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Tag: Adeosun

  • Govt to refinance debts with $3b, says Adeosun

    Govt to refinance debts with $3b, says Adeosun

    The Federal Government is to apply $3 billion in refinancing the legacy debts of the immediate past government, the Minister of Finance, Mrs. Kemi Adeosun, has said.

    She said the outlay is part of the $5.5 billion foreign loan being sourced from the international financial markets.

    Mrs. Adeosun, who spoke on Arise TV’s News Programme, said the proposed $5.5 billion loan is to refinance inherited debts to the tune of $3billion and new borrowing of $2.5 billion for 2017 Budget.

    “Let me explain the $5.5 billion borrowing because there have been some misrepresentations in the media in the last few weeks. The first component of $2.5 billion, represents new external borrowing provided for in the 2017 Appropriation Act to part finance the deficit in that budget,” she said, pointing out that “ the borrowing will enable the country to bridge the gap in the 2017 budget currently facing liquidity problem to finance some capital projects.”

    On the second component, she said: “We are refinancing existing domestic debt with the $3 billion external borrowing. This is purely a portfolio restructuring activity that will not result in any increase in the public debt.”

    Adeosun further noted that the country’s debt rising from N7.9 trillion in June 2013 to N12.1 trillion in June 2015, despite the fact that only 10 per cent of the budget was allocated to capital expenditure when oil price exceeded $120 per barrel.

    She said the President Muhammadu Buhari-led administration was investing in critical infrastructural projects such as roads, rails and power in order to deliver a fundamental structural change to the economy that would reduce the nation’s exposure to crude oil.

    “Under this dispensation, we are not borrowing to pay salaries. If all we do is to pay salaries, we cannot grow the economy. This administration is also assiduously working to return Nigeria to a stable economic footing. In light of this, the government adopted an expansionary fiscal policy with an enlarged budget that will be funded in the short term, by borrowing,” Adeosun said.

  • FG needs $36bn to fix rail lines in Nigeria- Amaechi

    FG needs $36bn to fix rail lines in Nigeria- Amaechi

    As Senate drills Adeosun, Amaechi over $5.5 billion loan request

    The Federal Government yesterday said that the sum of $36 billion is required to complete its rail projects in parts of the country.

    The Transportation Minister, Chibuike Amaechi, stated this when he appeared before the Senate Committee on Local and Foreign Debts to defend the $5.5 billion loan request of President Muhammadu Buhari.

     Apart from Amaechi, Finance Minister, Mrs. Kemi Adeosun, Minister of State for Aviation, Hadi Serika, were also questioned over the desirability of the controversial loan.

    Amaechi who listed various rail projects in parts of the country including Lagos to Kano, Costal rail line, Kano to Kaduna, Lagos to Calabar, Port Harcourt to Warri, Onitsha, Aba, noted that if the total cost is summed up, would amount to about $36 billion.

    Amaechi said, “If you put it all together, the total cost of the entire rail projects will amount to about $36billion. Actually we don’t have the money. But it’s an ambitious plan. We really have to start something somewhere and see how far we go”

     He added, “On the issue of borrowing, I have not seen any country in the world where real construction is done by Public Private Partnership (PPP).

    “The reason is that it has long term benefit. It completely takes away freight activities and put them on the track and reduce the impact on the road.

    “We have something that is going to happen between now and December. We have almost concluded arrangements with General Electric to take over the narrow gauge.

    “And after the assessment by GE, the narrow gauge cannot take up to 17 locomotives. Before December, they will bring in between four and six locomotives with 100 wagons. We are also making arrangements to bring in coaches so that we can convey passengers from Lagos to Kano so that our economic activities will improve.”

    The minister said that President Buhari had directed that the rail line projects be extended to cover all 36 State Capitals.

    He told the committee that part of the $5.5 billion loan would be used to fund the Itakpe to Warri, Kano to Kadun and Port Harcourt to Calabar portion of the rail projects.

    President Buhari had said in a letter to the National Assembly asking for the approval for the $5.5 billion loan that $2.5 billion was being borrowed to fund the Mambilla Hydropower Project, Construction of a Second Runway at the Nnamdi Azikiwe international Airport, counterpart funding for Rail Projects and the Construction of the Bode-Bonny Road, with a Bridge across the Opobo Channel”

    Chairman of the committee, Senator Shehu Sani raised issues which he wanted the government functionaries to address to enable his committee advise the Senate properly.

