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Tag: Adeosun

  • Adeosun, Gwarzo disagree on SEC, Oando crisis, others

    Adeosun, Gwarzo disagree on SEC, Oando crisis, others

    Minister of Finance Mrs Kemi Adeosun and suspended Securities and Exchange Commission (SEC) boss Mr Mounir Gwarzo yesterday disagreed on the cause and propriety of the suspension of the Director-General.

    At a House of Representatives’ public hearing by the Tajudeen Yusuf – led Committee on Capital Market and Institutions on Gwarzo’s suspension, Mrs. Adeosun said the suspension was in the interest of the capital market investing public. Gwarzo disagreed; he said it was all as a result of his decision to conduct a forensic audit on Oando Plc.

    Yusuf explained that the investigation was not intended to witch-hunt anyone but aimed at building and restoring the confidence of the investing public in the capital market.

    Gwarzo, who appeared at the hearing with a counsel, James Igwe, Senior Advocate of Nigeria (SAN), faulted his suspension on the point of law and Public Service Rule (PSR), stressing that the minister had no power to suspend him.

    He pointed out that payment of severance package of N104 million to himself as well as awarding SEC contracts to companies he has interests in as alleged by the minister were untrue.

    Gwarzo said his suspension was as a result of his resolve to conduct a forensic audit of Oando despite several attempts by the minister to stop him.

    He also wondered why the minister interfered in the case of Oando and Oasis Insurance, and cited five other investigations carried out by SEC in the last two years which the minister never interfered in.

    Gwarzo  said: “I strongly believe that anybody or group of persons that do not want a forensic audit to be undertaken on Oando Plc does not believe in the anti-corruption war of Mr. President. The forensic audit is yet to take place almost two months after my suspension and more than four weeks after Mrs. Kemi Adeosun told the nation that the exercise will commence. There is no court order as at today restraining SEC from undertaking the exercise. Oando has filed an appeal at the Court of Appeal and the matter is yet to be heard not to talk of issuing any order and SEC only obeys court orders and not filing of papers as was the case in Gombe Bond, BGL and Partnership, and the board of the Nigerian Capital Market Development Fund has since approved the engagement of the investigators and also approved the sum of N160 million for the exercise. Therefore, SEC has no right to vary the decision of the Board and no reason not to continue with the forensic audit”.

    Igwe quoted copiously from the Securities and Investment Act, PSR and the constitution that the DG was not subjected to the PSR since he was not a public servant but a head of a government parastatal appointed by the President.

    Igwe said the minister lacked the powers to suspend a SEC DG and that Gwarzo could only be guided or disciplined by the Investment and Securities Act (ISA) and staff manual of the agency, adding that the provisions of laws acted upon by the minister were non-existent in the rule books.

    On the allegation of payment of severance package of N104 million to himself, Gwarzo said the payment was in accordance with the rules governing such matters.

    He noted that though he was a commissioner for two years before being appointed by the President, subject to the approval of the Senate, he still went through the process of a new appointment and, as such,  he was entitled to two years of severance package.

    He said all heads of government agencies, such as the Central Bank of Nigeria (CBN), including commissioners, are entitled to such packages, adding that all the commissioners as well as the Head of Legal and Enforcement of the Commission agreed that the payment be made to Gwarzo except the acting Head of Legal Department at the time who disagreed.

    He said the approval of the minister was not required on the matter, notwithstanding the non-existence of the Board of the Commission at the time.

    On his interest in certain private companies and award of contract to one of them, Gwarzo said he resigned his membership of the companies but found out that the resignation letters were not filed.

    He also said there was no law that prohibits companies belonging to members of his family from sourcing for contracts.

    “The Minister lacks the power to suspend me from service. The appointment into office or removal from office of the Director-General of SEC is a power strictly resident with the President of the Federal Republic of Nigeria. This is evident from the provisions of section 5 and 8 (1 and 2) of the IS Act, 2007. The minister’s role is only limited to recommendations to the President. It is elementary to Labour law that only an employer can suspend an employee, thus bringing to question the suspension by the Honourable Minister,” Gwarzo said.

    According to him, as soon as the SEC issued a notice on 18 October 2017 to the public that a forensic audit will be carried out on Oando PLC and the shares be put on technical suspension, the Minister of Finance invited him to her office on 19 October 2017 at 9:30 am to inquire into the activities of the Commission on Oando Plc at that meeting.

    “She sought to know the power I as the DG had to undertake such an exercise, stating that it had been suggested to her that I should be relieved of my job for taking such a decision,” Gwarzo said.

    The minister said Gwarzo was economical with the truth by claiming that his suspension was a result of the investigation of Oando.

