So, we are grateful for the support. We are also very proud of our staff in the Ministry of Finance – the budget office, the Accountant-General’s office; and I want to thank them openly because, without their dedication and good work, we would not be able to accomplish what we have today. So, what I’m going to tell you, some of it you may have heard when Mr President presented his mid-term report and score card, but it bears repeating. And some will be additional expatiation on that; or new information.

I want to begin with what it is that the Ministry of Finance does. I want to remind people of our mission. Our mission is to manage the nation’s finances in an open, transparent, accountable and efficient manner that delivers on the country’s development priorities. There are four basic things we do in managing these finances and helping to manage the economy. The first is macroeconomic management. It’s the job of the Ministry of Finance, working with the Central Bank, to have a stable macro-economy. If there’s no stability, if things are moving, exchange rate is volatile, inflation is high – we have experienced it in this country before – what happens? You cannot even begin to think of development of the economy. So, that’s one of our jobs.

The other, of course, is managing the finances and mobilising finances for the real sector of the economy; meaning the other sectors that create jobs can grow. Then we also have the job of supporting enabling reforms that make this economy move. And finally, we have the job of supporting job creation indirectly and directly. So, we’re going to talk about what the Ministry of Finance does and has achieved in those four areas.

Let me start with something that we said during the mid-term report. The first is, on the macro-economy, I want to report that the economy is strong and stable. But of course, it faces challenge of inequality and inclusion; meaning that even though the economy is strong, we have problems with jobs and unemployment. We have problems with working to eradicate poverty. We need to move faster. We need to grow faster in order to tackle these problems. So, we are not saying that everything is solved, or that everything is great, but it’s strong; and that stability provides the platform on which we can use to solve the other problems.

What do I mean? We talked before that if you notice – everybody follows the exchange rate between the dollar and the naira – it has been relatively stable in these past two years at 155 to 160. At least, that is something you can evidence for yourself and attest to. It has been stable because we have also been able to accumulate reserves. People wonder why we are saving these reserves that are now almost $50 billion – we’re at $48 billion now. It’s very important because the reserves are what make the exchange rate stable. When the reserves are going down, that’s when you experience that instability and people can come and attack your currency. So, we have managed, working with the Central Bank – I also want to give them credit for good monetary policy – to be able to grow these reserves, stabilise, so that now, we have an exchange rate that can allow people to plan and allow people to do their work. As the Honourable Minister of Information said, inflation is coming down; from about 12.4% in May 2011, it has slowed to about 9.1% now and these all form the bedrock of this stability.

We have made savings. Part of our reserves is also the Excess Crude Account savings that we talk about. We have had about $4 billion in May 2011. We grew it to about 9 billion dollars equivalent at the end of 2012, and now we’re about $6 billion. Why are we down? Because the Excess Crude Account helps us to manage the economy and keep growing even when we experience shocks like when oil production comes down because of either oil theft, or leakages from pipelines and so on. You know, the money we have saved enables this country to keep going and we have enough to keep us going even in the face of shocks for another four to five months whilst we try to solve our problems. This is something that Nigeria did not have before and we are very proud of it. In the past, when we experience shocks, what did we do? We would have to go to the IMF or World Bank to go and look for money – the IMF in particular to shore up the economy, to shore up our balance of payments (that’s what economists call it). But now, even through all the ups and downs that we have experienced, have we gone there? No. Because Nigeria has now put itself – with the existence of this Excess Crude Account – in a position where in the event of any shock, we can go there to stabilise ourselves. That’s why Nigerians must support this account, the saving of this money; the Sovereign Wealth Fund. This country like a family must be able to put money aside so that if you experience shock, you don’t go around begging, you can stabilise yourself with your own savings. That’s what we manage to do.

The second thing I want to talk about is about GDP growth. This stability has enabled the economy to grow. Certain sectors are growing – I will come to that. Overall, this economy is growing and growth is projected at 6.75% by us; by the National Bureau of Statistics in 2013. Even the IMF has projected higher growth, but we’re being very cautious. Over there [referring to a slide], you will see how we compare with some other countries; with the whole of sub-Saharan Africa, they are growing at 5.6%, so we are much higher; even the emerging markets, we’re higher than them. And you can see Brazil, China, South Africa – South Africa at 2.8%, we at 6.75% et cetera – so we are doing well!

The GDP Illustration
Now, I want to spend one minute on something very important, because after we talk, people will say, “GDP growth, what is GDP growth? It’s not important; that’s not what we will eat.” But let me explain to you that without that growth, you cannot even begin to solve the problems of this economy. Let me illustrate to you. [She picks up a cake]. This cake symbolises our income, our GDP or your income within your household. GDP is nothing but the income of the country – the amount of cake you have to eat; you and your wife and children – the same with a country. So, let’s say this is the amount of cake we have to eat.

Now, these are four people sharing this cake – four people: a man, his wife and two children, or Nigeria with a population of let’s say 167 million people. So, this is the cake we have. You have this cake. Having this cake does not mean that every problem in your household is solved. Is it? It doesn’t mean that your income can now take care of all your relatives in the family who still have problems. It doesn’t mean that in your household, you don’t have problems of people not being employed, but you have this cake that you’re sharing. Now, what happens if we add three more people? Suppose, as a family, you marry another wife and you add one wife and three more children. How many are you now?  (Answer: Seven). This is the cake. What will happen if this cake doesn’t grow? All of you will be suffering. Isn’t it? When you marry that wife and have more children, or even if you have four and you have another three or four; you will want your cake to grow. That is the same way we want GDP to grow – right? So, this is the first cake. What happens if the cake doesn’t grow is that all of you will start suffering. [She takes up another cake].

Supposing you now have a bigger cake; put all the people on top and you now have the seven people; would you not be better off? What if you have an even bigger cake? You see this biggest cake? You can put so many more people on top. [Speaking to assistants to collect illustrative materials: “give me all the people, give them to me, all of them will be there”]. And what will happen? That means you will have even more food. So, is it not false when people say that growing the cake does not matter? It matters; because if you have the same cake and your size is growing, what will happen is that you become even poorer and poorer; isn’t it? If it is not growing, you will suffer even more. Now, Nigeria has a cake – our GDP – and our population is growing at 2.5% per annum. If we don’t grow this, we will stay with the same cake and it will become worse and worse. So what we want to do is grow this cake as fast as possible, as large as we can, while solving the other problems. Note that I didn’t say growing the cake solves all the problems; but if we don’t grow the cake, we are going to suffer.

So, don’t listen to those who say, “What is GDP growth – it doesn’t matter.” It is not true; it matters tremendously. It’s with this growing cake that you can now call those people in your family or village who say you are not helping them. Isn’t it? If your cake is growing, you can call them; help them with their health problems, help them with food, help them with other things. But if you say cake does not matter, then you cannot help them at all. This is what GDP growth is about. I want Nigerians to understand this so that we don’t have this challenge of, “What is GDP?” In fact, we need to grow at almost 8 to 10 percent per year. In fact, Vision 2020 projects 13 percent in order to solve unemployment and other problems that we have. I’m sorry I spent some time on this, but it’s about time for the Nigerian population to stop being deceived by people who are not telling them the truth about what happens in the economy.

Now, let me quickly pass to other things. The first thing this country does, of course, is prepare the budget and everybody knows about it; to manage the finances and we have the DG Budget here. We’ve had problem with getting budget preparation done on time, and I want to say that for the first time, the 2013 Budget was prepared in record time and also passed by the National Assembly in record time on 20th December 2012, just before Christmas. Now, this should give us the year to implement; but of course, you know that we have some challenges with implementation and some things that we need to agree with the National Assembly in order to make the budget hold. For this year, we have been working on it but it has not stopped us from moving forward. We released first quarter capital – 400 billion; didn’t we? And work is going on. We released second quarter capital – 200 billion – so we will continue to implement to the best our ability, and it’s the job of Finance to make sure that we get that money in.

But the money that we get in also depends on what happens with the sectors of the economy. So, Finance does not print money. We don’t manufacture money. We only can disburse money that comes into our coffers; that the country genuinely earns from its oil and gas, from agriculture, from all the other aspects, the money it gets from taxes that it collects even on non-oil revenue and Customs taxes. So, once we get all those in, we disburse them. But if anything happens and we experience a shock, for example, this year, Customs is a little bit down in terms of collection because importation has come down, especially importation of rice; partly because we are growing our own, more of it as we said in the midterm report; but also because people stocked up last year in anticipation of what would happen. So, when we have these things happening, then the income reduces and Finance has to manage whatever comes in. So, I want people to know when they’re feeling very stressed out that there’s not enough money, Finance does not have money hidden somewhere in the safe; it is what it gets that it disburses.

Now, let me move quickly to one of the things we have delivered. Nigerians have complained that the cost of government is too high; we are spending too much on recurrent budget. What have we developed in Finance? With the support of the President and all of you, we’ve managed to take expenditures down from 74% recurrent of the total budget to 68% in 2013, and we’ll continue to take it down to the best of our ability. We have the envelope system. People don’t understand it but it enables us to engage other ministries and agencies in the management and setting of the budget. That allows them to put forward their priorities in a way that we can engage them in a conversation and to prioritise especially in terms of completing uncompleted projects of which we have about six thousand in this country and these are some of the systems that we’ve put in place to make that work. I talked a little while ago about the fact that imports are down. Whilst that means that some of our revenue are down, but we’re happy because we want to diversify this economy. Nigerians don’t want to keep importing. So, non-oil imports have decreased – things like textiles, plastic, rubber – things we’re making here; and those things have even increased in terms of exports. I’m sure that the Minister of Trade and Investment will say more about that. But I also want to mention our waiver and tariff policies to just let you know that Mr President has insisted on a policy of not doing individual waivers. So this ministry is doing sectoral waivers. When we give a waiver now, it is to encourage a whole sector not just to encourage an individual; and those kinds of policies; we’ve done them for aviation, for agriculture, for solid minerals. They can import spare parts and equipments at zero duty. And this is all designed to spur the rest of our economy.

Quickly, let me move on to talk about debt. On Friday, I think it was on the back page of This Day, I wrote an article about our debt because there are so many misconceptions about it. I want you to know that no one in government – neither Mr President nor the Ministry of Finance, the debt management office and the legislature – we don’t support that Nigeria becomes an indebted country again. So, what are we doing? The ministry is delivering a very prudent and strategic debt management approach to the country. I want you to look at some of the numbers. You know, we say that our national debt is low; and that is true because if you measure us against so many indicators you will see. If you look at that, you will see that domestic debt is really the issue. And if you look at the flow of domestic borrowing, you will see that it spiked in 2010 where we increase salary by 53% at once.

Now, I’m not against increase of salary, so don’t let anybody go from here and misquote me. But it has implications; and in order to cover it, domestic borrowing spiked. Bonds had to be floated. It’s not that good to borrow for things like recurrent expenditure and consumption. So, part of our new strategy is not to do that; to start lowering domestic borrowing. One of the things Mr President said to us is, we have to bring it down and we’re doing it. From N852 billion in 2011, we went down to N744 in 2012, and for 2013 budget, I think to N588 billion, and we’ll continue to bring it down. That’s part of the new strategy.

At the same time, we’re slowing down the growth of the debt stock. So, it’s not that the debt stock won’t grow, but it will grow much more slowly than before; and you can see it. The debt stock, total debt is now at about 7.5 trillion naira made up of 6.49 trillion domestic and about 1.0 trillion external and we will slow that down by trying to retire the bonds that are coming due instead of rolling them over at high interest rates. I’m very proud to say that in 2013 we retired 75 billion in bonds and that’s the first time we’ve done it in so many years. That is part of the overall strategy.

The last part is that we have also developed a sinking fund and every year we put in 25 billion in it so that we can continue to retire this debt and not grow it at a very fast pace. We will be borrowing, but it will be for very prudent things that really make a difference on the ground for Nigerians and it will be at a much slower pace. Now, quickly, the ministry has worked hard – Federal Inland Revenue Service, the Customs Service – to try and bring in more revenue into our coffers. And of course, they face challenges. We have to improve in terms of our tax collection and I want to tell you that we are launching a tax drive for non-oil revenue taxes to increase; and you will be seeing very soon, adverts from FIRS to push this on. The Customs is also modernising its operations with an objective to become a modern Customs system that can manage destination inspection and all the things that Customs does by the end of this year.

The objective is that we shouldn’t only look at the expenditure side all the time, we must also look at growing our revenues in the country; and this is what Finance has done.

I want to spend just one minute before handing over to my colleague on a few things that Finance is delivering to make public financial management more efficient and more transparent. We have to step away from the manual management of our finances whereby, for instance, for payments, we used to send money in bulk to ministries to pay their staff, to pay for their expenses. We have now put in place three electronic platforms that we are introducing and implementing at the moment. The Integrated Personnel and Payroll Management System is in place and it is allowing us to pay staff straight through biometric data means, we can check and pay them directly. Now, we haven’t done all MDAs; we’ve done about 215 and this exercise has helped us weed out about 45,000 ghost workers and save ourselves about 118 billion naira. That’s a lot of money.

Now, people say to me, where are these ghost workers and who is responsible? I just want to say here that we’ve looked and we’ve found that in almost every ministry, department and agency we had series of these ghost workers and it is identifying who to pinpoint, that’s what we’re looking at now. But it is very difficult because with people coming and going within ministries, it is not easy. The important thing we are facing is to get them out so we can save the money and put in place systems to make sure that this does not occur. That’s what Finance is doing.

We still have to complete the rest of the MDAs by the end of this year. We’ve also put in place a government integrated financial management system and, in the beginning, this has slowed down the transfer of resources to ministries. Bear with us, this will improve. But what this means is that transparently we can connect the MDAs, be able to see all our money and be able to pull it back. So, all those who may be contemplating this, I think you should revise your thinking because transparency is on the way.

Now, to stem leakages and improve our finances, we also worked very hard in the ministry to totally change the way we do business in terms of paying subsidies. We audited N1 trillion in subsidy payments under the presidential task force led by Aig Imokhuede, and we found N32 billion questionable. We have recovered N14 billion as we speak and we have tightened the payment process, so that there is more independent verification of how that is being done. The other thing the ministry has delivered is the cleaning up of the contributory pension scheme. This is something very painful to Nigerians that they would work and then people would steal the money that should be for their pension in their old age. This is not acceptable. So, to reform this, the President gave us permission to implement a section of the Pensions Reform Act which had hitherto been blocked; it had not been implemented, to bring all these pensions – the defined benefit systems – under one roof, under a pension transition administration department, and that will enable us to keep a hold on this fraud and to keep it at bay because these things will be managed under one roof transparently. The implementation of this is now underway.

The contributory pension scheme is fine, we have more than N3 trillion there, it’s working well and I want to reassure Nigerians of its good health. So, it’s only people who are still under the old scheme which we are reforming that are affected. We are implementing a more transparent system. Within the next six months, by God’s grace, we’ll have everything together with biometric systems in place so we can also pay our pensioners directly.

So, let me just say to you that all this, as was said by the Minister of Information, have been validated; all these things we’re doing, which amalgamate to underpin a stable economy have been validated outside. You don’t have to listen to me or Mr President or even the Minister of Information. Just check what the rating agencies are doing. Nigeria is one of the few countries being upgraded and rated as stable in an environment where other countries, including some close to us here in Africa, are being downgraded, and I think that Nigerians, even if you’re critical of government, you have to accept external evidence that we have a stable economy. The grading does not say that we’ve solved all the problems of our economy – no country ever does that – but it says that we’ve got the platform with which to do it.