    Sani said, “Some of the questions Nigerians and indeed our constituents have asked repeatedly include: What has the Federal Government done with the reported recovered loot allegedly traced to the previous administration? What role can such recovered monies play in the 2017 budget financing? How much indeed has been recovered? Has the National Assembly appropriated the recovered loot for government expenditure?

    The Kaduna Central lawmaker insisted that all actions and decisions with respect to the loan request by his Committee and indeed this Senate will responsibly be done only on its merits.

    He said, “l will advise therefore, that as representatives of Mr. President, you put your best foot forward and be as convincing as possible with facts and figures for the Senate to fully have your back, with respect to these requests.

    “It has become clear that if Nigeria must borrow, we must borrow responsibly, we cannot afford to mortgage the future of our unborn generation; if we must bequeath to the future generation a pile debt, it must be justified with commensurate infrastructural proof of the value of the debt.”

    The committee chairman said “the payment plan of this debt will undoubtedly last the length of our lifetimes and possibly beyond. We must live behind a legacy that will appease and answer the questions the next generation of Nigerians will ask.

    “We must not allow our children and grand children be enslaved with chains of debts. Eurobond must not be another bondage to Europe.”

    Mrs. Adeosun on her part said that $2.5 billion of the loan request was already approved in the 2017 budget

    She said that the $2.5 billion was specifically to finance projects in parts of the country.

    She said that the duration of the loan could be anything from five to 30 years which would be determined when they get to the market.

    Represented by the Director-General of the Debt Management Office, Patience Oniha, the minister also said that the $3 billion is to upset local debts.

    She insisted that it is not healthy for the country to have such huge local debt hanging over the country.

    She said, “Borrowing at 7% interest rate in the international market is cheaper than borrowing at 17% or 18% interest rate in the local market.”

    “It is not the first time government is borrowing long term. It was done in the 60s. Hospitals, schools, roads have long term effect. They don’t go away. We are not postponing any payment. What happens is that  when they mature, we roll them over. It is not a case of default

    The government functionaries said that the $5.5 billion loan request has nothing to do with the virement request of the Federal Government.

    The committee members who wondered why the government could not resort to local resources in servicing the local loans, said that Nigerians must be told told how the projects the loans were to being sought for would assist in servicing and paying back the debts.

    On the Abuja Airport project, minister of state for aviation Hadi Serika, said he did not know the cost of the second Abuja runway which part of the $2.5 billion.

    The minister said that the cost has not been determined.

  • World Bank: no rift with Adeosun over borrowings

    World Bank: no rift with Adeosun over borrowings

    The World Bank Group, yesterday, denied disagreeing with the Minister of Finance, Mrs. Kemi Adeosun, over foreign borrowings by the Federal Government to stimulate the economy and finance infrastructure projects in the country.

    A statement from the ministry said the World Bank, through its Senior Communications Officer, Mr. Rachid Benmessaoud, sent a mail to Mrs Adeosun insisting that “the media misrepresented and quoted out of context the comments made by its Senior Economist for Nigeria, Gloria Joseph-Raji, at an event in Abuja.”

    According to the statement, Benmessaoud was quoted to have said: “On October 11th, during the launch of Africa’s Pulse, the World Bank’s biannual analysis of African economies, World Bank Senior Economist for Nigeria, Gloria Joseph-Raji, was asked by a reporter to share her views on the Federal Government’s plan to increase external borrowing.

    “At no point did she mention that the World Bank and the Federal Government of Nigeria (FGN) disagree on the need to rebalance the country’s debt portfolio. Where expenditures exceed revenue, governments will need to borrow.

    “In doing so, the Federal Government is trying to rebalance its portfolio towards more external borrowing with lower interest rates and longer maturities.”

    The World Bank Senior Economist was quoted by Benmessaoud to have commended the Nigerian Government’s effort to rebalance its portfolio in order to lower the cost of its borrowing, as outlined in its 2016-2019 medium term debt management strategy released last year.

    “The use of IDA concessional financing, among others, is supportive of the FGN’s effort in this regard, with the added focus on poverty alleviation and building shared prosperity in Nigeria.

    “The latest issue of Africa’s Pulse points out that growth is Nigeria is projected to pick up from 1.0 per cent in 2017 to 2.5 per cent in 2018 and 2.8 per cent in 2019. While Government debt in 2017 is projected to rise, it remains low in Nigeria,” Joseph-Raji was further quoted to have stated.

