By Tony Obiechina, ABUJA
The Federal Government will soon introduce new revenue generating initiatives to shore up resources available to it in executing projects.
This is just as the government has released over N820.57 billion to Ministries, Departments and Agencies (MDAs), from the 2018 budget, promising to increase it to N1.1 trillion before the end of this year.
Minister of Finance, Mrs Zainab Ahmed who disclosed this during the 2019 Budget breakdown in Abuja on Thursday, said the N820.57 billion represents 43 per cent of the MDAs capital.
She explained that the government has equally made releases that go to the statutory transfer agencies which are released to them en block and that amount includes both their personnel, recurrent as well as capital.
“Let me first of all say that the N820.57 billion that has been released is just for MDA capital because we have releases also that go to the statutory transfer agencies that are released to them en block and that amount includes both their personnel, recurrent as well as capital.
“There are also capital releases that are done as part of the capital supplementation. That is to say it’s service wide that is not in the 820.57 billion. The 820.57 billion is 43 per cent of MDA capital.
“We are working to push this to 1.1trillion by the end of December and that would be including the statutory transfers” she said.
“The Minister also explained the reason for the depletion of the Excess Crude Account (ECA) from $2.319 billion as at last month to $631billion this month, saying that about $1 billion was withdrawn for security purposes.
Similarly, she said, about N50 billion was refunded on Wednesday into the account.
“The excess crude account was refunded yesterday (Wednesday) and we had sent another 50 billion savings into the excess crude account. Recall that NEC had authorised the use of $1billion from the excess crude account for security.
“So, the performance of that instruction is what has produced what we have in the excess crude account.
“So it’s been largely depleted but we are still saving to it and this is the third month that we have been saving consistently into the excess crude oil account” she said.
On the new revenue initiative, the Minister said this will include new taxes and excuse duties to be imposed by the government in order to mobilize domestic revenue for better budget funding.
According to the Minister, her ministry’s focus now “is on revenue because we do have to mobilize more domestic revenue so that we can better fund our budget. You can see from the performance that there is gap between what is projected for in the budget and what is actually generated.”
As a result, Zainab Ahmed disclosed that government “very soon will be generating new revenue initiatives which will include a new set of taxes and excise duties but also working with FIRS and customs for new and enhanced measures for enforcement and also for compliance. By doing what we are doing, we might be having to go to National Assembly to amend some laws that we have identified that has some gaps, some loop holes. We are doing every thing we can to make sure our budgets are better funded going forward and it will start from 2019.”
In respect of fuel subsidies, the finance minister revealed that the ministry “is currently in the process of issuing promissory note to fuel marketers and have last week released the first batch of N177 billion to the fuel marketers and we are doing some reconciliation processes to release the second batch to the fuel marketers. Perhaps before the year closes out or in any case as early as possible in the new year.”
With regards to the excess crude account controversy, Mrs Zainab Ahmed over ruled the Permanent Secretary of her ministry who had previously declared that the Excess Crude Account (ECA) was depleted to offset the last tranches of Paris Club payout to states.
According to Ahmed, “the excess crude account was refunded yesterday we had sent another N50 billion savings into the excess crude account. If you recall that the NEC had authorized the use of $1 billion from the excess crude account for security, so the performance of that instruction is what has produced what we have in the excess crude account. So it’s been largely depleted but we are still saving to it and this is the third month that we have been saving consistently into the excess crude oil account.”
Answering questions from journalists on the status of stamp duty trillions of Naira trapped in the system, Chairman of the Fedearl Inland Revenue Services (FIRS) Mr. Babatunde Fowler noted that “what has happened is that in our stamp duty act there is no provision for electronic transfer especially in the banking sector. So, there is discrepancy in terms of collection of stamp duties whether it is NIPOST or FIRS. So, until the law is amended and currently it is in the House, the money is being warehoused in the Central Bank of Nigeria (CBN). But in terms of the actual amount, the central bank of Nigeria has those figures.”
Also, in terms of MDAs that are owing taxes, Fowler said “we still have a lot of MDAs that are owing taxes before 2015 and with the help of the presidency and the ministry of finance they have come forward with an instalmental payment plan. The question was asked why the money was deducted from the current budget allocations, it is because they have to continue to run and perform their services and they are limited as to how much can be deducted at once and that being said, a number of them have requested to pay over 46 years. That shows the revenue that was not remitted prior to 2015.”
The highlight of the budget breakdown was the presentation made by the Minister of Budget and National Planning Senator Udoma Udo UdUdom. He said the 2019 Budget proposal seeks to continue the reflationary and consolidation policies of the 2017 and 2018 Budgets respectively, which helped put the economy back on the path of growth.
On the expenditure side, allocations to Ministries, Departments and Agencies (MDAs) of Government he said “were guided by the three core objectives of the ERGP, which are, (i) Restoring and Sustaining Growth; (ii) Investing in our People and (iii) Building a Globally Competitive Economy.”
As with 2016, 2017 and 2018 Budgets, the 2019 Budget he pointed out “has been prepared on the Zero Based Budget (ZBB) Principles. The 2019-2021 Medium Term Fiscal Framework (MTFF), Medium Term Sector Strategies and proposed 2019 Budget reflect many of the reforms and initiatives in the ERGP, which is our roadmap to economic recovery and a more sustainable growth. Projects are linked to government policies and overarching strategic priorities.”
As part of government’s revenue making plans for 2019, Udoma disclosed that “the Federal Government has sustained its efforts to improve public financial management through the comprehensive implementation of the: Treasury Single Account (TSA), the Government Integrated Financial Management Information System (GIFMIS) and the Integrated Payroll and Personnel Information System (IPPIS).”
He also reiterated that President Muhammadu Buhari “has directed that immediate action be commenced to restructure the Joint Venture Oil Assets so as to reduce government shareholding to 40 percent and that this exercise must be completed within the 2019 fiscal year and that the Department of Petroleum Resource (DPR) shall, within three months, complete the collection of past-due oil license and royalty charges.”
Following President Buhari’s directive: the Ministry of Finance, working with all the relevant authorities, has been authorized to take action to liquidate all recovered, unencumbered assets; within 6 months.”
Given the improved oil prices and production levels, Nigerian National Petroleum Corporation (NNPC) has been ordered “to immediately commence the recovery of all outstanding obligations, including those due from Nigerian Petroleum Development Company (NPDC) (a subsidiary of NNPC), which it had agreed to pay since 2017.”