Now, just before I hand over, I want to say one word on SURE-P, the subsidy reinvestment program. We promised Nigerians, at Ministry of Finance, that we will share with them the money that comes into this program transparently and what it is being used for transparently so that they will see because Nigerians were sceptical that this money will be put to good use. You can see on the screen. We have published every single month; we’ve kept faith with Nigerians. Every single month in the newspapers, we publish how much money comes in and you can see that; in 2012, N180 billion came in to Federal Government, the states got N154.6 billion, local governments, N76.4 billion. In January to May 2013, we have received N75 billion, state governments N64.4 billion, local governments N31.8 billion so far, and we have been publishing it.

And what has it been used for? We said, go and check for yourselves. We have used it for social safety nets for our women and children, to strengthen and improve immunisation for our children, to strengthen and improve safe delivery for our women. I know that no man here wants his wife to die; no woman wants to die in child birth. We have the names of every woman in every ward that has benefitted from this scheme. So, for those who say, “Ah, no one in my place has benefitted” you can verify it. We have it. If you want it, ask me. I will give it to you so you can check that people are really benefitting and they’re getting cash transfers.

When they come for pre-natal care, they get cash transfer of two thousand naira. When they come to have attended delivery, when the child is brought for immunisation; that is what we call conditional cash transfer program and, so far, in the present Saving One Million Lives program, more than 400,000 women’s lives and children’s lives have been saved through the money used by SURE-P.

In addition to that, we have been working on transportation and I know you heard from the Minister of Transport on roads and bridges built using this money; so I will not dwell on it. My intent was from the Finance point of view to just show you that we kept faith with Nigerians, we have been transparent, you can verify and we’ll be happy to give you all the information.

Let me now call on the Honourable Minister of State (Finance) to talk about the other things we have been doing in the financial sector.

Minister of State Takes Over
Courtesies.

I am also not going to waste time. I am going to talk about what the ministry has been doing to actually ensure that we have reformed the financial sector. All the banks in Nigeria are fully capitalised. And we’re also happy today that the level of non-performing loan has come down to only 5%. Nigerian banks are the healthiest you can find in Africa and this has been shown. You remember 3–4 years back, most of the banks have reported losses, but today they are reporting profits that they never reported prior to 2008. And for those who have been following, the highest profit ever recorded in the history of Nigerian banking system was reported last year – N97.58 billion made by Guaranty Trust. You look at Zenith making 90 billion. Profitability has returned to the Nigerian financial system and people can now safely go and get finances.

The problem we have is the cost of borrowing. After now, interest rate is relatively high and we need to have lasting solution for it. That’s why we’re now restructuring and strengthening our development financing institutions so that they can give concessional loans to the critical sectors of the economy. To strengthen them again, the President set up a committee to look at how to solve the problem of development lending and we are going to establish a wholesale development finance institution that will be well capitalised which will lend wholesale money to the development institutions so that they can lend to the real sector. We are also inviting the private sector to come and invest in some of our development institutions. As you can see already, our infrastructural bank has some private sector and we are now trying to make sure that we get some private sector capital into that of agriculture.

Back to the capital market, last year, Mr President magnanimously approved forbearance to all our stockbrokers. Our stockbrokers are those who actually make the market perform and all of them have lost their capital. Most of the borrowing they did, they actually put in their money to borrow on the margin. They lost that investment. Yet, as far as the banks are concerned, they have to pay the nominal value of the debt while the real value of the shares that are underlying the debt are almost 20% of the loss they have taken. There is no way the capital market will actually progress with that kind of situation. Mr President magnanimously approved that forbearance and our stockbrokers are now healthy. They are now relieved of all these debts, they are now free to borrow more. And they’ve also regained confidence that yes, the Nigerian government can really support the stock broking companies, and you know that 60% of the money comes from international portfolio investors. Now, what we have done to our own domestic companies told them that we are really out to support our people. Therefore, they have more confidence in our market; money is now flowing.

From last year when we got the forbearance to date, the capitalisation of the market has increased by 70%. This has never been recorded anywhere. Everybody knows that in Nigerian insurance, you only do it under compulsion because people don’t have any confidence in the insurance sector. We know that this is a big problem and we went ahead to strengthen the regulatory authorities in order to bring sanity to the insurance sector. One thing we did in insurance, people just hook policies, report their own premium and declare profits where cash is not collected. So we came with No Premium, No Cover policy. At first, most of the brokers were not happy because the broker wants to make his money whether the man pays his premium or not. But today we say No, if you take insurance cover, nobody should recognise income unless cash is paid. So now, insurance is done on cash basis. Last year, we had a backlog of unpaid insurance of N55 billion; today, it is zero. All insurance are cash covered and that gives confidence to the policy holders.

When we came in, we had only 700 thousand. Now we have about 1.5 million policy holders and more equity is coming from abroad. We now have a lot of FDIs. About 10 companies have come into Nigeria and Nigerian companies can now even give insurance cover to oil and gas sector. There is 48% local retention of all the policies issued in that sector and this has actually improved our insurance industry and it will enable the industry to raise a lot of resources because in some countries, insurance companies have more money than banks. They even fund banks. We are encouraging our own so that they grow and we mobilise enough resources for investment in the real sector.

Another function we do is to ensure that all federally collected revenues are distributed to the three tiers of government according to the revenue sharing formula. In the past, FAC actually made it acrimonious; a lot of issues were there. We actually ensured that all outstanding issues that we met have been cleared. Today, when we come to FAC, we have turned it into committee where problems are solved, to committees where we educate ourselves, where we encourage others to copy the good practices of other states. We do peer comparison and we also ensure that we adopt the best practices and that’s why we’re just introducing the IPSAS – the International Public Sector Accounting Standards which all the states, parastatals and Federal Government are going to adopt so that our accounts are transparent and comparable to others. We have already ensured that we always hold FAC on time because holding FAC on time has a very serious implication on payment of salaries. And you know in Nigeria, unless salary is paid on time, workers are not happy. And you can agree with me that today, our workers are happy because we ensure that at least, Federal Government workers get their salary before 20th of every month and now with the electronic payment system, it is now – at least some get about 18th or 19th of the month and this has brought relative industrial harmony to Nigeria.

We also have a skill in the Federal Ministry of Finance for encouraging export of non-oil products. Before, few people know about the Export Expansion Grant. What we do, is in order to diversify the economy away from oil, all non-oil exporters get a grant based on the export proceed that they expatriated back. So, if you now produce anything non-oil and export, when you bring the money back we calculate based on certain parameters and you can get as much as 20% of the value of your export being given to you free by the government. Why are we doing that? It is because the cost of production in Nigeria is higher than the cost of production internationally. So, we have to make up for the cost of production to make our own manufacturers competitive. We have been doing that, yet we have some glut. We have the glut because growth in export has been growing very fast and we have to revise the system. We have parameters we have actually looked at and we realise that export growth is no more our problem in Nigeria because the target we set for our exporters; 71% of all exporters are growing higher than 10% every year. So, that has been solved. Re-investment of export growth; also 68.9% of our exporters are re-investing the money they get from the bank to develop their own companies. So, that is not also our problem.

Today in order to get the EEG (export expansion grant), you have to do well in the area of employment and you have to do well in the area of value addition. We are now reducing the weight for export and retention because we have already succeeded there. I think I will call on the CME to continue.

CME Continues

OK. Let me round off very quickly for Finance, because Minister of Information is telling me we need our own day. Let me just mention a couple of other areas quickly. The ministry supports; we are of finance but we’re also about making sure that the real sectors of the economy work. So in addition to the budget which we manage, we also have the task of mobilising resources for the sectors of the economy and I’m not going to go through all that I wrote; they can quickly roll it through the screen.

I’m very proud to announce that we have been very active to mobilise – sometimes zero interest – very low interest concessional financing for our sectors; money that is zero interest, 40 years to repay, 10 years of grace – the type that you cannot find easily anywhere. So we have been very careful to do that and 12 billion dollars worth, almost every sector. Agriculture – from China Exim Bank, from the World Bank, we have mobilised money. Environment: 450 million from the World Bank for environmental issues; transport. You know, we’re doing even guarantees so that we can have some of our infrastructure developed; for example, a letter of comfort to develop the Lekki deep sea port. So when you see all these things being developed, you know that Finance has done some work to make resources available or guarantees that make it work. Second Niger bridge – we’re now working on a private-public partnership arrangement where we’re going to co-invest with some investors that have been identified from outside with PPP to make sure that this bridge gets built. As we speak, they’re already on site trying to do some of the initial groundwork. We work with the World Bank, the African Development Bank, the Islamic Development bank and other banks to try to make this happen.

So, you can see, in health, in power, we are going to go to the market very soon to raise a Eurobond of about a billion dollars for the power sector. We know that power is what we need in this country; that’s what we have focused on. So, all that money will make gas available to fire the power and the emergency gas plan of the Minister of Petroleum Resources has already been yielding results in terms of making gas available to make our power situation better. But we want to support them to improve even more. So, we raise resources for that.

And the education sector – we’ve also raised money for states that have challenges: Bauchi, Ekiti, Anambra – so many of the states to benefit from that. In ICT we’ve raised resources. And aviation, housing – I can just say almost every sector of the economy – I’m proud to say we’ve done that. The Nexim Bank has also used resources to support trade for our economy; export-import bank which is under the Ministry of Finance. Let me just mention one interesting thing. We have supported the empowerment of women in the ministry through devoting some resources – 3 billion naira – to specific programs in five pilot ministries like Agriculture, Health, Water Resources, ICT and so on that focus on works, focus on delivering for women. For example, the Ministry of Works said that they will make more women contractors, sub-contractors. They will increase the number that will get contracts and jobs because women are not favoured and we have said that when they do it, we will support them with additional disbursement from this N3 billion. So we are encouraging support for women within this budget and that is something that the President really supports. So, these are some of the things we are doing.

Finally, we are supporting job creation. We are managing some job creation programmes apart from what we are doing for the real sectors of the economy, mobilising money for them in addition to the budget to create jobs like the 3.5 million jobs targeted by Agriculture in 2015. It’s the resources we help mobilise that will help them deliver that. But we are also managing some direct job creation being undertaken and implemented by government. Just a couple of examples which you know – we have the program that was mentioned by the Honourable Minister of Information, the YouWIN program of Mr President – this is his program – and I’m happy to tell you this is one of the most popular programs in Nigeria. From the first round we did, we have already created 14,000 jobs all over all parts of the federation. This is just the first survey. The second survey, maybe another 14,000 – that’s almost 30,000. The second round we just launched for women only and the third round we’re going to launch for men and women, the target of 80,000 to 110,000 jobs is easily reachable.

This program is surpassing our expectations in terms of job creation and we’re very proud of our young entrepreneurs who are doing this. We are also managing the Graduate Internship Program. Our objective there is to place 50,000 graduate interns with private sector. Over 1,000 private sector firms have applied. We have placed so far 1,309 graduates and we’re working very hard to speed up to place all the 50,000 who have been processed as qualified to participate in this scheme. And of course, we were previously supporting the community services program designed to create 370,000 jobs a year. We’ve moved that to the ministry of labour now, but I want to tell you that 178,000 jobs have already been created. And people who have seen these people working in the field, building ditches, doing drains, maintaining buildings have reported that they’re there and the jobs are real. So, these are some of the things that we have tried to do within the ministry to support the job creation agenda. I could go on and on.

We actually need more time but let me just stop here and say that Ministry of Finance is a multi-faceted ministry that is delivering day by day on the budget, on the additional finances for the sectors of the country, on managing direct job creation programs and on supporting the sectors – I haven’t even told you the things we do to support power through the bulk trader, to manage the debts of NEMCO, to push the various sectors along. We are doing so much more than we have time to share today and we are achieving results.

Thank you very much.

Thank you very much to the Honourable Minister of Information for that very rousing welcome and for hosting us for this event.

For my colleague, the Honourable Minister of Sports, I don’t think it’s coincidental that Sports and Finance are together today, because I’d always joked that if I was not the Minister of Finance, I’d love to be the Minister of Sports. So, I totally envy him in his job, especially now that we’re winning.

And to my colleagues, the Honourable Minister of State (Finance), the Perm Sec., and all the members of the audience here; I want to say that we’re going to handle our presentation in such a way that I will start up, pass to my minister of state and then he will pass back to me to round off. And I can’t start this without first acknowledging the support of the President to the Ministry of Finance. It’s not an easy ministry to run, as you all know. Nobody likes Finance because everybody likes to say they never have enough. So, we are grateful for the support. We are also very proud of our staff in the Ministry of Finance – the budget office, the Accountant-General’s office; and I want to thank them openly because, without their dedication and good work, we would not be able to accomplish what we have today. So, what I’m going to tell you, some of it you may have heard when Mr President presented his mid-term report and score card, but it bears repeating. And some will be additional expatiation on that; or new information.

I want to begin with what it is that the Ministry of Finance does. I want to remind people of our mission. Our mission is to manage the nation’s finances in an open, transparent, accountable and efficient manner that delivers on the country’s development priorities. There are four basic things we do in managing these finances and helping to manage the economy. The first is macroeconomic management. It’s the job of the Ministry of Finance, working with the Central Bank, to have a stable macro-economy. If there’s no stability, if things are moving, exchange rate is volatile, inflation is high – we have experienced it in this country before – what happens? You cannot even begin to think of development of the economy. So, that’s one of our jobs.

The other, of course, is managing the finances and mobilising finances for the real sector of the economy; meaning the other sectors that create jobs can grow. Then we also have the job of supporting enabling reforms that make this economy move. And finally, we have the job of supporting job creation indirectly and directly. So, we’re going to talk about what the Ministry of Finance does and has achieved in those four areas.

Let me start with something that we said during the mid-term report. The first is, on the macro-economy, I want to report that the economy is strong and stable. But of course, it faces challenge of inequality and inclusion; meaning that even though the economy is strong, we have problems with jobs and unemployment. We have problems with working to eradicate poverty. We need to move faster. We need to grow faster in order to tackle these problems. So, we are not saying that everything is solved, or that everything is great, but it’s strong; and that stability provides the platform on which we can use to solve the other problems.

What do I mean? We talked before that if you notice – everybody follows the exchange rate between the dollar and the naira – it has been relatively stable in these past two years at 155 to 160. At least, that is something you can evidence for yourself and attest to. It has been stable because we have also been able to accumulate reserves. People wonder why we are saving these reserves that are now almost $50 billion – we’re at $48 billion now. It’s very important because the reserves are what make the exchange rate stable. When the reserves are going down, that’s when you experience that instability and people can come and attack your currency. So, we have managed, working with the Central Bank – I also want to give them credit for good monetary policy – to be able to grow these reserves, stabilise, so that now, we have an exchange rate that can allow people to plan and allow people to do their work. As the Honourable Minister of Information said, inflation is coming down; from about 12.4% in May 2011, it has slowed to about 9.1% now and these all form the bedrock of this stability.