    Saying that Gwarzo’s only wanted to play up emotion on the issue, Mrs. Adeosun said she could not have endorsed the investigation of Oando by SEC if she had other motives, despite being informed after Oando has been suspended by Gwarzo

    While the  Minister questioned the sincerity of Gwarzo on allegation of  interference in the affairs of SEC against her by the suspended DG, Mrs. Adeosun said what explanation would Gwarzo give to the investigation of a company owned and managed by her personal friends, found wanting and banned for life by Gwarzo.

  • Adeosun, Ngige, Udoma to face Reps’ panel over N17b NSITF debt

    Adeosun, Ngige, Udoma to face Reps’ panel over N17b NSITF debt

    Minister of Finance Kemi Adeosun will appear before a House of  Representatives’ ad hoc panel investigating Ministries, Departments and Agencies (MDAs) of governments and private sector over non-remittance of their contributions to the Employees’ Compensation Scheme (ECS).

    As stipulated by the Employees’ Compensation Act, 2010, all MDAs at Federal, State and Local government (LG) levels are expected to register and contribute one per cent of their gross income to the scheme.

    The scheme, domiciled in the Nigerian Social Insurance Trust Fund (NSITF), is to encourage safety in workplace and provides compensation for death, occupational diseases and injuries, reduce personal, physical and emotional suffering of employees and their relatives as well as minimises bureaucracy and bottlenecks in determining liabilities.

    Minister of Labour and Productivity Chris Ngige, his Budget and National Planning counterpart, Udo Udoma as well as the Director General, Budget Office of the Federation, Ben Akabueze and the Accountant General of the Federation (AGF),  Ahmed Idris, were also expected to appear before the Deputy Minority Leader Chukwuka Onyema – led ad hoc panel today.

    They were to explain why the Federal Government is owing NSITF N17 billion since 2015 with the Nigerian Police Force (NPF) owing N16.2 billion since 2010 and several other MDAs.

    They were also expected to give detailed account of registered MDAs, total amount budgeted on yearly basis as well as shed light on exemptions from the scheme.

    In his presentation, NSITF’s Director General (DG), Adebayo Somefun, who has no idea of the total workforce of his agency, said only Bauchi, Taraba and Gombe states have registered but without commitments.

    The rest, including the Federal Capital Territory (FCT) and the 774 councils, have not.

    In contravention of the law, the DG said most MDAs have refused to register for the scheme, in spite of the fact that no agency was exempted except uniformed military personnel.

    He said civilians working in the military establishments were also expected to participate.

    He said contribution to the scheme was supposed to be deducted from source by the Ministry of Finance and the AGF.

    Somefun could not however provide the committee with the actual figure owed by individual MDAs, complaining that non-registration by recalcitrant organisations made reconciliation difficult for NSITF.

    Inspector-General Ibrahim Idris said the police was elated when the scheme was introduced but could not understand why the Police was excluded.

    Idris, who was represented by Assistant Commissioner of Police (ACP), (Insurance), Ishaku Mohammed, said the AGF was formally contacted in 2014 since the contribution was expected to be deducted from source which has not been the case with the Police.

    He said the Budget Office responded in another correspondence that the NPF is excluded from the scheme and should not pay but can approach the NSITF for enrolment.

    “We did but NSITF did not ask us for payment, rather  a consultant was appointed to work with us and by 2016, a figure of N13 billion was given to us and we were asked to approach the Federal Government  for the payment or reimbursement but nothing has happened till now,” he added.

    Though the Nigerian Civil Aviation Authority (NCAA) claimed that its establishment Act prevented it from contributing to the scheme, it nonetheless promised to work with NSITF on how to reconcile the records.

    NSITF was discovered to have defaulted on payment and mandated to pay its own contributions of N394 million to the scheme.

    The committee expressed its dissatisfaction with NSITF for not carrying out enough public awareness on the scheme, citing non-activity from state and local governments.

    Committee Chairman Onyema said: “Government at all levels should be aware that failure to register and pay the statutory contributions to the NSITF is a gross violation of the law.

    “Violating the law exposed the vast majority of Nigeria workforce to uninsured and uncovered risk and occupational hazard, which could not be compensated for.”

    ment will lead by example.”

     

  • N750b capex fund coming, says Fed. Govt

    N750b capex fund coming, says Fed. Govt

    A total of N750 billion would be released this week to Ministries, Departments and Agencies (MDAs) of government for implementation of capital projects contained in the 2017 Budget.

    If the capital release is made as planned, it will bring total sum so far relaesed by the Federal Government for capital projects this year to N1.2 trillion comprising N450 billion earlier released.