    The World Bank spokesman expressed the Bank’s full commitment to help the Federal Government restore macroeconomic resilience as well as strengthen ongoing economic recovery and achieve sustainable inclusive growth.

  • FG releases Sukuk bond proceeds for 25 road projects

    FG releases Sukuk bond proceeds for 25 road projects

    The Federal Government on Thursday released the proceeds of the N100 billion Sukuk bond for 25 road projects across the country.

    The Minister of Finance, Mrs. Kemi Adeosun, handed over the N100 billion proceeds cheque to the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, in Abuja.

    The federal government had issued the sovereign debut Sukuk of N100 billion in September, which was successfully completed last week.

    The Sukuk bond has a tenor of seven years.

    Adeosun said the offer was oversubscribed to the tune of N105.87 billion.

    She also said the milestone was a sign of confidence in the Nigerian economy and the administration of President Muhammadu Buhari.

    The minister added that the Sukuk proceeds would unlock the potentials of Nigeria.

    She said: “This is the first Sukuk bond issuance for Nigeria. It is about financial inclusion and deepening of our financial markets. The proceeds will be used to further support government capital spending for 2017 – the construction and rehabilitation of 25 key economic roads across the six geo-political zones of the country.”

    “The roads will ease commuting, spur economic activities across the country and further close our infrastructural gap.”

    “Each of the geo-political zones of the country is expected to receive the sum of N16.67 billion for road projects in their respective zones.

    The North Central and South- South Zones accounted for five each of the 25 key economic road projects, while the North East, North West and South East have four road projects each.

    “Three projects are to receive funding from the Sovereign Sukuk proceeds in the South West Zone.”

    Earlier, Fashola commended the Finance Minister, the Director-General of Debt Management Office, Ms. Patience Oniha and the financial advisers for the bond issuance for their painstaking efforts aimed at realising the milestone.

    He assured the ministry’s contractors that the federal government was committed to the funding of its infrastructural projects across the country.

  • FG spent N200bn on road development in 2016 — Adeosun

    FG spent N200bn on road development in 2016 — Adeosun

    The Minister of Finance, Mrs. Kemi Adeosun, said the Federal Government invested the sum of N200 billion on roads in 2016.

    She said the amount is part of N1.2 trillion earmarked for capital projects to ensure ease of doing business.

    Adeosun disclosed this at the Nigerian Stock Exchange (NSE) and Bloomberg Chief Executive Officer roundtable held in Lagos on Friday.

    She said the N200 billion was against N90 million earmarked for road construction in 2015.

    According to her, government will continue to prioritise infrastructure development to unlock growth potential.

    The minister said diversification of the economy would not be achieved without a good transportation system and power supply to improve ease of doing business.

    She said the country was vast, adding that to actualise its potential, infrastructure development was crucial for sustainable growth and development.

    “For the past two years in Nigeria, the road had been rough in economic terms but the worst times are over and we have the opportunity to grow,’’ Adeosun said.

    According to her, Nigeria cannot rely on oil to grow, as oil contributes 10 per cent of the Gross Domestic Product (GDP) and 60 per cent of the government revenue.

    The minister added: “We must not rely on oil but must use the oil revenue to generate activities in other sectors of the economy.

    “We cannot benchmark ourselves with Saudi Arabia because their oil production was far away from us.

    “They have 30 million populations and generate 10 million barrels of oil every day and Nigeria with 190 million generates 2.2 million barrels of oil every day.”

    Meanwhile, the Federal Government is concluding arrangements to go after multinational companies and other major operators in the Nigerian economy that engage in tax-evading practice of shifting their profits from their Nigerian operations to companies abroad in order to evade payment of taxes to the Nigerian government.

    Government will also ramp up tax identification, assessment and collection across the country, with a special focus on mid to high networth individuals, in a concerted effort to increase tax revenue and diversify the national revenue base.

    Mrs. Adeosun outlined these measures yesterday  at the CEO Roundtable organised by the Nigerian Stock Exchange (NSE) and Bloomberg in Lagos.

    She said the government was determined to implement the Global Convention on Base Erosion and Profit Shifting (BEPS) that will enable it to track companies which generate profits in Nigeria but shift these profits to countries or jurisdictions where little or no tax is payable. The Federal Executive Council had recently approved the signing of the global convention on BEPS.