We have made savings. Part of our reserves is also the Excess Crude Account savings that we talk about. We have had about $4 billion in May 2011. We grew it to about 9 billion dollars equivalent at the end of 2012, and now we’re about $6 billion. Why are we down? Because the Excess Crude Account helps us to manage the economy and keep growing even when we experience shocks like when oil production comes down because of either oil theft, or leakages from pipelines and so on. You know, the money we have saved enables this country to keep going and we have enough to keep us going even in the face of shocks for another four to five months whilst we try to solve our problems. This is something that Nigeria did not have before and we are very proud of it. In the past, when we experience shocks, what did we do? We would have to go to the IMF or World Bank to go and look for money – the IMF in particular to shore up the economy, to shore up our balance of payments (that’s what economists call it). But now, even through all the ups and downs that we have experienced, have we gone there? No. Because Nigeria has now put itself – with the existence of this Excess Crude Account – in a position where in the event of any shock, we can go there to stabilise ourselves. That’s why Nigerians must support this account, the saving of this money; the Sovereign Wealth Fund. This country like a family must be able to put money aside so that if you experience shock, you don’t go around begging, you can stabilise yourself with your own savings. That’s what we manage to do.

The second thing I want to talk about is about GDP growth. This stability has enabled the economy to grow. Certain sectors are growing – I will come to that. Overall, this economy is growing and growth is projected at 6.75% by us; by the National Bureau of Statistics in 2013. Even the IMF has projected higher growth, but we’re being very cautious. Over there [referring to a slide], you will see how we compare with some other countries; with the whole of sub-Saharan Africa, they are growing at 5.6%, so we are much higher; even the emerging markets, we’re higher than them. And you can see Brazil, China, South Africa – South Africa at 2.8%, we at 6.75% et cetera – so we are doing well!

The GDP Illustration
Now, I want to spend one minute on something very important, because after we talk, people will say, “GDP growth, what is GDP growth? It’s not important; that’s not what we will eat.” But let me explain to you that without that growth, you cannot even begin to solve the problems of this economy. Let me illustrate to you. [She picks up a cake]. This cake symbolises our income, our GDP or your income within your household. GDP is nothing but the income of the country – the amount of cake you have to eat; you and your wife and children – the same with a country. So, let’s say this is the amount of cake we have to eat.

Now, these are four people sharing this cake – four people: a man, his wife and two children, or Nigeria with a population of let’s say 167 million people. So, this is the cake we have. You have this cake. Having this cake does not mean that every problem in your household is solved. Is it? It doesn’t mean that your income can now take care of all your relatives in the family who still have problems. It doesn’t mean that in your household, you don’t have problems of people not being employed, but you have this cake that you’re sharing. Now, what happens if we add three more people? Suppose, as a family, you marry another wife and you add one wife and three more children. How many are you now?  (Answer: Seven). This is the cake. What will happen if this cake doesn’t grow? All of you will be suffering. Isn’t it? When you marry that wife and have more children, or even if you have four and you have another three or four; you will want your cake to grow. That is the same way we want GDP to grow – right? So, this is the first cake. What happens if the cake doesn’t grow is that all of you will start suffering. [She takes up another cake].

Supposing you now have a bigger cake; put all the people on top and you now have the seven people; would you not be better off? What if you have an even bigger cake? You see this biggest cake? You can put so many more people on top. [Speaking to assistants to collect illustrative materials: “give me all the people, give them to me, all of them will be there”]. And what will happen? That means you will have even more food. So, is it not false when people say that growing the cake does not matter? It matters; because if you have the same cake and your size is growing, what will happen is that you become even poorer and poorer; isn’t it? If it is not growing, you will suffer even more. Now, Nigeria has a cake – our GDP – and our population is growing at 2.5% per annum. If we don’t grow this, we will stay with the same cake and it will become worse and worse. So what we want to do is grow this cake as fast as possible, as large as we can, while solving the other problems. Note that I didn’t say growing the cake solves all the problems; but if we don’t grow the cake, we are going to suffer.

So, don’t listen to those who say, “What is GDP growth – it doesn’t matter.” It is not true; it matters tremendously. It’s with this growing cake that you can now call those people in your family or village who say you are not helping them. Isn’t it? If your cake is growing, you can call them; help them with their health problems, help them with food, help them with other things. But if you say cake does not matter, then you cannot help them at all. This is what GDP growth is about. I want Nigerians to understand this so that we don’t have this challenge of, “What is GDP?” In fact, we need to grow at almost 8 to 10 percent per year. In fact, Vision 2020 projects 13 percent in order to solve unemployment and other problems that we have. I’m sorry I spent some time on this, but it’s about time for the Nigerian population to stop being deceived by people who are not telling them the truth about what happens in the economy.

Now, let me quickly pass to other things. The first thing this country does, of course, is prepare the budget and everybody knows about it; to manage the finances and we have the DG Budget here. We’ve had problem with getting budget preparation done on time, and I want to say that for the first time, the 2013 Budget was prepared in record time and also passed by the National Assembly in record time on 20th December 2012, just before Christmas. Now, this should give us the year to implement; but of course, you know that we have some challenges with implementation and some things that we need to agree with the National Assembly in order to make the budget hold. For this year, we have been working on it but it has not stopped us from moving forward. We released first quarter capital – 400 billion; didn’t we? And work is going on. We released second quarter capital – 200 billion – so we will continue to implement to the best our ability, and it’s the job of Finance to make sure that we get that money in.

But the money that we get in also depends on what happens with the sectors of the economy. So, Finance does not print money. We don’t manufacture money. We only can disburse money that comes into our coffers; that the country genuinely earns from its oil and gas, from agriculture, from all the other aspects, the money it gets from taxes that it collects even on non-oil revenue and Customs taxes. So, once we get all those in, we disburse them. But if anything happens and we experience a shock, for example, this year, Customs is a little bit down in terms of collection because importation has come down, especially importation of rice; partly because we are growing our own, more of it as we said in the midterm report; but also because people stocked up last year in anticipation of what would happen. So, when we have these things happening, then the income reduces and Finance has to manage whatever comes in. So, I want people to know when they’re feeling very stressed out that there’s not enough money, Finance does not have money hidden somewhere in the safe; it is what it gets that it disburses.

Now, let me move quickly to one of the things we have delivered. Nigerians have complained that the cost of government is too high; we are spending too much on recurrent budget. What have we developed in Finance? With the support of the President and all of you, we’ve managed to take expenditures down from 74% recurrent of the total budget to 68% in 2013, and we’ll continue to take it down to the best of our ability. We have the envelope system. People don’t understand it but it enables us to engage other ministries and agencies in the management and setting of the budget. That allows them to put forward their priorities in a way that we can engage them in a conversation and to prioritise especially in terms of completing uncompleted projects of which we have about six thousand in this country and these are some of the systems that we’ve put in place to make that work. I talked a little while ago about the fact that imports are down. Whilst that means that some of our revenue are down, but we’re happy because we want to diversify this economy. Nigerians don’t want to keep importing. So, non-oil imports have decreased – things like textiles, plastic, rubber – things we’re making here; and those things have even increased in terms of exports. I’m sure that the Minister of Trade and Investment will say more about that. But I also want to mention our waiver and tariff policies to just let you know that Mr President has insisted on a policy of not doing individual waivers. So this ministry is doing sectoral waivers. When we give a waiver now, it is to encourage a whole sector not just to encourage an individual; and those kinds of policies; we’ve done them for aviation, for agriculture, for solid minerals. They can import spare parts and equipments at zero duty. And this is all designed to spur the rest of our economy.

Quickly, let me move on to talk about debt. On Friday, I think it was on the back page of This Day, I wrote an article about our debt because there are so many misconceptions about it. I want you to know that no one in government – neither Mr President nor the Ministry of Finance, the debt management office and the legislature – we don’t support that Nigeria becomes an indebted country again. So, what are we doing? The ministry is delivering a very prudent and strategic debt management approach to the country. I want you to look at some of the numbers. You know, we say that our national debt is low; and that is true because if you measure us against so many indicators you will see. If you look at that, you will see that domestic debt is really the issue. And if you look at the flow of domestic borrowing, you will see that it spiked in 2010 where we increase salary by 53% at once.

Now, I’m not against increase of salary, so don’t let anybody go from here and misquote me. But it has implications; and in order to cover it, domestic borrowing spiked. Bonds had to be floated. It’s not that good to borrow for things like recurrent expenditure and consumption. So, part of our new strategy is not to do that; to start lowering domestic borrowing. One of the things Mr President said to us is, we have to bring it down and we’re doing it. From N852 billion in 2011, we went down to N744 in 2012, and for 2013 budget, I think to N588 billion, and we’ll continue to bring it down. That’s part of the new strategy.

At the same time, we’re slowing down the growth of the debt stock. So, it’s not that the debt stock won’t grow, but it will grow much more slowly than before; and you can see it. The debt stock, total debt is now at about 7.5 trillion naira made up of 6.49 trillion domestic and about 1.0 trillion external and we will slow that down by trying to retire the bonds that are coming due instead of rolling them over at high interest rates. I’m very proud to say that in 2013 we retired 75 billion in bonds and that’s the first time we’ve done it in so many years. That is part of the overall strategy.

The last part is that we have also developed a sinking fund and every year we put in 25 billion in it so that we can continue to retire this debt and not grow it at a very fast pace. We will be borrowing, but it will be for very prudent things that really make a difference on the ground for Nigerians and it will be at a much slower pace. Now, quickly, the ministry has worked hard – Federal Inland Revenue Service, the Customs Service – to try and bring in more revenue into our coffers. And of course, they face challenges. We have to improve in terms of our tax collection and I want to tell you that we are launching a tax drive for non-oil revenue taxes to increase; and you will be seeing very soon, adverts from FIRS to push this on. The Customs is also modernising its operations with an objective to become a modern Customs system that can manage destination inspection and all the things that Customs does by the end of this year.

The objective is that we shouldn’t only look at the expenditure side all the time, we must also look at growing our revenues in the country; and this is what Finance has done.

I want to spend just one minute before handing over to my colleague on a few things that Finance is delivering to make public financial management more efficient and more transparent. We have to step away from the manual management of our finances whereby, for instance, for payments, we used to send money in bulk to ministries to pay their staff, to pay for their expenses. We have now put in place three electronic platforms that we are introducing and implementing at the moment. The Integrated Personnel and Payroll Management System is in place and it is allowing us to pay staff straight through biometric data means, we can check and pay them directly. Now, we haven’t done all MDAs; we’ve done about 215 and this exercise has helped us weed out about 45,000 ghost workers and save ourselves about 118 billion naira. That’s a lot of money.

Now, people say to me, where are these ghost workers and who is responsible? I just want to say here that we’ve looked and we’ve found that in almost every ministry, department and agency we had series of these ghost workers and it is identifying who to pinpoint, that’s what we’re looking at now. But it is very difficult because with people coming and going within ministries, it is not easy. The important thing we are facing is to get them out so we can save the money and put in place systems to make sure that this does not occur. That’s what Finance is doing.

We still have to complete the rest of the MDAs by the end of this year. We’ve also put in place a government integrated financial management system and, in the beginning, this has slowed down the transfer of resources to ministries. Bear with us, this will improve. But what this means is that transparently we can connect the MDAs, be able to see all our money and be able to pull it back. So, all those who may be contemplating this, I think you should revise your thinking because transparency is on the way.

Now, to stem leakages and improve our finances, we also worked very hard in the ministry to totally change the way we do business in terms of paying subsidies. We audited N1 trillion in subsidy payments under the presidential task force led by Aig Imokhuede, and we found N32 billion questionable. We have recovered N14 billion as we speak and we have tightened the payment process, so that there is more independent verification of how that is being done. The other thing the ministry has delivered is the cleaning up of the contributory pension scheme. This is something very painful to Nigerians that they would work and then people would steal the money that should be for their pension in their old age. This is not acceptable. So, to reform this, the President gave us permission to implement a section of the Pensions Reform Act which had hitherto been blocked; it had not been implemented, to bring all these pensions – the defined benefit systems – under one roof, under a pension transition administration department, and that will enable us to keep a hold on this fraud and to keep it at bay because these things will be managed under one roof transparently. The implementation of this is now underway.

The contributory pension scheme is fine, we have more than N3 trillion there, it’s working well and I want to reassure Nigerians of its good health. So, it’s only people who are still under the old scheme which we are reforming that are affected. We are implementing a more transparent system. Within the next six months, by God’s grace, we’ll have everything together with biometric systems in place so we can also pay our pensioners directly.

So, let me just say to you that all this, as was said by the Minister of Information, have been validated; all these things we’re doing, which amalgamate to underpin a stable economy have been validated outside. You don’t have to listen to me or Mr President or even the Minister of Information. Just check what the rating agencies are doing. Nigeria is one of the few countries being upgraded and rated as stable in an environment where other countries, including some close to us here in Africa, are being downgraded, and I think that Nigerians, even if you’re critical of government, you have to accept external evidence that we have a stable economy. The grading does not say that we’ve solved all the problems of our economy – no country ever does that – but it says that we’ve got the platform with which to do it.

Now, just before I hand over, I want to say one word on SURE-P, the subsidy reinvestment program. We promised Nigerians, at Ministry of Finance, that we will share with them the money that comes into this program transparently and what it is being used for transparently so that they will see because Nigerians were sceptical that this money will be put to good use. You can see on the screen. We have published every single month; we’ve kept faith with Nigerians. Every single month in the newspapers, we publish how much money comes in and you can see that; in 2012, N180 billion came in to Federal Government, the states got N154.6 billion, local governments, N76.4 billion. In January to May 2013, we have received N75 billion, state governments N64.4 billion, local governments N31.8 billion so far, and we have been publishing it.

And what has it been used for? We said, go and check for yourselves. We have used it for social safety nets for our women and children, to strengthen and improve immunisation for our children, to strengthen and improve safe delivery for our women. I know that no man here wants his wife to die; no woman wants to die in child birth. We have the names of every woman in every ward that has benefitted from this scheme. So, for those who say, “Ah, no one in my place has benefitted” you can verify it. We have it. If you want it, ask me. I will give it to you so you can check that people are really benefitting and they’re getting cash transfers.

When they come for pre-natal care, they get cash transfer of two thousand naira. When they come to have attended delivery, when the child is brought for immunisation; that is what we call conditional cash transfer program and, so far, in the present Saving One Million Lives program, more than 400,000 women’s lives and children’s lives have been saved through the money used by SURE-P.

In addition to that, we have been working on transportation and I know you heard from the Minister of Transport on roads and bridges built using this money; so I will not dwell on it. My intent was from the Finance point of view to just show you that we kept faith with Nigerians, we have been transparent, you can verify and we’ll be happy to give you all the information.

Let me now call on the Honourable Minister of State (Finance) to talk about the other things we have been doing in the financial sector.

Minister of State Takes Over
Courtesies.

I am also not going to waste time. I am going to talk about what the ministry has been doing to actually ensure that we have reformed the financial sector. All the banks in Nigeria are fully capitalised. And we’re also happy today that the level of non-performing loan has come down to only 5%. Nigerian banks are the healthiest you can find in Africa and this has been shown. You remember 3–4 years back, most of the banks have reported losses, but today they are reporting profits that they never reported prior to 2008. And for those who have been following, the highest profit ever recorded in the history of Nigerian banking system was reported last year – N97.58 billion made by Guaranty Trust. You look at Zenith making 90 billion. Profitability has returned to the Nigerian financial system and people can now safely go and get finances.

The problem we have is the cost of borrowing. After now, interest rate is relatively high and we need to have lasting solution for it. That’s why we’re now restructuring and strengthening our development financing institutions so that they can give concessional loans to the critical sectors of the economy. To strengthen them again, the President set up a committee to look at how to solve the problem of development lending and we are going to establish a wholesale development finance institution that will be well capitalised which will lend wholesale money to the development institutions so that they can lend to the real sector. We are also inviting the private sector to come and invest in some of our development institutions. As you can see already, our infrastructural bank has some private sector and we are now trying to make sure that we get some private sector capital into that of agriculture.