    The Minister of Finance, Mrs Kemi Adeosun,  spoke in Abuja yesterday when she received a delegation of 30 French firms and investors that expressed interest to invest in key sectors of the Nigerian economy.

    She said: “What the government is doing is to provide enabling infrastructure that would bring potential into reality. Last year, we released N1.3 trillion of capital and so far this year we have released N450 billion and this week we will release another N750 billion. This will take the release to N1.2 trillion by the end of the year.”

    The head of the French delegation, Mr Philippe Labonne, said French investors have indicated interest in investing in key sectors of the economy such as banking, infrastructure, renewable energy, agriculture and youth empowerment.

    The decision of the firms to invest in Nigeria he said was in keeping with French government directive for French frims to increase their investments in Nigeria.

    To achieve their investment objective, Labonne said most of the French frims would form strategic partnerships with their Nigerian counterpart because “the Nigerian economic environment has been encouraging following the recent stability in Nigeria’s foreign exchange market.”

    He added that the investors wer in Nigeria “to assess the investment environment in Nigeria to enable us take advantage of Nigeria’s investment opportunities. We have about 30 firms in this delegation in sectors such as infrastructure, services, agriculture and banking and the purpose of this meeting is to identify key sectors where we can invest.”

  • Gwarzo’s suspension: It’s all blackmail, says Adeosun

    Gwarzo’s suspension: It’s all blackmail, says Adeosun

    Minister of Finance, Mrs Kemi Adeosun, yesterday accused the suspended Director General of the Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, of blackmailing her over his suspension. She vowed to resist the alleged blackmail.

    But sources close to Gwarzo faulted the minister, citing the timing of the suspension, orchestrated meetings on Oando at the instance of the minister, eyewitnesses and earlier communication from Gwarzo to Adeosun.

    Adeosun spoke to reporters in Abuja in response to media reports, suggesting that Gwarzo’s  suspension was on account of  “his refusal to stop the forensic audit of Oando Plc”.

    According to her, it was the threat of blackmail that strengthened her resolve to suspend Gwarzo and allow the administrative panel of inquiry to proceed with its probe.

    She said Gwarzo personally delivered the memo, using the SEC staff seconded to the office of the minister, in breach of normal procedures for the receipt of mail, noting that the copy of the memo in her possession was delivered with a message that any action against Gwarzo would result in same being leaked to the press.

    “ Gwarzo’s suspension is in line with the Public Service Rules (PSRs) to allow for an unhindered investigation of serious allegations of financial impropriety against him. Some of the allegations with documented evidence include the awards of contracts to companies related to him and members of his family. Based on the evidence from that further work and creditable reports that documents were being unlawfully removed from the SEC, as well as consultations with the Economic and Financial Crimes Commission (EFCC), the decision was taken to suspend Gwarzo,” Adeosun said.

    She dismissed as false, the insinuation that she issued an “instruction to discontinue with the Oando case,” saying “ this can be corroborated by the other parties at that meeting and by subsequent events”.

    According to her, Gwarzo was queried on November 3, 2017, and he responded on the 7th and based on that response, she asked for more investigations to be done because he gave some responses to some issues that were unsatisfactory, so they asked for further investigation to get certain facts from the CAC and banks based on the evidence.

    “It became clear that we would need to conduct an API and therefore the laws of the Public Service say he has to be suspended. Now his responses to the query of the 3rd were raised with him on Monday where he was asked to clarify matters. He was reminded that he said this, but we have evidence to another effect and it became very clear from the inadequacies of his response that he would be suspended,” Adeosun said.

    She was emphatic she never directed Gwarzo to stop his investigation into Oando.

    “In fact, as I have said earlier on in my statement in October when the original suspension of Oando took place, we had a group meeting with the leadership of the SEC, not just Mr. Gwarzo, but all of his team, and they presented very clear evidence that Oando had a case to answer, and we were satisfied with that and we made our position clear,” Adeosun said.

    She said the suspension would not in any way impact negatively on investors’ confidence in the capital market, assuring that shareholders have nothing to fear.

    “I earned my living all my life from the capital market  until I entered the public service. I was a capital market operator. The capital market runs on confidence and transparency.  It’s a very important market. The SEC is not an individual. It is an institution and a very important one which must be upheld,” Adeosun said.

    Gwarzo had claimed in a letter that the minister directed him to suspend the announced forensic audit of Oando and to settle the Oando issue without due investigation. Similar claims were reiterated by sources in the know of the undercurrents of meetings between the minister and Gwarzo and Oando and other parties prior to the suspension.

    They raised four posers for the minister:  the petition was submitted in January 2017, some 10 months before Gwarzo’s insistence on the forensic audit of Oando; what delayed the minister from acting since then? At the meeting claimed by Gwarzo were two other senior officials of the Ministry of Finance, Permanent Secretary and Director of Legal Services; will they testify on oath? Between January 2017 and October, the minister did not raise the issue of the petition with Gwarzo, and when an online medium unearthed the petition again, Gwarzo, on the second day, wrote to the minister, providing explanations on the allegations. Does the minister have the power to suspend Gwarzo given extant rules and the fact that the investigating agencies- the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Related Offences Commission (ICPC)-had not established a prima facie case of criminal conduct against Gwarzo?

    In a letter titled “Investigation of Oando Plc”, Gwarzo had indicated that the minister was interfering in the Oando’s investigation and wanted the announced forensic audit to be suspended.

    In the letter, Gwarzo wrote that:  “Pursuant to our meeting on the above subject held on Monday, November 27, 2017, I am compelled to advise you ma, on the implication of the verbal directive issued to me in which you stated that the SEC should discontinue the forensic audit on Oando Plc and hold a tripartite meeting with legal officers of the commission, Oando Plc and the Federal Ministry of Finance with the purpose of coming up with penalties which would be issued to top officials of Oando Plc in their personal capacities for payment.

    “Honourable Minister, it is important to stress that an action such as that proposed above would definitely put to question the independence and integrity of the commission, while also completely eroding the confidence of both local and international investors in the Nigerian capital market.

    “Furthermore, as you may be aware, the activities around the investigation of Oando Plc are being closely monitored by the local and global investment communities and they eagerly expect the outcome of the exercise.

    “It is, therefore, not in the best interest of our recovering economy that the forensic audit is not seen to be conducted in an independent and transparent manner proposed by the commission.

    “It would interest you to note ma, that the commission has in the last three years embarked on firm enforcement actions against some so-called ‘top capital market stakeholders’ in the Nigerian capital market.

    “Remarkably, these actions have sent strong signals to the entire capital market community and have led to an 87 per cent reduction of infractions in the market within the period.

    “One major infraction alleged against Oando Plc is financial mismanagement. Honourable Minister, given that the consequent effect of such allegation is being borne by the over 274,000 shareholders of Oando, it is only proper that a process which would reveal the status of this allegation to ascertain its veracity or otherwise be embarked upon in a transparent manner.

    “This, in my opinion, would put to rest the question of how the shareholders’ funds of the company have been managed by the persons appointed to do so for the shareholders

    “The commission, therefore, as the apex regulator of the Nigerian capital market, has the responsibility to ensure that a thorough, independent and transparent process is put in place to unravel the true financial status of the company.

    “Honourable Minister ma, may I restate that it is in the best interest of the Nigerian capital market and our recovering economy for the forensic audit of Oando Plc to be carried out, as reneging on same at this time would result in the following: Ridicule the regulators and project it to the global investment community as inefficient and lacking of integrity; completely erode investors’ confidence in the market; send the wrong signal to all market participants both locally and globally; discourage foreign investors from investing in our jurisdiction; and portray the absence of independence of the regulators.

    “The commission in Section 13 (cc) of the Investments and Securities Act 2007 is mandated to advise the Honourable Minister of Finance on all matters relating to the securities industry.

    “Thus, this advice proffered is as a result of our obligation to properly guide you on the best approach to take on capital market issues and it is strongly our recommendation that it should be adopted. “Honourable Minister, my request to seek for a written directive is not in any way meant to disrespect your person, but stems from the basis that every decision or direc tive of the board to the management of the commission is always documented to enable ease of implementing such directive.

    “Given your current capacity as the board of the commission, it is only proper that you be guided on the necessary procedure to adopt.”

    With the denials, claims and counterclaims, many stakeholders have called for dispassionate investigation of the circumstances surrounding the suspension of Gwarzo.

    The House of Representatives, which directed the Minister of Finance to reinstate Gwarzo, has mandated its Committee on Capital Market and Institutions to carry out an independent investigation. A motion to that effect was unanimously adopted after it was put to a voice vote by the Speaker, Yakubu Dogara.

    The decision of the House followed the adoption of a motion of urgent national importance by Diri Duoye (PDP, Bayelsa) who alleged that the conflict between the Minister of Finance and Gwarzo over the Oando forensic audit and corruption allegations were major factors in the events that led to the suspension.

    According to him, there were allegations of interference by the Ministry of Finance in the discharge of the SEC’s responsibilities, with the Oando forensic audit matter being largely responsible for the DG’s suspension.