Back to the capital market, last year, Mr President magnanimously approved forbearance to all our stockbrokers. Our stockbrokers are those who actually make the market perform and all of them have lost their capital. Most of the borrowing they did, they actually put in their money to borrow on the margin. They lost that investment. Yet, as far as the banks are concerned, they have to pay the nominal value of the debt while the real value of the shares that are underlying the debt are almost 20% of the loss they have taken. There is no way the capital market will actually progress with that kind of situation. Mr President magnanimously approved that forbearance and our stockbrokers are now healthy. They are now relieved of all these debts, they are now free to borrow more. And they’ve also regained confidence that yes, the Nigerian government can really support the stock broking companies, and you know that 60% of the money comes from international portfolio investors. Now, what we have done to our own domestic companies told them that we are really out to support our people. Therefore, they have more confidence in our market; money is now flowing.

From last year when we got the forbearance to date, the capitalisation of the market has increased by 70%. This has never been recorded anywhere. Everybody knows that in Nigerian insurance, you only do it under compulsion because people don’t have any confidence in the insurance sector. We know that this is a big problem and we went ahead to strengthen the regulatory authorities in order to bring sanity to the insurance sector. One thing we did in insurance, people just hook policies, report their own premium and declare profits where cash is not collected. So we came with No Premium, No Cover policy. At first, most of the brokers were not happy because the broker wants to make his money whether the man pays his premium or not. But today we say No, if you take insurance cover, nobody should recognise income unless cash is paid. So now, insurance is done on cash basis. Last year, we had a backlog of unpaid insurance of N55 billion; today, it is zero. All insurance are cash covered and that gives confidence to the policy holders.

When we came in, we had only 700 thousand. Now we have about 1.5 million policy holders and more equity is coming from abroad. We now have a lot of FDIs. About 10 companies have come into Nigeria and Nigerian companies can now even give insurance cover to oil and gas sector. There is 48% local retention of all the policies issued in that sector and this has actually improved our insurance industry and it will enable the industry to raise a lot of resources because in some countries, insurance companies have more money than banks. They even fund banks. We are encouraging our own so that they grow and we mobilise enough resources for investment in the real sector.

Another function we do is to ensure that all federally collected revenues are distributed to the three tiers of government according to the revenue sharing formula. In the past, FAC actually made it acrimonious; a lot of issues were there. We actually ensured that all outstanding issues that we met have been cleared. Today, when we come to FAC, we have turned it into committee where problems are solved, to committees where we educate ourselves, where we encourage others to copy the good practices of other states. We do peer comparison and we also ensure that we adopt the best practices and that’s why we’re just introducing the IPSAS – the International Public Sector Accounting Standards which all the states, parastatals and Federal Government are going to adopt so that our accounts are transparent and comparable to others. We have already ensured that we always hold FAC on time because holding FAC on time has a very serious implication on payment of salaries. And you know in Nigeria, unless salary is paid on time, workers are not happy. And you can agree with me that today, our workers are happy because we ensure that at least, Federal Government workers get their salary before 20th of every month and now with the electronic payment system, it is now – at least some get about 18th or 19th of the month and this has brought relative industrial harmony to Nigeria.

We also have a skill in the Federal Ministry of Finance for encouraging export of non-oil products. Before, few people know about the Export Expansion Grant. What we do, is in order to diversify the economy away from oil, all non-oil exporters get a grant based on the export proceed that they expatriated back. So, if you now produce anything non-oil and export, when you bring the money back we calculate based on certain parameters and you can get as much as 20% of the value of your export being given to you free by the government. Why are we doing that? It is because the cost of production in Nigeria is higher than the cost of production internationally. So, we have to make up for the cost of production to make our own manufacturers competitive. We have been doing that, yet we have some glut. We have the glut because growth in export has been growing very fast and we have to revise the system. We have parameters we have actually looked at and we realise that export growth is no more our problem in Nigeria because the target we set for our exporters; 71% of all exporters are growing higher than 10% every year. So, that has been solved. Re-investment of export growth; also 68.9% of our exporters are re-investing the money they get from the bank to develop their own companies. So, that is not also our problem.

Today in order to get the EEG (export expansion grant), you have to do well in the area of employment and you have to do well in the area of value addition. We are now reducing the weight for export and retention because we have already succeeded there. I think I will call on the CME to continue.

CME Continues

OK. Let me round off very quickly for Finance, because Minister of Information is telling me we need our own day. Let me just mention a couple of other areas quickly. The ministry supports; we are of finance but we’re also about making sure that the real sectors of the economy work. So in addition to the budget which we manage, we also have the task of mobilising resources for the sectors of the economy and I’m not going to go through all that I wrote; they can quickly roll it through the screen.

I’m very proud to announce that we have been very active to mobilise – sometimes zero interest – very low interest concessional financing for our sectors; money that is zero interest, 40 years to repay, 10 years of grace – the type that you cannot find easily anywhere. So we have been very careful to do that and 12 billion dollars worth, almost every sector. Agriculture – from China Exim Bank, from the World Bank, we have mobilised money. Environment: 450 million from the World Bank for environmental issues; transport. You know, we’re doing even guarantees so that we can have some of our infrastructure developed; for example, a letter of comfort to develop the Lekki deep sea port. So when you see all these things being developed, you know that Finance has done some work to make resources available or guarantees that make it work. Second Niger bridge – we’re now working on a private-public partnership arrangement where we’re going to co-invest with some investors that have been identified from outside with PPP to make sure that this bridge gets built. As we speak, they’re already on site trying to do some of the initial groundwork. We work with the World Bank, the African Development Bank, the Islamic Development bank and other banks to try to make this happen.

So, you can see, in health, in power, we are going to go to the market very soon to raise a Eurobond of about a billion dollars for the power sector. We know that power is what we need in this country; that’s what we have focused on. So, all that money will make gas available to fire the power and the emergency gas plan of the Minister of Petroleum Resources has already been yielding results in terms of making gas available to make our power situation better. But we want to support them to improve even more. So, we raise resources for that.

And the education sector – we’ve also raised money for states that have challenges: Bauchi, Ekiti, Anambra – so many of the states to benefit from that. In ICT we’ve raised resources. And aviation, housing – I can just say almost every sector of the economy – I’m proud to say we’ve done that. The Nexim Bank has also used resources to support trade for our economy; export-import bank which is under the Ministry of Finance. Let me just mention one interesting thing. We have supported the empowerment of women in the ministry through devoting some resources – 3 billion naira – to specific programs in five pilot ministries like Agriculture, Health, Water Resources, ICT and so on that focus on works, focus on delivering for women. For example, the Ministry of Works said that they will make more women contractors, sub-contractors. They will increase the number that will get contracts and jobs because women are not favoured and we have said that when they do it, we will support them with additional disbursement from this N3 billion. So we are encouraging support for women within this budget and that is something that the President really supports. So, these are some of the things we are doing.

Finally, we are supporting job creation. We are managing some job creation programmes apart from what we are doing for the real sectors of the economy, mobilising money for them in addition to the budget to create jobs like the 3.5 million jobs targeted by Agriculture in 2015. It’s the resources we help mobilise that will help them deliver that. But we are also managing some direct job creation being undertaken and implemented by government. Just a couple of examples which you know – we have the program that was mentioned by the Honourable Minister of Information, the YouWIN program of Mr President – this is his program – and I’m happy to tell you this is one of the most popular programs in Nigeria. From the first round we did, we have already created 14,000 jobs all over all parts of the federation. This is just the first survey. The second survey, maybe another 14,000 – that’s almost 30,000. The second round we just launched for women only and the third round we’re going to launch for men and women, the target of 80,000 to 110,000 jobs is easily reachable.

This program is surpassing our expectations in terms of job creation and we’re very proud of our young entrepreneurs who are doing this. We are also managing the Graduate Internship Program. Our objective there is to place 50,000 graduate interns with private sector. Over 1,000 private sector firms have applied. We have placed so far 1,309 graduates and we’re working very hard to speed up to place all the 50,000 who have been processed as qualified to participate in this scheme. And of course, we were previously supporting the community services program designed to create 370,000 jobs a year. We’ve moved that to the ministry of labour now, but I want to tell you that 178,000 jobs have already been created. And people who have seen these people working in the field, building ditches, doing drains, maintaining buildings have reported that they’re there and the jobs are real. So, these are some of the things that we have tried to do within the ministry to support the job creation agenda. I could go on and on.

We actually need more time but let me just stop here and say that Ministry of Finance is a multi-faceted ministry that is delivering day by day on the budget, on the additional finances for the sectors of the country, on managing direct job creation programs and on supporting the sectors – I haven’t even told you the things we do to support power through the bulk trader, to manage the debts of NEMCO, to push the various sectors along. We are doing so much more than we have time to share today and we are achieving results.

Thank you very much.

A Transcript Of The Speech Of Dr. Mrs. Ngozi Okonjo-Iweala,  Minister Of Finance And Coordinating Minister Of The Economy, Nigeria, At The Ministerial Platform Held At Radio House, Abuja On Monday, June 11, 2013
Full Transcript Of My Presentation At The Ministerial Platform By  Ngozi Okonjo-Iweala
Thank you very much to the Honourable Minister of Information for that very rousing welcome and for hosting us for this event.

For my colleague, the Honourable Minister of Sports, I don’t think it’s coincidental that Sports and Finance are together today, because I’d always joked that if I was not the Minister of Finance, I’d love to be the Minister of Sports. So, I totally envy him in his job, especially now that we’re winning.

And to my colleagues, the Honourable Minister of State (Finance), the Perm Sec., and all the members of the audience here; I want to say that we’re going to handle our presentation in such a way that I will start up, pass to my minister of state and then he will pass back to me to round off. And I can’t start this without first acknowledging the support of the President to the Ministry of Finance. It’s not an easy ministry to run, as you all know. Nobody likes Finance because everybody likes to say they never have enough. So, we are grateful for the support. We are also very proud of our staff in the Ministry of Finance – the budget office, the Accountant-General’s office; and I want to thank them openly because, without their dedication and good work, we would not be able to accomplish what we have today. So, what I’m going to tell you, some of it you may have heard when Mr President presented his mid-term report and score card, but it bears repeating. And some will be additional expatiation on that; or new information.

I want to begin with what it is that the Ministry of Finance does. I want to remind people of our mission. Our mission is to manage the nation’s finances in an open, transparent, accountable and efficient manner that delivers on the country’s development priorities. There are four basic things we do in managing these finances and helping to manage the economy. The first is macroeconomic management. It’s the job of the Ministry of Finance, working with the Central Bank, to have a stable macro-economy. If there’s no stability, if things are moving, exchange rate is volatile, inflation is high – we have experienced it in this country before – what happens? You cannot even begin to think of development of the economy. So, that’s one of our jobs.

The other, of course, is managing the finances and mobilising finances for the real sector of the economy; meaning the other sectors that create jobs can grow. Then we also have the job of supporting enabling reforms that make this economy move. And finally, we have the job of supporting job creation indirectly and directly. So, we’re going to talk about what the Ministry of Finance does and has achieved in those four areas.

Let me start with something that we said during the mid-term report. The first is, on the macro-economy, I want to report that the economy is strong and stable. But of course, it faces challenge of inequality and inclusion; meaning that even though the economy is strong, we have problems with jobs and unemployment. We have problems with working to eradicate poverty. We need to move faster. We need to grow faster in order to tackle these problems. So, we are not saying that everything is solved, or that everything is great, but it’s strong; and that stability provides the platform on which we can use to solve the other problems.

What do I mean? We talked before that if you notice – everybody follows the exchange rate between the dollar and the naira – it has been relatively stable in these past two years at 155 to 160. At least, that is something you can evidence for yourself and attest to. It has been stable because we have also been able to accumulate reserves. People wonder why we are saving these reserves that are now almost $50 billion – we’re at $48 billion now. It’s very important because the reserves are what make the exchange rate stable. When the reserves are going down, that’s when you experience that instability and people can come and attack your currency. So, we have managed, working with the Central Bank – I also want to give them credit for good monetary policy – to be able to grow these reserves, stabilise, so that now, we have an exchange rate that can allow people to plan and allow people to do their work. As the Honourable Minister of Information said, inflation is coming down; from about 12.4% in May 2011, it has slowed to about 9.1% now and these all form the bedrock of this stability.

We have made savings. Part of our reserves is also the Excess Crude Account savings that we talk about. We have had about $4 billion in May 2011. We grew it to about 9 billion dollars equivalent at the end of 2012, and now we’re about $6 billion. Why are we down? Because the Excess Crude Account helps us to manage the economy and keep growing even when we experience shocks like when oil production comes down because of either oil theft, or leakages from pipelines and so on. You know, the money we have saved enables this country to keep going and we have enough to keep us going even in the face of shocks for another four to five months whilst we try to solve our problems. This is something that Nigeria did not have before and we are very proud of it. In the past, when we experience shocks, what did we do? We would have to go to the IMF or World Bank to go and look for money – the IMF in particular to shore up the economy, to shore up our balance of payments (that’s what economists call it). But now, even through all the ups and downs that we have experienced, have we gone there? No. Because Nigeria has now put itself – with the existence of this Excess Crude Account – in a position where in the event of any shock, we can go there to stabilise ourselves. That’s why Nigerians must support this account, the saving of this money; the Sovereign Wealth Fund. This country like a family must be able to put money aside so that if you experience shock, you don’t go around begging, you can stabilise yourself with your own savings. That’s what we manage to do.

The second thing I want to talk about is about GDP growth. This stability has enabled the economy to grow. Certain sectors are growing – I will come to that. Overall, this economy is growing and growth is projected at 6.75% by us; by the National Bureau of Statistics in 2013. Even the IMF has projected higher growth, but we’re being very cautious. Over there [referring to a slide], you will see how we compare with some other countries; with the whole of sub-Saharan Africa, they are growing at 5.6%, so we are much higher; even the emerging markets, we’re higher than them. And you can see Brazil, China, South Africa – South Africa at 2.8%, we at 6.75% et cetera – so we are doing well!

The GDP Illustration
Now, I want to spend one minute on something very important, because after we talk, people will say, “GDP growth, what is GDP growth? It’s not important; that’s not what we will eat.” But let me explain to you that without that growth, you cannot even begin to solve the problems of this economy. Let me illustrate to you. [She picks up a cake]. This cake symbolises our income, our GDP or your income within your household. GDP is nothing but the income of the country – the amount of cake you have to eat; you and your wife and children – the same with a country. So, let’s say this is the amount of cake we have to eat.

Now, these are four people sharing this cake – four people: a man, his wife and two children, or Nigeria with a population of let’s say 167 million people. So, this is the cake we have. You have this cake. Having this cake does not mean that every problem in your household is solved. Is it? It doesn’t mean that your income can now take care of all your relatives in the family who still have problems. It doesn’t mean that in your household, you don’t have problems of people not being employed, but you have this cake that you’re sharing. Now, what happens if we add three more people? Suppose, as a family, you marry another wife and you add one wife and three more children. How many are you now?  (Answer: Seven). This is the cake. What will happen if this cake doesn’t grow? All of you will be suffering. Isn’t it? When you marry that wife and have more children, or even if you have four and you have another three or four; you will want your cake to grow. That is the same way we want GDP to grow – right? So, this is the first cake. What happens if the cake doesn’t grow is that all of you will start suffering. [She takes up another cake].

Supposing you now have a bigger cake; put all the people on top and you now have the seven people; would you not be better off? What if you have an even bigger cake? You see this biggest cake? You can put so many more people on top. [Speaking to assistants to collect illustrative materials: “give me all the people, give them to me, all of them will be there”]. And what will happen? That means you will have even more food. So, is it not false when people say that growing the cake does not matter? It matters; because if you have the same cake and your size is growing, what will happen is that you become even poorer and poorer; isn’t it? If it is not growing, you will suffer even more. Now, Nigeria has a cake – our GDP – and our population is growing at 2.5% per annum. If we don’t grow this, we will stay with the same cake and it will become worse and worse. So what we want to do is grow this cake as fast as possible, as large as we can, while solving the other problems. Note that I didn’t say growing the cake solves all the problems; but if we don’t grow the cake, we are going to suffer.

So, don’t listen to those who say, “What is GDP growth – it doesn’t matter.” It is not true; it matters tremendously. It’s with this growing cake that you can now call those people in your family or village who say you are not helping them. Isn’t it? If your cake is growing, you can call them; help them with their health problems, help them with food, help them with other things. But if you say cake does not matter, then you cannot help them at all. This is what GDP growth is about. I want Nigerians to understand this so that we don’t have this challenge of, “What is GDP?” In fact, we need to grow at almost 8 to 10 percent per year. In fact, Vision 2020 projects 13 percent in order to solve unemployment and other problems that we have. I’m sorry I spent some time on this, but it’s about time for the Nigerian population to stop being deceived by people who are not telling them the truth about what happens in the economy.

Now, let me quickly pass to other things. The first thing this country does, of course, is prepare the budget and everybody knows about it; to manage the finances and we have the DG Budget here. We’ve had problem with getting budget preparation done on time, and I want to say that for the first time, the 2013 Budget was prepared in record time and also passed by the National Assembly in record time on 20th December 2012, just before Christmas. Now, this should give us the year to implement; but of course, you know that we have some challenges with implementation and some things that we need to agree with the National Assembly in order to make the budget hold. For this year, we have been working on it but it has not stopped us from moving forward. We released first quarter capital – 400 billion; didn’t we? And work is going on. We released second quarter capital – 200 billion – so we will continue to implement to the best our ability, and it’s the job of Finance to make sure that we get that money in.

But the money that we get in also depends on what happens with the sectors of the economy. So, Finance does not print money. We don’t manufacture money. We only can disburse money that comes into our coffers; that the country genuinely earns from its oil and gas, from agriculture, from all the other aspects, the money it gets from taxes that it collects even on non-oil revenue and Customs taxes. So, once we get all those in, we disburse them. But if anything happens and we experience a shock, for example, this year, Customs is a little bit down in terms of collection because importation has come down, especially importation of rice; partly because we are growing our own, more of it as we said in the midterm report; but also because people stocked up last year in anticipation of what would happen. So, when we have these things happening, then the income reduces and Finance has to manage whatever comes in. So, I want people to know when they’re feeling very stressed out that there’s not enough money, Finance does not have money hidden somewhere in the safe; it is what it gets that it disburses.

Now, let me move quickly to one of the things we have delivered. Nigerians have complained that the cost of government is too high; we are spending too much on recurrent budget. What have we developed in Finance? With the support of the President and all of you, we’ve managed to take expenditures down from 74% recurrent of the total budget to 68% in 2013, and we’ll continue to take it down to the best of our ability. We have the envelope system. People don’t understand it but it enables us to engage other ministries and agencies in the management and setting of the budget. That allows them to put forward their priorities in a way that we can engage them in a conversation and to prioritise especially in terms of completing uncompleted projects of which we have about six thousand in this country and these are some of the systems that we’ve put in place to make that work. I talked a little while ago about the fact that imports are down. Whilst that means that some of our revenue are down, but we’re happy because we want to diversify this economy. Nigerians don’t want to keep importing. So, non-oil imports have decreased – things like textiles, plastic, rubber – things we’re making here; and those things have even increased in terms of exports. I’m sure that the Minister of Trade and Investment will say more about that. But I also want to mention our waiver and tariff policies to just let you know that Mr President has insisted on a policy of not doing individual waivers. So this ministry is doing sectoral waivers. When we give a waiver now, it is to encourage a whole sector not just to encourage an individual; and those kinds of policies; we’ve done them for aviation, for agriculture, for solid minerals. They can import spare parts and equipments at zero duty. And this is all designed to spur the rest of our economy.

Quickly, let me move on to talk about debt. On Friday, I think it was on the back page of This Day, I wrote an article about our debt because there are so many misconceptions about it. I want you to know that no one in government – neither Mr President nor the Ministry of Finance, the debt management office and the legislature – we don’t support that Nigeria becomes an indebted country again. So, what are we doing? The ministry is delivering a very prudent and strategic debt management approach to the country. I want you to look at some of the numbers. You know, we say that our national debt is low; and that is true because if you measure us against so many indicators you will see. If you look at that, you will see that domestic debt is really the issue. And if you look at the flow of domestic borrowing, you will see that it spiked in 2010 where we increase salary by 53% at once.

Now, I’m not against increase of salary, so don’t let anybody go from here and misquote me. But it has implications; and in order to cover it, domestic borrowing spiked. Bonds had to be floated. It’s not that good to borrow for things like recurrent expenditure and consumption. So, part of our new strategy is not to do that; to start lowering domestic borrowing. One of the things Mr President said to us is, we have to bring it down and we’re doing it. From N852 billion in 2011, we went down to N744 in 2012, and for 2013 budget, I think to N588 billion, and we’ll continue to bring it down. That’s part of the new strategy.

At the same time, we’re slowing down the growth of the debt stock. So, it’s not that the debt stock won’t grow, but it will grow much more slowly than before; and you can see it. The debt stock, total debt is now at about 7.5 trillion naira made up of 6.49 trillion domestic and about 1.0 trillion external and we will slow that down by trying to retire the bonds that are coming due instead of rolling them over at high interest rates. I’m very proud to say that in 2013 we retired 75 billion in bonds and that’s the first time we’ve done it in so many years. That is part of the overall strategy.

The last part is that we have also developed a sinking fund and every year we put in 25 billion in it so that we can continue to retire this debt and not grow it at a very fast pace. We will be borrowing, but it will be for very prudent things that really make a difference on the ground for Nigerians and it will be at a much slower pace. Now, quickly, the ministry has worked hard – Federal Inland Revenue Service, the Customs Service – to try and bring in more revenue into our coffers. And of course, they face challenges. We have to improve in terms of our tax collection and I want to tell you that we are launching a tax drive for non-oil revenue taxes to increase; and you will be seeing very soon, adverts from FIRS to push this on. The Customs is also modernising its operations with an objective to become a modern Customs system that can manage destination inspection and all the things that Customs does by the end of this year.

The objective is that we shouldn’t only look at the expenditure side all the time, we must also look at growing our revenues in the country; and this is what Finance has done.

I want to spend just one minute before handing over to my colleague on a few things that Finance is delivering to make public financial management more efficient and more transparent. We have to step away from the manual management of our finances whereby, for instance, for payments, we used to send money in bulk to ministries to pay their staff, to pay for their expenses. We have now put in place three electronic platforms that we are introducing and implementing at the moment. The Integrated Personnel and Payroll Management System is in place and it is allowing us to pay staff straight through biometric data means, we can check and pay them directly. Now, we haven’t done all MDAs; we’ve done about 215 and this exercise has helped us weed out about 45,000 ghost workers and save ourselves about 118 billion naira. That’s a lot of money.

Now, people say to me, where are these ghost workers and who is responsible? I just want to say here that we’ve looked and we’ve found that in almost every ministry, department and agency we had series of these ghost workers and it is identifying who to pinpoint, that’s what we’re looking at now. But it is very difficult because with people coming and going within ministries, it is not easy. The important thing we are facing is to get them out so we can save the money and put in place systems to make sure that this does not occur. That’s what Finance is doing.

We still have to complete the rest of the MDAs by the end of this year. We’ve also put in place a government integrated financial management system and, in the beginning, this has slowed down the transfer of resources to ministries. Bear with us, this will improve. But what this means is that transparently we can connect the MDAs, be able to see all our money and be able to pull it back. So, all those who may be contemplating this, I think you should revise your thinking because transparency is on the way.

Now, to stem leakages and improve our finances, we also worked very hard in the ministry to totally change the way we do business in terms of paying subsidies. We audited N1 trillion in subsidy payments under the presidential task force led by Aig Imokhuede, and we found N32 billion questionable. We have recovered N14 billion as we speak and we have tightened the payment process, so that there is more independent verification of how that is being done. The other thing the ministry has delivered is the cleaning up of the contributory pension scheme. This is something very painful to Nigerians that they would work and then people would steal the money that should be for their pension in their old age. This is not acceptable. So, to reform this, the President gave us permission to implement a section of the Pensions Reform Act which had hitherto been blocked; it had not been implemented, to bring all these pensions – the defined benefit systems – under one roof, under a pension transition administration department, and that will enable us to keep a hold on this fraud and to keep it at bay because these things will be managed under one roof transparently. The implementation of this is now underway.

The contributory pension scheme is fine, we have more than N3 trillion there, it’s working well and I want to reassure Nigerians of its good health. So, it’s only people who are still under the old scheme which we are reforming that are affected. We are implementing a more transparent system. Within the next six months, by God’s grace, we’ll have everything together with biometric systems in place so we can also pay our pensioners directly.

So, let me just say to you that all this, as was said by the Minister of Information, have been validated; all these things we’re doing, which amalgamate to underpin a stable economy have been validated outside. You don’t have to listen to me or Mr President or even the Minister of Information. Just check what the rating agencies are doing. Nigeria is one of the few countries being upgraded and rated as stable in an environment where other countries, including some close to us here in Africa, are being downgraded, and I think that Nigerians, even if you’re critical of government, you have to accept external evidence that we have a stable economy. The grading does not say that we’ve solved all the problems of our economy – no country ever does that – but it says that we’ve got the platform with which to do it.

Now, just before I hand over, I want to say one word on SURE-P, the subsidy reinvestment program. We promised Nigerians, at Ministry of Finance, that we will share with them the money that comes into this program transparently and what it is being used for transparently so that they will see because Nigerians were sceptical that this money will be put to good use. You can see on the screen. We have published every single month; we’ve kept faith with Nigerians. Every single month in the newspapers, we publish how much money comes in and you can see that; in 2012, N180 billion came in to Federal Government, the states got N154.6 billion, local governments, N76.4 billion. In January to May 2013, we have received N75 billion, state governments N64.4 billion, local governments N31.8 billion so far, and we have been publishing it.

And what has it been used for? We said, go and check for yourselves. We have used it for social safety nets for our women and children, to strengthen and improve immunisation for our children, to strengthen and improve safe delivery for our women. I know that no man here wants his wife to die; no woman wants to die in child birth. We have the names of every woman in every ward that has benefitted from this scheme. So, for those who say, “Ah, no one in my place has benefitted” you can verify it. We have it. If you want it, ask me. I will give it to you so you can check that people are really benefitting and they’re getting cash transfers.

When they come for pre-natal care, they get cash transfer of two thousand naira. When they come to have attended delivery, when the child is brought for immunisation; that is what we call conditional cash transfer program and, so far, in the present Saving One Million Lives program, more than 400,000 women’s lives and children’s lives have been saved through the money used by SURE-P.

In addition to that, we have been working on transportation and I know you heard from the Minister of Transport on roads and bridges built using this money; so I will not dwell on it. My intent was from the Finance point of view to just show you that we kept faith with Nigerians, we have been transparent, you can verify and we’ll be happy to give you all the information.

Let me now call on the Honourable Minister of State (Finance) to talk about the other things we have been doing in the financial sector.

Minister of State Takes Over
Courtesies.

I am also not going to waste time. I am going to talk about what the ministry has been doing to actually ensure that we have reformed the financial sector. All the banks in Nigeria are fully capitalised. And we’re also happy today that the level of non-performing loan has come down to only 5%. Nigerian banks are the healthiest you can find in Africa and this has been shown. You remember 3–4 years back, most of the banks have reported losses, but today they are reporting profits that they never reported prior to 2008. And for those who have been following, the highest profit ever recorded in the history of Nigerian banking system was reported last year – N97.58 billion made by Guaranty Trust. You look at Zenith making 90 billion. Profitability has returned to the Nigerian financial system and people can now safely go and get finances.

The problem we have is the cost of borrowing. After now, interest rate is relatively high and we need to have lasting solution for it. That’s why we’re now restructuring and strengthening our development financing institutions so that they can give concessional loans to the critical sectors of the economy. To strengthen them again, the President set up a committee to look at how to solve the problem of development lending and we are going to establish a wholesale development finance institution that will be well capitalised which will lend wholesale money to the development institutions so that they can lend to the real sector. We are also inviting the private sector to come and invest in some of our development institutions. As you can see already, our infrastructural bank has some private sector and we are now trying to make sure that we get some private sector capital into that of agriculture.

Back to the capital market, last year, Mr President magnanimously approved forbearance to all our stockbrokers. Our stockbrokers are those who actually make the market perform and all of them have lost their capital. Most of the borrowing they did, they actually put in their money to borrow on the margin. They lost that investment. Yet, as far as the banks are concerned, they have to pay the nominal value of the debt while the real value of the shares that are underlying the debt are almost 20% of the loss they have taken. There is no way the capital market will actually progress with that kind of situation. Mr President magnanimously approved that forbearance and our stockbrokers are now healthy. They are now relieved of all these debts, they are now free to borrow more. And they’ve also regained confidence that yes, the Nigerian government can really support the stock broking companies, and you know that 60% of the money comes from international portfolio investors. Now, what we have done to our own domestic companies told them that we are really out to support our people. Therefore, they have more confidence in our market; money is now flowing.

From last year when we got the forbearance to date, the capitalisation of the market has increased by 70%. This has never been recorded anywhere. Everybody knows that in Nigerian insurance, you only do it under compulsion because people don’t have any confidence in the insurance sector. We know that this is a big problem and we went ahead to strengthen the regulatory authorities in order to bring sanity to the insurance sector. One thing we did in insurance, people just hook policies, report their own premium and declare profits where cash is not collected. So we came with No Premium, No Cover policy. At first, most of the brokers were not happy because the broker wants to make his money whether the man pays his premium or not. But today we say No, if you take insurance cover, nobody should recognise income unless cash is paid. So now, insurance is done on cash basis. Last year, we had a backlog of unpaid insurance of N55 billion; today, it is zero. All insurance are cash covered and that gives confidence to the policy holders.

When we came in, we had only 700 thousand. Now we have about 1.5 million policy holders and more equity is coming from abroad. We now have a lot of FDIs. About 10 companies have come into Nigeria and Nigerian companies can now even give insurance cover to oil and gas sector. There is 48% local retention of all the policies issued in that sector and this has actually improved our insurance industry and it will enable the industry to raise a lot of resources because in some countries, insurance companies have more money than banks. They even fund banks. We are encouraging our own so that they grow and we mobilise enough resources for investment in the real sector.