    He noted that the intervention by the House would put the matter into proper perspective and contribute to amicable resolution of the conflict in order to protect the image of the SEC in the interest of both local and foreign investors.

    In his contribution, Toby Okechukwu  (PDP, Enugu) said a thorough investigation was necessary in order to forestall the ugly past experience that led to the stock market crisis in the past.

    “Nigerians should know why the DG was sacked. A total panel of inquiry is needed in SEC,” Okechukwu said.

    In his remarks, Sani Kaita (APC, Katsina) said the SEC was a very sensitive and  important organisation to Nigeria and the international community and the House should be involved in the investigation of the issues.

  • Maina was not on government payroll- Adeosun

    Maina was not on government payroll- Adeosun

    …Maina’s lawyer insists on out of court settlement

     

    The Minister of Finance, Kemi Adeosun and the Accountant General of the Federation (AoGF), Ahmed Idris said Maina was not on the payroll of the Federal Government.

    The two said records on the two payment platforms used by the government for its workers have been scrutinised and Maina was found to have been paid last in February 2013.

    “We used two platforms for salaries and no trace of payment to Maina. His last payment was in February 2013.

    “We don’t have his biodata on our payroll anymore and made no payment to him. He is also not a staff on Finance Ministry,” Adeosun said

    The Comptroller General (CG) of the Nigerian Immigration Service ( NIS ), Mohammed Babandede said since Maina was stopped at Murtala Mohammed International Airport (MMIA) in September 2013, he has not been seen again using Nigerian ports.

    He also disclosed that Maina has dual citizenship with three passports, valid standard Nigerian passport that expires in 2018, United States’ (US) that expires in 2022 and an official passport that has expired.

    He said Maina was placed on NIS stop list which was why he was stopped in 2013 but that in December 2015, the EFCC directed he be removed from stop list.

    “According to official documents he has not been travelling since 2013,” he said.

    Acting Economic and Financial Crimes Commission (EFCC) chairman, Idris Magu denied the letter vacating the stop order, saying he has never seen it in his life, just as he has never met Maina before.

    He said the source of the letter will be investigated because he assumed office in November 2015 while the stop order vacation letter was written in December same year.

    He told the Committee that investigation of pension began in 2010 but that his Commission had no collaboration with the Maina’s team, except for a biometric exercise.

    “He did not hand over a single recovered asset to EFCC, and if there is no asset he handed over to, how could there be assets to share?

    He said: “I challenge him or anyone to prove that we shared recovered assets. Those claiming such should come forward to prove it.

    “All recovered assets at EFCC are products of our independent investigations and they were Police pension and HoCSF.

    “From Police pension eight people and associated companies were investigation while HoSC has five and associated companies investigated.

    “All assets recovered from HoCSF on interim forfeiture have been handed over while some are used as offices.

    “It is only the asset of one Yusuf that has been convicted that’s been permanently forfeited and they are 32 in number.

    “All proceeds on the forfeited assets as rents are duly documented

    “Maina’s assets that we recovered were seven in Kaduna, five in Abuja- two in Kado, two in Life camp and a sprawling one in Jabi”.

    He said EFCC is investigating four companies used by Maina with six bank accounts that have N2.7b from 2008 to 2013.

    According to him, one of Maina’s son account that has
    N1.5b turnover within a year was also uncovered.

    He said Maina used cash converted to forex exchange for transactions most of the time, adding that he paid $2m cash for the Jabi house.

    He said having declared Maina wanted, the Interpol has been alerted for his arrest.

    The Director General ( DG ) of the Department of State Services (DSS), Mamman Daura said he was notified of the Dubai meeting between Maina and the AGF with the National Security Adviser’s (NSA) , Babagana Monguno in attendance.

    He however heaped the blame of the Maina saga on lack of interagency collaboration and information sharing.

    However, when Chairman of the Committee was set to round up the hearing, Maina’s lawyer, Sani Katu protested that he has been denied fair hearing.

    “We must be heard, that is what they did to us in the Senate, they boxed us into a corner, we must be heard,” he shouted.

    Madaki said no one would be denied to speak, saying the Committee would not allow rented crowd to disrupt it’s activities.

    Katu then reiterated the fact that Miana was reinstated by the Court judgement that vacated his arrest order, that the status quo should remain.

    He insisted that Maina is still on the payroll of the government going by the court pronouncement and should be be paid his emoluments.

    He said Maina should not have been dismissed from service going by the pronouncement of the court

    He also said out of court settlement was reached by the two parties where it was agreed that Maina would be reinstated while he will drop the N2.1b claim he asked for in the suit.