Another function we do is to ensure that all federally collected revenues are distributed to the three tiers of government according to the revenue sharing formula. In the past, FAC actually made it acrimonious; a lot of issues were there. We actually ensured that all outstanding issues that we met have been cleared. Today, when we come to FAC, we have turned it into committee where problems are solved, to committees where we educate ourselves, where we encourage others to copy the good practices of other states. We do peer comparison and we also ensure that we adopt the best practices and that’s why we’re just introducing the IPSAS – the International Public Sector Accounting Standards which all the states, parastatals and Federal Government are going to adopt so that our accounts are transparent and comparable to others. We have already ensured that we always hold FAC on time because holding FAC on time has a very serious implication on payment of salaries. And you know in Nigeria, unless salary is paid on time, workers are not happy. And you can agree with me that today, our workers are happy because we ensure that at least, Federal Government workers get their salary before 20th of every month and now with the electronic payment system, it is now – at least some get about 18th or 19th of the month and this has brought relative industrial harmony to Nigeria.

We also have a skill in the Federal Ministry of Finance for encouraging export of non-oil products. Before, few people know about the Export Expansion Grant. What we do, is in order to diversify the economy away from oil, all non-oil exporters get a grant based on the export proceed that they expatriated back. So, if you now produce anything non-oil and export, when you bring the money back we calculate based on certain parameters and you can get as much as 20% of the value of your export being given to you free by the government. Why are we doing that? It is because the cost of production in Nigeria is higher than the cost of production internationally. So, we have to make up for the cost of production to make our own manufacturers competitive. We have been doing that, yet we have some glut. We have the glut because growth in export has been growing very fast and we have to revise the system. We have parameters we have actually looked at and we realise that export growth is no more our problem in Nigeria because the target we set for our exporters; 71% of all exporters are growing higher than 10% every year. So, that has been solved. Re-investment of export growth; also 68.9% of our exporters are re-investing the money they get from the bank to develop their own companies. So, that is not also our problem.

Today in order to get the EEG (export expansion grant), you have to do well in the area of employment and you have to do well in the area of value addition. We are now reducing the weight for export and retention because we have already succeeded there. I think I will call on the CME to continue.

CME Continues

OK. Let me round off very quickly for Finance, because Minister of Information is telling me we need our own day. Let me just mention a couple of other areas quickly. The ministry supports; we are of finance but we’re also about making sure that the real sectors of the economy work. So in addition to the budget which we manage, we also have the task of mobilising resources for the sectors of the economy and I’m not going to go through all that I wrote; they can quickly roll it through the screen.

I’m very proud to announce that we have been very active to mobilise – sometimes zero interest – very low interest concessional financing for our sectors; money that is zero interest, 40 years to repay, 10 years of grace – the type that you cannot find easily anywhere. So we have been very careful to do that and 12 billion dollars worth, almost every sector. Agriculture – from China Exim Bank, from the World Bank, we have mobilised money. Environment: 450 million from the World Bank for environmental issues; transport. You know, we’re doing even guarantees so that we can have some of our infrastructure developed; for example, a letter of comfort to develop the Lekki deep sea port. So when you see all these things being developed, you know that Finance has done some work to make resources available or guarantees that make it work. Second Niger bridge – we’re now working on a private-public partnership arrangement where we’re going to co-invest with some investors that have been identified from outside with PPP to make sure that this bridge gets built. As we speak, they’re already on site trying to do some of the initial groundwork. We work with the World Bank, the African Development Bank, the Islamic Development bank and other banks to try to make this happen.

So, you can see, in health, in power, we are going to go to the market very soon to raise a Eurobond of about a billion dollars for the power sector. We know that power is what we need in this country; that’s what we have focused on. So, all that money will make gas available to fire the power and the emergency gas plan of the Minister of Petroleum Resources has already been yielding results in terms of making gas available to make our power situation better. But we want to support them to improve even more. So, we raise resources for that.

And the education sector – we’ve also raised money for states that have challenges: Bauchi, Ekiti, Anambra – so many of the states to benefit from that. In ICT we’ve raised resources. And aviation, housing – I can just say almost every sector of the economy – I’m proud to say we’ve done that. The Nexim Bank has also used resources to support trade for our economy; export-import bank which is under the Ministry of Finance. Let me just mention one interesting thing. We have supported the empowerment of women in the ministry through devoting some resources – 3 billion naira – to specific programs in five pilot ministries like Agriculture, Health, Water Resources, ICT and so on that focus on works, focus on delivering for women. For example, the Ministry of Works said that they will make more women contractors, sub-contractors. They will increase the number that will get contracts and jobs because women are not favoured and we have said that when they do it, we will support them with additional disbursement from this N3 billion. So we are encouraging support for women within this budget and that is something that the President really supports. So, these are some of the things we are doing.

Finally, we are supporting job creation. We are managing some job creation programmes apart from what we are doing for the real sectors of the economy, mobilising money for them in addition to the budget to create jobs like the 3.5 million jobs targeted by Agriculture in 2015. It’s the resources we help mobilise that will help them deliver that. But we are also managing some direct job creation being undertaken and implemented by government. Just a couple of examples which you know – we have the program that was mentioned by the Honourable Minister of Information, the YouWIN program of Mr President – this is his program – and I’m happy to tell you this is one of the most popular programs in Nigeria. From the first round we did, we have already created 14,000 jobs all over all parts of the federation. This is just the first survey. The second survey, maybe another 14,000 – that’s almost 30,000. The second round we just launched for women only and the third round we’re going to launch for men and women, the target of 80,000 to 110,000 jobs is easily reachable.

This program is surpassing our expectations in terms of job creation and we’re very proud of our young entrepreneurs who are doing this. We are also managing the Graduate Internship Program. Our objective there is to place 50,000 graduate interns with private sector. Over 1,000 private sector firms have applied. We have placed so far 1,309 graduates and we’re working very hard to speed up to place all the 50,000 who have been processed as qualified to participate in this scheme. And of course, we were previously supporting the community services program designed to create 370,000 jobs a year. We’ve moved that to the ministry of labour now, but I want to tell you that 178,000 jobs have already been created. And people who have seen these people working in the field, building ditches, doing drains, maintaining buildings have reported that they’re there and the jobs are real. So, these are some of the things that we have tried to do within the ministry to support the job creation agenda. I could go on and on.

We actually need more time but let me just stop here and say that Ministry of Finance is a multi-faceted ministry that is delivering day by day on the budget, on the additional finances for the sectors of the country, on managing direct job creation programs and on supporting the sectors – I haven’t even told you the things we do to support power through the bulk trader, to manage the debts of NEMCO, to push the various sectors along. We are doing so much more than we have time to share today and we are achieving results.

Thank you very much.

Thank you very much to the Honourable Minister of Information for that very rousing welcome and for hosting us for this event.

For my colleague, the Honourable Minister of Sports, I don’t think it’s coincidental that Sports and Finance are together today, because I’d always joked that if I was not the Minister of Finance, I’d love to be the Minister of Sports. So, I totally envy him in his job, especially now that we’re winning.

And to my colleagues, the Honourable Minister of State (Finance), the Perm Sec., and all the members of the audience here; I want to say that we’re going to handle our presentation in such a way that I will start up, pass to my minister of state and then he will pass back to me to round off. And I can’t start this without first acknowledging the support of the President to the Ministry of Finance. It’s not an easy ministry to run, as you all know. Nobody likes Finance because everybody likes to say they never have enough. So, we are grateful for the support. We are also very proud of our staff in the Ministry of Finance – the budget office, the Accountant-General’s office; and I want to thank them openly because, without their dedication and good work, we would not be able to accomplish what we have today. So, what I’m going to tell you, some of it you may have heard when Mr President presented his mid-term report and score card, but it bears repeating. And some will be additional expatiation on that; or new information.

I want to begin with what it is that the Ministry of Finance does. I want to remind people of our mission. Our mission is to manage the nation’s finances in an open, transparent, accountable and efficient manner that delivers on the country’s development priorities. There are four basic things we do in managing these finances and helping to manage the economy. The first is macroeconomic management. It’s the job of the Ministry of Finance, working with the Central Bank, to have a stable macro-economy. If there’s no stability, if things are moving, exchange rate is volatile, inflation is high – we have experienced it in this country before – what happens? You cannot even begin to think of development of the economy. So, that’s one of our jobs.

The other, of course, is managing the finances and mobilising finances for the real sector of the economy; meaning the other sectors that create jobs can grow. Then we also have the job of supporting enabling reforms that make this economy move. And finally, we have the job of supporting job creation indirectly and directly. So, we’re going to talk about what the Ministry of Finance does and has achieved in those four areas.

Let me start with something that we said during the mid-term report. The first is, on the macro-economy, I want to report that the economy is strong and stable. But of course, it faces challenge of inequality and inclusion; meaning that even though the economy is strong, we have problems with jobs and unemployment. We have problems with working to eradicate poverty. We need to move faster. We need to grow faster in order to tackle these problems. So, we are not saying that everything is solved, or that everything is great, but it’s strong; and that stability provides the platform on which we can use to solve the other problems.

What do I mean? We talked before that if you notice – everybody follows the exchange rate between the dollar and the naira – it has been relatively stable in these past two years at 155 to 160. At least, that is something you can evidence for yourself and attest to. It has been stable because we have also been able to accumulate reserves. People wonder why we are saving these reserves that are now almost $50 billion – we’re at $48 billion now. It’s very important because the reserves are what make the exchange rate stable. When the reserves are going down, that’s when you experience that instability and people can come and attack your currency. So, we have managed, working with the Central Bank – I also want to give them credit for good monetary policy – to be able to grow these reserves, stabilise, so that now, we have an exchange rate that can allow people to plan and allow people to do their work. As the Honourable Minister of Information said, inflation is coming down; from about 12.4% in May 2011, it has slowed to about 9.1% now and these all form the bedrock of this stability.

We have made savings. Part of our reserves is also the Excess Crude Account savings that we talk about. We have had about $4 billion in May 2011. We grew it to about 9 billion dollars equivalent at the end of 2012, and now we’re about $6 billion. Why are we down? Because the Excess Crude Account helps us to manage the economy and keep growing even when we experience shocks like when oil production comes down because of either oil theft, or leakages from pipelines and so on. You know, the money we have saved enables this country to keep going and we have enough to keep us going even in the face of shocks for another four to five months whilst we try to solve our problems. This is something that Nigeria did not have before and we are very proud of it. In the past, when we experience shocks, what did we do? We would have to go to the IMF or World Bank to go and look for money – the IMF in particular to shore up the economy, to shore up our balance of payments (that’s what economists call it). But now, even through all the ups and downs that we have experienced, have we gone there? No. Because Nigeria has now put itself – with the existence of this Excess Crude Account – in a position where in the event of any shock, we can go there to stabilise ourselves. That’s why Nigerians must support this account, the saving of this money; the Sovereign Wealth Fund. This country like a family must be able to put money aside so that if you experience shock, you don’t go around begging, you can stabilise yourself with your own savings. That’s what we manage to do.

The second thing I want to talk about is about GDP growth. This stability has enabled the economy to grow. Certain sectors are growing – I will come to that. Overall, this economy is growing and growth is projected at 6.75% by us; by the National Bureau of Statistics in 2013. Even the IMF has projected higher growth, but we’re being very cautious. Over there [referring to a slide], you will see how we compare with some other countries; with the whole of sub-Saharan Africa, they are growing at 5.6%, so we are much higher; even the emerging markets, we’re higher than them. And you can see Brazil, China, South Africa – South Africa at 2.8%, we at 6.75% et cetera – so we are doing well!

The GDP Illustration
Now, I want to spend one minute on something very important, because after we talk, people will say, “GDP growth, what is GDP growth? It’s not important; that’s not what we will eat.” But let me explain to you that without that growth, you cannot even begin to solve the problems of this economy. Let me illustrate to you. [She picks up a cake]. This cake symbolises our income, our GDP or your income within your household. GDP is nothing but the income of the country – the amount of cake you have to eat; you and your wife and children – the same with a country. So, let’s say this is the amount of cake we have to eat.

Now, these are four people sharing this cake – four people: a man, his wife and two children, or Nigeria with a population of let’s say 167 million people. So, this is the cake we have. You have this cake. Having this cake does not mean that every problem in your household is solved. Is it? It doesn’t mean that your income can now take care of all your relatives in the family who still have problems. It doesn’t mean that in your household, you don’t have problems of people not being employed, but you have this cake that you’re sharing. Now, what happens if we add three more people? Suppose, as a family, you marry another wife and you add one wife and three more children. How many are you now?  (Answer: Seven). This is the cake. What will happen if this cake doesn’t grow? All of you will be suffering. Isn’t it? When you marry that wife and have more children, or even if you have four and you have another three or four; you will want your cake to grow. That is the same way we want GDP to grow – right? So, this is the first cake. What happens if the cake doesn’t grow is that all of you will start suffering. [She takes up another cake].

Supposing you now have a bigger cake; put all the people on top and you now have the seven people; would you not be better off? What if you have an even bigger cake? You see this biggest cake? You can put so many more people on top. [Speaking to assistants to collect illustrative materials: “give me all the people, give them to me, all of them will be there”]. And what will happen? That means you will have even more food. So, is it not false when people say that growing the cake does not matter? It matters; because if you have the same cake and your size is growing, what will happen is that you become even poorer and poorer; isn’t it? If it is not growing, you will suffer even more. Now, Nigeria has a cake – our GDP – and our population is growing at 2.5% per annum. If we don’t grow this, we will stay with the same cake and it will become worse and worse. So what we want to do is grow this cake as fast as possible, as large as we can, while solving the other problems. Note that I didn’t say growing the cake solves all the problems; but if we don’t grow the cake, we are going to suffer.

So, don’t listen to those who say, “What is GDP growth – it doesn’t matter.” It is not true; it matters tremendously. It’s with this growing cake that you can now call those people in your family or village who say you are not helping them. Isn’t it? If your cake is growing, you can call them; help them with their health problems, help them with food, help them with other things. But if you say cake does not matter, then you cannot help them at all. This is what GDP growth is about. I want Nigerians to understand this so that we don’t have this challenge of, “What is GDP?” In fact, we need to grow at almost 8 to 10 percent per year. In fact, Vision 2020 projects 13 percent in order to solve unemployment and other problems that we have. I’m sorry I spent some time on this, but it’s about time for the Nigerian population to stop being deceived by people who are not telling them the truth about what happens in the economy.

Now, let me quickly pass to other things. The first thing this country does, of course, is prepare the budget and everybody knows about it; to manage the finances and we have the DG Budget here. We’ve had problem with getting budget preparation done on time, and I want to say that for the first time, the 2013 Budget was prepared in record time and also passed by the National Assembly in record time on 20th December 2012, just before Christmas. Now, this should give us the year to implement; but of course, you know that we have some challenges with implementation and some things that we need to agree with the National Assembly in order to make the budget hold. For this year, we have been working on it but it has not stopped us from moving forward. We released first quarter capital – 400 billion; didn’t we? And work is going on. We released second quarter capital – 200 billion – so we will continue to implement to the best our ability, and it’s the job of Finance to make sure that we get that money in.

But the money that we get in also depends on what happens with the sectors of the economy. So, Finance does not print money. We don’t manufacture money. We only can disburse money that comes into our coffers; that the country genuinely earns from its oil and gas, from agriculture, from all the other aspects, the money it gets from taxes that it collects even on non-oil revenue and Customs taxes. So, once we get all those in, we disburse them. But if anything happens and we experience a shock, for example, this year, Customs is a little bit down in terms of collection because importation has come down, especially importation of rice; partly because we are growing our own, more of it as we said in the midterm report; but also because people stocked up last year in anticipation of what would happen. So, when we have these things happening, then the income reduces and Finance has to manage whatever comes in. So, I want people to know when they’re feeling very stressed out that there’s not enough money, Finance does not have money hidden somewhere in the safe; it is what it gets that it disburses.

Now, let me move quickly to one of the things we have delivered. Nigerians have complained that the cost of government is too high; we are spending too much on recurrent budget. What have we developed in Finance? With the support of the President and all of you, we’ve managed to take expenditures down from 74% recurrent of the total budget to 68% in 2013, and we’ll continue to take it down to the best of our ability. We have the envelope system. People don’t understand it but it enables us to engage other ministries and agencies in the management and setting of the budget. That allows them to put forward their priorities in a way that we can engage them in a conversation and to prioritise especially in terms of completing uncompleted projects of which we have about six thousand in this country and these are some of the systems that we’ve put in place to make that work. I talked a little while ago about the fact that imports are down. Whilst that means that some of our revenue are down, but we’re happy because we want to diversify this economy. Nigerians don’t want to keep importing. So, non-oil imports have decreased – things like textiles, plastic, rubber – things we’re making here; and those things have even increased in terms of exports. I’m sure that the Minister of Trade and Investment will say more about that. But I also want to mention our waiver and tariff policies to just let you know that Mr President has insisted on a policy of not doing individual waivers. So this ministry is doing sectoral waivers. When we give a waiver now, it is to encourage a whole sector not just to encourage an individual; and those kinds of policies; we’ve done them for aviation, for agriculture, for solid minerals. They can import spare parts and equipments at zero duty. And this is all designed to spur the rest of our economy.

Quickly, let me move on to talk about debt. On Friday, I think it was on the back page of This Day, I wrote an article about our debt because there are so many misconceptions about it. I want you to know that no one in government – neither Mr President nor the Ministry of Finance, the debt management office and the legislature – we don’t support that Nigeria becomes an indebted country again. So, what are we doing? The ministry is delivering a very prudent and strategic debt management approach to the country. I want you to look at some of the numbers. You know, we say that our national debt is low; and that is true because if you measure us against so many indicators you will see. If you look at that, you will see that domestic debt is really the issue. And if you look at the flow of domestic borrowing, you will see that it spiked in 2010 where we increase salary by 53% at once.

Now, I’m not against increase of salary, so don’t let anybody go from here and misquote me. But it has implications; and in order to cover it, domestic borrowing spiked. Bonds had to be floated. It’s not that good to borrow for things like recurrent expenditure and consumption. So, part of our new strategy is not to do that; to start lowering domestic borrowing. One of the things Mr President said to us is, we have to bring it down and we’re doing it. From N852 billion in 2011, we went down to N744 in 2012, and for 2013 budget, I think to N588 billion, and we’ll continue to bring it down. That’s part of the new strategy.

At the same time, we’re slowing down the growth of the debt stock. So, it’s not that the debt stock won’t grow, but it will grow much more slowly than before; and you can see it. The debt stock, total debt is now at about 7.5 trillion naira made up of 6.49 trillion domestic and about 1.0 trillion external and we will slow that down by trying to retire the bonds that are coming due instead of rolling them over at high interest rates. I’m very proud to say that in 2013 we retired 75 billion in bonds and that’s the first time we’ve done it in so many years. That is part of the overall strategy.

The last part is that we have also developed a sinking fund and every year we put in 25 billion in it so that we can continue to retire this debt and not grow it at a very fast pace. We will be borrowing, but it will be for very prudent things that really make a difference on the ground for Nigerians and it will be at a much slower pace. Now, quickly, the ministry has worked hard – Federal Inland Revenue Service, the Customs Service – to try and bring in more revenue into our coffers. And of course, they face challenges. We have to improve in terms of our tax collection and I want to tell you that we are launching a tax drive for non-oil revenue taxes to increase; and you will be seeing very soon, adverts from FIRS to push this on. The Customs is also modernising its operations with an objective to become a modern Customs system that can manage destination inspection and all the things that Customs does by the end of this year.

The objective is that we shouldn’t only look at the expenditure side all the time, we must also look at growing our revenues in the country; and this is what Finance has done.

I want to spend just one minute before handing over to my colleague on a few things that Finance is delivering to make public financial management more efficient and more transparent. We have to step away from the manual management of our finances whereby, for instance, for payments, we used to send money in bulk to ministries to pay their staff, to pay for their expenses. We have now put in place three electronic platforms that we are introducing and implementing at the moment. The Integrated Personnel and Payroll Management System is in place and it is allowing us to pay staff straight through biometric data means, we can check and pay them directly. Now, we haven’t done all MDAs; we’ve done about 215 and this exercise has helped us weed out about 45,000 ghost workers and save ourselves about 118 billion naira. That’s a lot of money.

Now, people say to me, where are these ghost workers and who is responsible? I just want to say here that we’ve looked and we’ve found that in almost every ministry, department and agency we had series of these ghost workers and it is identifying who to pinpoint, that’s what we’re looking at now. But it is very difficult because with people coming and going within ministries, it is not easy. The important thing we are facing is to get them out so we can save the money and put in place systems to make sure that this does not occur. That’s what Finance is doing.

We still have to complete the rest of the MDAs by the end of this year. We’ve also put in place a government integrated financial management system and, in the beginning, this has slowed down the transfer of resources to ministries. Bear with us, this will improve. But what this means is that transparently we can connect the MDAs, be able to see all our money and be able to pull it back. So, all those who may be contemplating this, I think you should revise your thinking because transparency is on the way.

Now, to stem leakages and improve our finances, we also worked very hard in the ministry to totally change the way we do business in terms of paying subsidies. We audited N1 trillion in subsidy payments under the presidential task force led by Aig Imokhuede, and we found N32 billion questionable. We have recovered N14 billion as we speak and we have tightened the payment process, so that there is more independent verification of how that is being done. The other thing the ministry has delivered is the cleaning up of the contributory pension scheme. This is something very painful to Nigerians that they would work and then people would steal the money that should be for their pension in their old age. This is not acceptable. So, to reform this, the President gave us permission to implement a section of the Pensions Reform Act which had hitherto been blocked; it had not been implemented, to bring all these pensions – the defined benefit systems – under one roof, under a pension transition administration department, and that will enable us to keep a hold on this fraud and to keep it at bay because these things will be managed under one roof transparently. The implementation of this is now underway.

The contributory pension scheme is fine, we have more than N3 trillion there, it’s working well and I want to reassure Nigerians of its good health. So, it’s only people who are still under the old scheme which we are reforming that are affected. We are implementing a more transparent system. Within the next six months, by God’s grace, we’ll have everything together with biometric systems in place so we can also pay our pensioners directly.

So, let me just say to you that all this, as was said by the Minister of Information, have been validated; all these things we’re doing, which amalgamate to underpin a stable economy have been validated outside. You don’t have to listen to me or Mr President or even the Minister of Information. Just check what the rating agencies are doing. Nigeria is one of the few countries being upgraded and rated as stable in an environment where other countries, including some close to us here in Africa, are being downgraded, and I think that Nigerians, even if you’re critical of government, you have to accept external evidence that we have a stable economy. The grading does not say that we’ve solved all the problems of our economy – no country ever does that – but it says that we’ve got the platform with which to do it.

Now, just before I hand over, I want to say one word on SURE-P, the subsidy reinvestment program. We promised Nigerians, at Ministry of Finance, that we will share with them the money that comes into this program transparently and what it is being used for transparently so that they will see because Nigerians were sceptical that this money will be put to good use. You can see on the screen. We have published every single month; we’ve kept faith with Nigerians. Every single month in the newspapers, we publish how much money comes in and you can see that; in 2012, N180 billion came in to Federal Government, the states got N154.6 billion, local governments, N76.4 billion. In January to May 2013, we have received N75 billion, state governments N64.4 billion, local governments N31.8 billion so far, and we have been publishing it.

And what has it been used for? We said, go and check for yourselves. We have used it for social safety nets for our women and children, to strengthen and improve immunisation for our children, to strengthen and improve safe delivery for our women. I know that no man here wants his wife to die; no woman wants to die in child birth. We have the names of every woman in every ward that has benefitted from this scheme. So, for those who say, “Ah, no one in my place has benefitted” you can verify it. We have it. If you want it, ask me. I will give it to you so you can check that people are really benefitting and they’re getting cash transfers.

When they come for pre-natal care, they get cash transfer of two thousand naira. When they come to have attended delivery, when the child is brought for immunisation; that is what we call conditional cash transfer program and, so far, in the present Saving One Million Lives program, more than 400,000 women’s lives and children’s lives have been saved through the money used by SURE-P.

In addition to that, we have been working on transportation and I know you heard from the Minister of Transport on roads and bridges built using this money; so I will not dwell on it. My intent was from the Finance point of view to just show you that we kept faith with Nigerians, we have been transparent, you can verify and we’ll be happy to give you all the information.

Let me now call on the Honourable Minister of State (Finance) to talk about the other things we have been doing in the financial sector.

Minister of State Takes Over
Courtesies.

I am also not going to waste time. I am going to talk about what the ministry has been doing to actually ensure that we have reformed the financial sector. All the banks in Nigeria are fully capitalised. And we’re also happy today that the level of non-performing loan has come down to only 5%. Nigerian banks are the healthiest you can find in Africa and this has been shown. You remember 3–4 years back, most of the banks have reported losses, but today they are reporting profits that they never reported prior to 2008. And for those who have been following, the highest profit ever recorded in the history of Nigerian banking system was reported last year – N97.58 billion made by Guaranty Trust. You look at Zenith making 90 billion. Profitability has returned to the Nigerian financial system and people can now safely go and get finances.

The problem we have is the cost of borrowing. After now, interest rate is relatively high and we need to have lasting solution for it. That’s why we’re now restructuring and strengthening our development financing institutions so that they can give concessional loans to the critical sectors of the economy. To strengthen them again, the President set up a committee to look at how to solve the problem of development lending and we are going to establish a wholesale development finance institution that will be well capitalised which will lend wholesale money to the development institutions so that they can lend to the real sector. We are also inviting the private sector to come and invest in some of our development institutions. As you can see already, our infrastructural bank has some private sector and we are now trying to make sure that we get some private sector capital into that of agriculture.

Back to the capital market, last year, Mr President magnanimously approved forbearance to all our stockbrokers. Our stockbrokers are those who actually make the market perform and all of them have lost their capital. Most of the borrowing they did, they actually put in their money to borrow on the margin. They lost that investment. Yet, as far as the banks are concerned, they have to pay the nominal value of the debt while the real value of the shares that are underlying the debt are almost 20% of the loss they have taken. There is no way the capital market will actually progress with that kind of situation. Mr President magnanimously approved that forbearance and our stockbrokers are now healthy. They are now relieved of all these debts, they are now free to borrow more. And they’ve also regained confidence that yes, the Nigerian government can really support the stock broking companies, and you know that 60% of the money comes from international portfolio investors. Now, what we have done to our own domestic companies told them that we are really out to support our people. Therefore, they have more confidence in our market; money is now flowing.

From last year when we got the forbearance to date, the capitalisation of the market has increased by 70%. This has never been recorded anywhere. Everybody knows that in Nigerian insurance, you only do it under compulsion because people don’t have any confidence in the insurance sector. We know that this is a big problem and we went ahead to strengthen the regulatory authorities in order to bring sanity to the insurance sector. One thing we did in insurance, people just hook policies, report their own premium and declare profits where cash is not collected. So we came with No Premium, No Cover policy. At first, most of the brokers were not happy because the broker wants to make his money whether the man pays his premium or not. But today we say No, if you take insurance cover, nobody should recognise income unless cash is paid. So now, insurance is done on cash basis. Last year, we had a backlog of unpaid insurance of N55 billion; today, it is zero. All insurance are cash covered and that gives confidence to the policy holders.

When we came in, we had only 700 thousand. Now we have about 1.5 million policy holders and more equity is coming from abroad. We now have a lot of FDIs. About 10 companies have come into Nigeria and Nigerian companies can now even give insurance cover to oil and gas sector. There is 48% local retention of all the policies issued in that sector and this has actually improved our insurance industry and it will enable the industry to raise a lot of resources because in some countries, insurance companies have more money than banks. They even fund banks. We are encouraging our own so that they grow and we mobilise enough resources for investment in the real sector.

Another function we do is to ensure that all federally collected revenues are distributed to the three tiers of government according to the revenue sharing formula. In the past, FAC actually made it acrimonious; a lot of issues were there. We actually ensured that all outstanding issues that we met have been cleared. Today, when we come to FAC, we have turned it into committee where problems are solved, to committees where we educate ourselves, where we encourage others to copy the good practices of other states. We do peer comparison and we also ensure that we adopt the best practices and that’s why we’re just introducing the IPSAS – the International Public Sector Accounting Standards which all the states, parastatals and Federal Government are going to adopt so that our accounts are transparent and comparable to others. We have already ensured that we always hold FAC on time because holding FAC on time has a very serious implication on payment of salaries. And you know in Nigeria, unless salary is paid on time, workers are not happy. And you can agree with me that today, our workers are happy because we ensure that at least, Federal Government workers get their salary before 20th of every month and now with the electronic payment system, it is now – at least some get about 18th or 19th of the month and this has brought relative industrial harmony to Nigeria.

We also have a skill in the Federal Ministry of Finance for encouraging export of non-oil products. Before, few people know about the Export Expansion Grant. What we do, is in order to diversify the economy away from oil, all non-oil exporters get a grant based on the export proceed that they expatriated back. So, if you now produce anything non-oil and export, when you bring the money back we calculate based on certain parameters and you can get as much as 20% of the value of your export being given to you free by the government. Why are we doing that? It is because the cost of production in Nigeria is higher than the cost of production internationally. So, we have to make up for the cost of production to make our own manufacturers competitive. We have been doing that, yet we have some glut. We have the glut because growth in export has been growing very fast and we have to revise the system. We have parameters we have actually looked at and we realise that export growth is no more our problem in Nigeria because the target we set for our exporters; 71% of all exporters are growing higher than 10% every year. So, that has been solved. Re-investment of export growth; also 68.9% of our exporters are re-investing the money they get from the bank to develop their own companies. So, that is not also our problem.

Today in order to get the EEG (export expansion grant), you have to do well in the area of employment and you have to do well in the area of value addition. We are now reducing the weight for export and retention because we have already succeeded there. I think I will call on the CME to continue.

CME Continues

OK. Let me round off very quickly for Finance, because Minister of Information is telling me we need our own day. Let me just mention a couple of other areas quickly. The ministry supports; we are of finance but we’re also about making sure that the real sectors of the economy work. So in addition to the budget which we manage, we also have the task of mobilising resources for the sectors of the economy and I’m not going to go through all that I wrote; they can quickly roll it through the screen.

I’m very proud to announce that we have been very active to mobilise – sometimes zero interest – very low interest concessional financing for our sectors; money that is zero interest, 40 years to repay, 10 years of grace – the type that you cannot find easily anywhere. So we have been very careful to do that and 12 billion dollars worth, almost every sector. Agriculture – from China Exim Bank, from the World Bank, we have mobilised money. Environment: 450 million from the World Bank for environmental issues; transport. You know, we’re doing even guarantees so that we can have some of our infrastructure developed; for example, a letter of comfort to develop the Lekki deep sea port. So when you see all these things being developed, you know that Finance has done some work to make resources available or guarantees that make it work. Second Niger bridge – we’re now working on a private-public partnership arrangement where we’re going to co-invest with some investors that have been identified from outside with PPP to make sure that this bridge gets built. As we speak, they’re already on site trying to do some of the initial groundwork. We work with the World Bank, the African Development Bank, the Islamic Development bank and other banks to try to make this happen.