    He said:”The Court reinstated him which means he should revert to his status and his emoluments paid to him

    “There is a judgment from the Federal High Court that sets aside the Warrant of Arrest, that sets aside the warrant of arrest which led to his query and subsequent dismissal.

    “So our position that having set aside all those queries and dismissal, it means Mr. Abdulrasheed Maina should revert back to his earlier status and what is that earlier status?

    “The status is that, before he was dismissed, he was a civil servant and being a civil servant, the question can as well be raised if he is entitled to salary and the answer is yes, that as a federal civil servant, he entitled to his salary.

    “At one point, efforts were made to calculate his salaries from March 2013 till date, perhaps if not for what has happened now, they would have paid him salary in October.

    “So, we are talking on the premise of the dictates of the law and the law is made up facts and the facts are contained in the judgement of the Federal High Court,” he said.

    While adjourning the hearing indefinitely (sine die), Madaki warned that it was the duty of the House to prevent impunity in government.

  • Adeosun: only 40m Nigerians pay tax

    Adeosun: only 40m Nigerians pay tax

    Out of 70 million taxable adults in Nigeria, only 40 million pay taxes, the Minister of Finance, Mrs. Kemi Adeosun has said.

    She spoke yesterday at the first annual lecture of the Lagos State Professorial Chair of Tax and Fiscal Matters held at the Ade-Ajayi Auditorium, University of Lagos.

    Mrs Adeosun who chaired the lecture, said about 13 per cent of the active tax payers have their taxes deducted at source under Pay as You Earn (PAYE).

    She said tax policies cannot be rigid and needed regular reviews so that many more of the 30 million defaulters could be captured into the tax net.

    She said: “I have kept asking why the 30 million people have refused to pay taxes. Another major challenge is the fact that many Nigerians have other sources of income, yet they are only taxed only through the PAYE. Yet, they earn so much from part-time jobs, and extra businesses.”

    According to her, new tax policies in the country must capture online businesses, entrepreneurship and others such as the film industry, otherwise regarded as Nollywood.

    Mrs. Adeosun, who reiterated the importance of taxation to national development, noted that every developed country has a well developed tax policy and that Nigeria cannot be an exception.

    The lecture titled: “Policy, Legal and Administrative Imperatives in the Quest for Eradicating Multiplicity of Taxes in Lagos State” was delivered by Prof Abiola Sanni of UNILAG Law Faculty.

  • Reps summon Adeosun, others over military budget releases

    Reps summon Adeosun, others over military budget releases

    •As Army boss canvasses for Military Trust Fund

    The Minister of Finance, Kemi Adeosun and her Budget and National Planning counterpart, Sen. Udo Udoma have been summoned by the House Representatives to explain budget releases to the nation’s security agencies this year.

    The  Central Bank of Nigeria (CBN) Governor, Godwin Emefiele was also expected to appear alongside the others before House Committee on Army next Monday on the same issue.

    Chairman of the Committee, Rimande Shawulu made the disclosure yesterday during a one-day public hearing on the need to re-energise the nation’s security agencies to meet up with their primary responsibilities.

    Civil Society Organisations (CSOs) at the hearing include Civil Society Legislative Advocacy Centre,( CISLAC), Policy and Legal Advocacy  Centre (PLAC ) and Network on Police Reforms (NPR) among others.

    According to Shawulu, the current socio-economic and political situation of the country has made it neccesary for the military and other security agencies to be accountable.

    “Security agencies must reflect the huge funds they garner from private and public companies in their annual budgets to be said to be accountable,” he said.

    The Chief of Army Staff (COAS), Lt. Gen. Tukur Buratai said the military needed a National Defence Act to enhance its operations.

    Represented by Maj. Gen. Lamidi Adeosun of the Defence Headquarters, Buratai  also called for the establishment of a national Security Trust Fund.

    According to him, the  fund will provide a platform for the engagement of individuals and corporate entities for better funding of the security agencies.

  • Adeosun seeks new approach to curbing financial crimes, terrorist financing

    Adeosun seeks new approach to curbing financial crimes, terrorist financing

    •GIABA hails Nigeria’s anti-corruption initiatives

    Finance Minister, Mrs. Kemi Adeosun, has called for the adoption of a new approach to the fight against financial crimes and terrorist financing if states in West Africa were to succeed in their efforts to curb these crimes in the sub-region.

    She said unlike before, attention should now be directed at evolving preventive measures and other preliminary efforts, including strengthening existing agencies established to fight these crimes.

    The Finance Minister spoke in Abuja yesterday at the opening session of the 18th Ministerial Committee meeting of the Inter-Governmental Action Against Money Laundering in West Africa (GIABA).

    Represented by the Permanent Secretary, Federal Ministry of Finance, Mahmud Isa Dutse, Mrs. Adeosun said: “I want to state that it is not the arrest, investigation and prosecution of culprits only that make up the fight against the menace of money laundering and financing of terrorism as many would want to believe.

    “Much more is needed to be done in the administration, prevention and other preliminary efforts, much of which involve building, strengthening and administering as well as developing appropriate policies and practices for relevant anti-corruption, anti-money laundering and combating the financing of terrorism institutions.

    “Focus should also be centred on bringing the existing anti-money laundering and combating financial crimes (AML/CFT) institutions to the attention and understanding of all stakeholders.

    “Stakeholders need to have good understanding of these institutions – both local and international – that are in place to fight corruption, money laundering and financing of terrorism; what is to be done, by whom and the timeline required to do them,” Mrs. Adeosun said.

    GIABA’s Director General, Colonel Adama Coulibaly praised the Nigerian government for its various initiatives aimed at addressing the challenges of financial crimes and terrorist financing.

    He said “Recent strong measures taken by Nigeria, including the freezing of all bank accounts not covered by a bank verification number (BVN) to conduct transactions on all banking platforms in Nigeria for the benefit of the Public Treasury are to be hailed.”

    He said these measures “should be complemented with those expected by the Egmont Group and the international FATF community to definitively consecrate the independence of the Financial Intelligence Unit vis-à-vis other national entities involved in the fight.”

    Coulibaly called for the continued support and commitment of GIABA’s member nations to enable the agency deliver on its mandates.

  • Why oil revenue is not sustainable, by Adeosun

    Why oil revenue is not sustainable, by Adeosun

    To Finance Minister Mrs. Kemi Adeosun, it makes no sense to run the economy with its estimated 180 million population solely on oil. She says it is illogical to rank Nigeria among the traditional oil economies when the sector accounts for just 10 per cent of the Gross Domestic Product (GDP). In her article, entitled: “All change!!! Nigeria is not an oil economy”, the minister explains the need to urgently mobilise revenue from other sources, including taxation.

    Descriptions of Nigeria’s economy often include such phrases as ‘Africa’s largest oil producer’ and ‘the oil rich African nation’ but oil economies are typically characterised by low population densities and abundant oil resources.

    Saudi Arabia, with 10 million barrels of oil per day and 30 million people, Kuwait, with 2.7 million barrels of oil per day and four million people and Qatar, with 1.5 million barrels of oil per day and 2.5 million people are typical of such.

    These economies pursued an economic model that was built around a large government dependent almost entirely on oil revenue for funding. Such economies could afford to have low, or in some cases, no domestic revenue mobilisation, in the form of taxes. Tax to Gross Domestic Product (GDP) ratios of less than 10 per cent against the OECD average of 34.6 per cent could be justified especially in the era of high oil prices.

    For over three decades, Nigeria pursued this model. But things are changing, with the election of President Muhammadu Buhari in 2015, who was propelled into office under the mantra of ‘Change’. That clamour for change, in the areas of governance, security and economy, coincided with the collapse of global oil prices and a consequent huge deficit in government revenues.

    These circumstances provided the ingredients for an overhaul of the entire economic model.  The first and rather numbing conclusion of that exercise was that Nigeria is not actually an ‘oil economy’. With just two million barrels of oil per day and over 180 million people, simple mathematics tells us that 90 Nigerians share a barrel of oil compared to three Saudis, 1.44 Kuwaitis and 1.69 Qataris. With oil at just 10 per cent of GDP, Nigeria simply does not fit into the mould of the traditional oil economies.

    Interestingly, even nations who did legitimately fit into this narrow mould of high oil revenues and low populations, are abandoning what is now considered to be a flawed model. Thus, the imperative for Nigeria was even more urgent. Nigeria recalibrated its target peer group from the oil economies to the ‘oil plus’ economies such as Mexico and Egypt. This new peer group has diversified economies and tax to GDP ratios of 20 per cent and 16 per cent respectively, compared to Nigeria’s six per cent.

    Consequently, the change mantra had to be urgently applied to revenue mobilisation. Analysis of the data suggests that revenue mobilisation is potentially the master key to unlocking Nigeria’s huge growth potential by funding its ailing infrastructure including roads, power and rail.

    A cursory look at the effective tax rates paid by the huge multinational and local operators, as well as the data on illicit financial flows, indicates a pattern of systematic tax evasion at all levels.