So, you can see, in health, in power, we are going to go to the market very soon to raise a Eurobond of about a billion dollars for the power sector. We know that power is what we need in this country; that’s what we have focused on. So, all that money will make gas available to fire the power and the emergency gas plan of the Minister of Petroleum Resources has already been yielding results in terms of making gas available to make our power situation better. But we want to support them to improve even more. So, we raise resources for that.

And the education sector – we’ve also raised money for states that have challenges: Bauchi, Ekiti, Anambra – so many of the states to benefit from that. In ICT we’ve raised resources. And aviation, housing – I can just say almost every sector of the economy – I’m proud to say we’ve done that. The Nexim Bank has also used resources to support trade for our economy; export-import bank which is under the Ministry of Finance. Let me just mention one interesting thing. We have supported the empowerment of women in the ministry through devoting some resources – 3 billion naira – to specific programs in five pilot ministries like Agriculture, Health, Water Resources, ICT and so on that focus on works, focus on delivering for women. For example, the Ministry of Works said that they will make more women contractors, sub-contractors. They will increase the number that will get contracts and jobs because women are not favoured and we have said that when they do it, we will support them with additional disbursement from this N3 billion. So we are encouraging support for women within this budget and that is something that the President really supports. So, these are some of the things we are doing.

Finally, we are supporting job creation. We are managing some job creation programmes apart from what we are doing for the real sectors of the economy, mobilising money for them in addition to the budget to create jobs like the 3.5 million jobs targeted by Agriculture in 2015. It’s the resources we help mobilise that will help them deliver that. But we are also managing some direct job creation being undertaken and implemented by government. Just a couple of examples which you know – we have the program that was mentioned by the Honourable Minister of Information, the YouWIN program of Mr President – this is his program – and I’m happy to tell you this is one of the most popular programs in Nigeria. From the first round we did, we have already created 14,000 jobs all over all parts of the federation. This is just the first survey. The second survey, maybe another 14,000 – that’s almost 30,000. The second round we just launched for women only and the third round we’re going to launch for men and women, the target of 80,000 to 110,000 jobs is easily reachable.

This program is surpassing our expectations in terms of job creation and we’re very proud of our young entrepreneurs who are doing this. We are also managing the Graduate Internship Program. Our objective there is to place 50,000 graduate interns with private sector. Over 1,000 private sector firms have applied. We have placed so far 1,309 graduates and we’re working very hard to speed up to place all the 50,000 who have been processed as qualified to participate in this scheme. And of course, we were previously supporting the community services program designed to create 370,000 jobs a year. We’ve moved that to the ministry of labour now, but I want to tell you that 178,000 jobs have already been created. And people who have seen these people working in the field, building ditches, doing drains, maintaining buildings have reported that they’re there and the jobs are real. So, these are some of the things that we have tried to do within the ministry to support the job creation agenda. I could go on and on.

We actually need more time but let me just stop here and say that Ministry of Finance is a multi-faceted ministry that is delivering day by day on the budget, on the additional finances for the sectors of the country, on managing direct job creation programs and on supporting the sectors – I haven’t even told you the things we do to support power through the bulk trader, to manage the debts of NEMCO, to push the various sectors along. We are doing so much more than we have time to share today and we are achieving results.

Thank you very much.

A Transcript Of The Speech Of Dr. Mrs. Ngozi Okonjo-Iweala,  Minister Of Finance And Coordinating Minister Of The Economy, Nigeria, At The Ministerial Platform Held At Radio House, Abuja On Monday, June 11, 2013.

Source: SAHARA REPORTERS.

IMF to visit Egypt as nation seeks economic help.


  • An Egyptian public transportation driver drinks tea as he stands in front of vehicles parked due to fuel shortage at a bus station, on the outskirts of Cairo, Egypt, Monday, March 11, 2013. On Sunday, drivers of Cairo's popular communal taxis staged a strike to protest fuel shortages, creating a traffic nightmare on the already congested streets of the city. Some of the drivers, armed with knives and firearms, attacked others who did not observe the strike or got into fights with motorists angered by their action. (AP Photo/Nasser Nasser)

    View PhotoAssociated Press/Nasser Nasser – An Egyptian public transportation driver drinks tea as he stands in front of vehicles parked due to fuel shortage at a bus station, on the outskirts of Cairo, Egypt, Monday, …more 

CAIRO (AP) — The International Monetary Fund is sending a senior official to Cairo this weekend to discuss issues that have delayed a $4.8 billion loan seen as a final lifeline to rescue Egypt, a political heavyweight in the region.

Egypt’s multibillion dollar loan request is considered crucial to freeing up other loans and reassuring foreign investors who abruptly pulled their money out of the country when longtime authoritarian leader Hosni Mubarak was ousted from power in early 2011.

IMF spokesman William Murray said earlier this week that the global lender’s director for the Middle East and North Africa would arrive in Cairo Sunday.

Egypt said last month that it had invited the IMF, which reportedly is not happy with the nation’s proposed economic reform program, to resume negotiations that were suspended late last year amid violent clashes over the drafting of the country’s constitution. Talks with the IMF also stalled whenPresident Mohammed Morsi quickly rescinded tax increases for fear of the public backlash.

“The idea is to discuss with the authorities their economic program and the next steps in the IMF’s engagement with the country,” Murray said, adding that the IMF remains committed to supporting Egypt at this critical time in its history.

However, Murray declined to say whether the IMF official would be on a “negotiating” or “courtesy” visit.

“There’s an ongoing discussion with the authorities and I don’t want to characterize what form it takes,” Murray said. “We’ve had ongoing contacts with the Egyptian authorities and we’ve remained fully engaged with them.”

The IMF loan has been delayed, mostly because of political turmoil, which forced Egypt to change its economic forecast figures to more conservative estimates. Government officials were hoping the budget deficit would shrink from its current level of almost 11 percent to 8.5 percent in the next fiscal year, but now Cairo is suggesting it could be 9.5 percent.

Earlier this week, Egypt rejected a $750 million rescue loan from the IMF, deciding that it did not want to resort to taking emergency measures at this time. The stopgap loan, part of the IMF’s Rapid Financing Instrument, would not have been a substitute for Egypt’s multibillion dollar loan request.

Egypt had long been viewed as a stable corner of the Middle East. Reserves stood at around $36 billion just before Mubarak was toppled. The past two years of political upheaval in Egypt, however, have kept investors from returning and have curtailed tourism — both key foreign currency earners.

Foreign currency reserves were slashed by more than two-thirds following the uprising, dipping to a critical level of $13.5 billion this year.

One way Egypt is seeking funds is through the return of millions of dollars earned under rampant corruption during Mubarak’s nearly three decade-long rule. Members of the Muslim Brotherhood group, from which the president hails, have spoken out in support of striking deals with former regime figures.

The so-called reconciliation talks have been confirmed by powerful Brotherhood businessman Hassan Malek, who was quoted in Egypt’s state-run news agency saying the deals would assist with “real development.”

Though Mubarak’s two sons are still in prison facing corruption charges, several members of the former autocrat’s inner-most circle have been released from prison in recent months.

But a decision by the country’s top prosecutor to ban two of Egypt’s biggest tycoons from travel caused shockwaves in business circles.

Onsi Sawiris and his son, Nassef, who manage Orascom Construction Industries, are in a dispute with the government over as much as 14 billion Egyptian pounds (almost $2 billion) in alleged taxes owed from the sale of shares in the company, which is one of the region’s largest employers.

Onsi Sawiris’ other billionaire son, Naguib, is a founder of one of Egypt’s liberal opposition parties and was the owner of a liberal Egyptian satellite channel. In a recent television interview, Naguib Sawiris suggested the tax case was politically motivated.

Ashraf Swelam, senior advisor to the Egyptian National Competitiveness Council, criticized the timing of the travel ban. “This sends a negative signal to Egyptian and foreign investors that the government is not serious about pursuing reconciliation,” he said.

Egypt has kept its foreign currency reserves afloat with handouts from oil-rich Gulf countries including Qatar, which has infused $5 billion in Egypt’s central bank since Morsi took office last summer.

Qatar, among other external donors and lenders, has signaled it is no longer willing to lend Cairo money before a deal with the IMF is reached.

Egypt needs a cash infusion soon to keep the Egyptian pound from sliding. The local currency has depreciated by around 10 percent of its value to the U.S. dollar since December.

Foreign reserves are also needed to pay for crucial wheat imports and government subsidies of basic commodities like diesel that the vast majority of Egyptians rely on for survival. Energy subsidies make up the largest chunk of the around $20 billion a year — about a third of the national budget — that Egypt spends on subsidies. Cutting fuel subsidies are believed to be at the top of a government reform plan presented to the IMF to secure the loan.

Speaking on condition of anonymity in line with regulations, a U.S. diplomat in Cairo said this week that economic recovery will become increasingly difficult in Egypt if the IMF deal is not signed soon.

The London-based consultancy, Capital Economics, said in a recent statement that Egypt was too geopolitically important to fall and should be able to tide itself over with funds from other countries until an IMF loan is signed.

In what may have been a final lifeline before an IMF deal is reached, the United States and Egypt signed a $190 million budget support agreement this week. It is the first installment of a planned $450 million in budget support from the United States.

The IMF deal has also been stalled because Morsi’s government is phasing in subsidy reforms to apparently delay implementing the unpopular measures ahead of parliamentary elections. The vote was slated to start in April but has been delayed indefinitely due to issues with the election law.

Morsi’s Muslim Brotherhood group, which has a majority in the upper house of parliament, is seeking to holds its grip on power in the lower house of parliament too. If his government implements subsidy cuts and tax reforms too quickly, public backlash could cost the group at the ballot box.

___

Associated Press writer Mariam Rizk contributed to this report.

Source: YAHOO NEWS.

By AYA BATRAWY | Associated Press

IMF sees Mali growth pick-up to 4.8 pct in 2013.


WASHINGTON (Reuters) – Mali‘s economic prospects for 2013 are “encouraging” with the pace of growth set to increase to 4.8 percent buoyed by a good food harvest, the International Monetary Fund said on Wednesday following talks with the government.

The expected pick-up in economic activity in Mali follows a French-led military intervention in the northeast after the government appealed for help to halt advances by Islamist rebels. France said this week it expects to secure the stronghold of Islamist militants by the end of the March.

Donors also recently resumed budget support and project aid to Mali after suspending assistance since the country’s March 2012 coup. The country is a leading producer of gold and cotton.

Mali’s gross domestic product in 2012 shrank by 1.2 percent and inflation increased to 5.3 percent because of a poor harvest in 2011. Inflation was likely to drop to below 3 percent this year, the IMF said.

“Several donors announced the resumption of their development aid following the adoption by the government of a road map to re-establish the administration in the North and organize elections,” the IMF said.

It said the government was preparing a supplementary budget to allocate that aid. “It will be used to finance implementation of the road map and to support the private sector by paying arrears and by resuming capital spending,” the IMF added.

The IMF said Mali’s defense spending should remain under control given that the military intervention was led by foreign troops.

The IMF said, however, Mali faced urgent development needs and would seek to plug a budget financing gap for 2013 and beyond during a meeting with donors in Brussels in May.

The IMF agreed to release an $18 million loan to Mali on January 28 to help stabilize the economy.

Source: YAHOO NEWS.

Reuters

Egypt declines $750 million IMF rescue loan.


CAIRO (AP) — Egypt has rejected an offer of a $750 million rescue loan from the International Monetary Fund, the finance minister said Tuesday, ruling out a fallback on emergency measures.

The emergency credit offer came after delays in finalizing a $4.8 billion loan from the IMF to bolster Egypt’s battered economy and help counter a growing budget deficit.

Negotiations over the larger loan have been stalled during political turmoil in Egypt, which has often deteriorated into violent clashes between protesters and police and widespread unrest in the form of labor and police strikes. The two years of unrest have contributed to a severe economic downturn.

Finance Minister El-Morsi Hegazy said Egypt has started implementing a full economic reform program, entitling it to a larger loan from the IMF, instead of emergency measures. Hegazy insisted that Egypt’s economy is on the path to recovery.

The stopgap loan, part of the body’s Rapid Financing Instrument, would not have been a substitute for Egypt’s multibillion dollar loan request.

The government has invited the IMF back to the country this month to resume talks, but no date has been set. An IMF official said late last month in Washington that the body received Egypt’s revised economic program, which it was studying.

On Tuesday, an IMF official would not comment on the minister’s rejection of the rescue loan offer.

“We are in discussion with the authorities on how best to support Egypt, including on the timing of the next staff visit,” IMF spokeswoman Wafa Amr said in an email.

Over the past months, Egypt’s foreign currency reserves have sharply dropped to a critical level of $13.5 billion, down from $36 billion in January 2011, before the popular uprising that forced longtime President Hosni Mubarak out of office.

Egyptians have been hit by shortages of diesel fuel and rising prices of some basic commodities. Also, the government plans to implement hikes in some taxes as well as reduce fuel subsidies, part of its economic reform plans.

Source: YAHOO NEWS.

Associated Press

Egypt must take bold economic measures without delay: IMF.


By Lesley Wroughton

WASHINGTON (Reuters) – Egypt needs to take bold and ambitious policy actions to address its economic problems without further delay and could tap temporary IMF funding while it negotiates a full loan program, the International Monetary Fund said on Monday.

IMF spokeswoman Wafa Amr said the IMF’s Rapid Financing Instrument was a lending facility designed to provide rapid, but limited, assistance to member countries facing urgent balance of payments needs.

“Use of the RFI could be an option if there is a need for interim financing while a strong medium-term policy program is being put in place,” Amr told Reuters. “Ultimately, this is a decision the authorities will have to take,” she added.

Cairo has indicated it wants to reopen talks with the Washington-based IMF on a $4.8 billion loan, which was agreed last November but suspended at the government’s request after violent street protests the following month.

Amr said the IMF was currently studying revised economic projections by Egyptian authorities and discussing “the next steps in our engagement”. She said no date was set for IMF officials to visit Cairo for further talks.

Egypt on Sunday rejected any suggestion of stop-gap IMF funding to help it through a political and economic crisis, saying only broad structural measures as part of an IMF package could help tackle the country’s soaring budget deficit.

The country’s foreign currency reserves have fallen to little more than a third of the level before the 2011 revolution, forcing the central bank to ration dollars.

With Islamist President Mohamed Mursi struggling to contain violent protests, new figures released on Sunday also showed an increase in inflation.

Analysts have said short-term IMF aid would be a useful compromise for the government while it negotiates an IMF standby loan program. It would also be seen as a down payment by the IMF toward a bigger program.

“The IMF remains fully committed to supporting Egypt at this critical time,” Amr said.

The stop-gap measure could amount to about $750 million, which is roughly 50 percent Egypt’s quota share, that determines how much the IMF can lend. The United States committed $250 million to Egypt during a recent visit by new U.S. Secretary of State John Kerry to Cairo.

While the amount is not nearly enough to plug Egypt’s funding gap, analysts have said it could also help unleash additional loans from allies in the region, including Qatar.

Source: YAHOO NEWS.

By Lesley Wroughton | Reuters

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