    Recent statistics released by the Federal Ministry of Finance showed that Nigeria has just 14 million active tax payers from an economically active base of 70 million. Over 95 per cent of these are salary earners in the formal sector, just 241 persons paid personal income taxes of N20m ($65,573.77) in 2016.

    Taxing the high net worth and Nigeria’s huge community of entrepreneurs constitutes a critical but yet attainable target. The statistics for corporate tax payment shows the debilitating effects of base erosion and profit shifting as well as abuse of an overly generous tax incentive and duty waiver system.

    The historical government apathy towards revenue mobilisation is one of the effects of the mistaken identity that saw Nigeria perceive itself as an oil economy.

    This administration is determined to correct this identity crisis and all its concomitant effects.

    In that spirit, we launched an ongoing and well received, tax amnesty, ‘The Voluntary Asset and Income Declaration Scheme’ (VAIDS) is affording a nine-month window for Nigerian tax payers (both corporate and individual), to regularise their tax status in exchange for a guarantee of no interest, penalties, tax investigation or further audit. This amnesty follows successful initiatives in a number of countries, where tax evasion is a problem, such as Indonesia, Argentina, South Africa and India.

    It has been programmed to end just as the Automatic Exchange of Information (AEoI), which will provide Nigerian tax authorities with unprecedented levels of information on offshore assets, becomes effective.

    The initial signs suggest that Nigerians are responding positively to the new revenue narrative. Despite the emergence from a recession, tax revenues are showing early signs of growth. The Value Added Tax (VAT) shows 18.97 per cent year-on-year improvement. Over 800,000 companies, including some government contractors, that have never paid taxes have already been identified and are being audited. This is an unprecedented initiative that entails cooperation between federal and state governments. The Federal Ministry of Finance has also commenced a database project that combines data from the various arms of government, including bank records, property and company ownership, and customs records to create accurate profiles of those liable to pay taxes. The ministry has also placed one of the world’s premier private investigation agencies on retainership to trace overseas assets.

    Changing the Nigerian economic psyche is not an easy task. By its nature, tax mobilisation risks the popularity of any government, but the present administration understands that the short-term lure of political expediency must give way to the long-term best interests of Africa’s largest economy. Her energetic, young and growing population are deserving of the chance to experience a truly transformed, sustainable and growing economy.

  • Adeosun: banks still holding TSA money

    Adeosun: banks still holding TSA money

    Finance Minister, Mrs Kemi Adeosun has accused some Deposit Money Banks (DMBs)  of sitting on funds which they ought to have remitted to the Treasury Single Account (TSA).

    She spoke yesterday on Sunrise Daily, a programme on Channels TV.

    The Federal Government had since August, 2015, directed all Ministeries, Departments and Agencies (MDAs) to make payments into the TSA, arguing that it will promote transparency.

    Mrs. Adeosun said: “As far as I know, all the agencies are on the TSA; where there is work going on is that we have had information that some banks renamed accounts just before TSA, in other words, some banks are still sitting on our funds.

    “We’ve written to the bank MDs to say, look if you suspect that some funds may belong to the Federal Government, check with the Office of the Accountant General (of the Federation).

    “We gave them a window, some returned some money but we are going out to do some verification because we suspect that some of our money is still out there but the compliance has been good,” she said.

    Mrs Adeosun said the money generated by the Federal Inland Revenue Service (FIRS) does not go directly to the Federal Government but shared by the three tiers of government.

    “Firstly, N2.11 trillion is not a huge amount of money. It sounds very large. In the context of what Nigeria spends, it’s nothing,  in fact it’s woeful.

    “As I said, we’re tax to GDP of six per cent. It’s nothing to celebrate. Now let me explain about FIRS. FIRS collects company taxes and VAT (Value Added Tax), that is the money shared in FAAC every month.

    “So that money is being shared within the three tiers of government-federal, state and local government. The money being shared also includes oil revenue. FAAC of this month was N550 billion so that included FIRS money, customs and oil money. Those are the three constituents.

    “It’s almost like double counting when you look at FIRS on its own; so don’t think all that money is going to the Federal Government, no it’s shared amongst the three tiers of government. So it’s not that much,” she explained.

    In July, the Federal High Court in Lagos granted an interim order directing seven banks to remit the TSA funds in their custody.

    The affected banks are United Bank of Africa (UBA), Skye Bank Plc, First Bank Plc, Keystone Bank Plc, Diamond Bank Plc, Sterling Bank Plc and Fidelity Bank Plc.

    Skye Bank was the only deposit money bank that admitted to holding funds belonging to the Nigerian National Petroleum Corporation (NNPC).