    “This practice harms Nigeria and it must stop. Nigeria’s tax to GDP is one of the lowest levels in the world,” Adeosun told a group of chief executives and business leaders.

    According to her, Nigeria needs a sustainable revenue base that will deliver the economic growth that the citizens are yearning for.

  • Adeosun: there’s hope for Nigeria

    Adeosun: there’s hope for Nigeria

    Finance Minister Mrs. Kemi Adeosun yesterday urged Nigerians to keep hope alive, as the nation’s recuperating economy would soon be total.

    Adeosun, who addressed reporters after a church service at the Treasure House of God, Abeokuta, Ogun State, said signs of the revival of the economy would be felt in every sector.

    The minister, who was at the church to celebrate with the founder, Pastor Adeseye Senfuye and the congregation on their 20th anniversary, said the recession was “just a phase that fizzled out.”

    Her words: “The message I have for Nigerians is a message of hope and encouragement. Yes, I believe Nigerians are going through difficult times.

    “But we are very confident that by God’s grace, God that started the work will finish it to everybody’s satisfaction. The recession is a phase and we are not staying there.

    “God will turn around things for Nigeria. He knows why we are passing through this stage and I know we will overcome.”

    Pastor Senfuye attributed the heights attained by the church in preaching the gospel and winning converts for Christ in the last 20 years to God’s faithfulness.

    He advised Nigerians to imbibe charity and holiness, to build a great nation.

  • Adeosun, G24 discuss tax revenues, compliance

    Adeosun, G24 discuss tax revenues, compliance

    Boosting tax revenues and compliance to drive sustainable economic development in Nigeria is featuring prominently in Finance Minister  Kemi Adeosun’s discussions  with fellow finance ministers in the G24 Group at the ongoing International Monetary Fund (IMF)/ World Bank Spring Meetings in Washington D.C.

    She said at the forum that revenue mobilisation is critical to the success of the nation’s economic reform agenda.

    “We have an unacceptably low level of non-oil revenue, and much of that is driven by a failure to collect tax revenues,” she said.

    “With a tax to the Gross Domestic Product ratio of only six per cent, one of the lowest levels in the world, we have a lot of work to do, if we are going to build a sustainable revenue base that will deliver inclusive growth.

    “Our data gathering programme over the last year has now given us the tools we need to be more aggressive at pursuing tax avoiders, both domestically and abroad.”

    Adeosun pointed out that just as some of her contemporaries in the G24 have done successfully in their countries, Nigeria is focusing  on tax in 2017 through an asset and income declaration scheme to address its low tax revenue collection and ensure improved compliance, a broader tax base and more sustainable revenue.

    The minister also stressed the need for strong budget implementation and transparency to create trust and accountability in government, saying: “While we focus on raising revenues and bringing people into the tax system, we must be equally aggressive in our approach to budget implementation and transparency.

    “Our people must know where their hard-earned tax contributions are being spent and the impact that they are having on national development and the daily lives of citizens. This will be a core focus for us.”

    The minister met separately with the ratings agencies Moody’s and Fitch to update them on progress towards economic reform objectives, and with the World Bank country team to discuss the status of ongoing projects in Nigeria and the pipeline of projects for 2018.

    She is due to attend meetings on closing the financing gap for water, affordable housing finance, food security and nutrition in the coming days as part of government’s focus on sustainable solutions to some of Nigeria’s most pressing social challenges.

  • Adeosun seeks global backing against illicit financial flows

    Adeosun seeks global backing against illicit financial flows

    Finance Minister Mrs. Kemi Adeosun has called for greater collaboration between African governments and the international community to check illicit financial flows (IFFs), to drive revenue growth and improve efficiency in government.
    Speaking yesterday at the IMF Spring Meetings in Washington D.C, she said there was need to check IFFs from Africa, to enhance governments’ revenue and deliver sustainable economic growth.
    “The government is focused on resetting the Nigerian economy. To improve non-oil revenues, we have to address illicit capital flows. When stolen money is transferred from Nigeria or other African countries, there are too few questions asked by those countries that receive the funds. But when we identify those funds as stolen and seek to recover them, there are too many questions being asked,” she said.
    Adeosun added that a lot of funds are sitting in foreign banks which government has spent over a decade trying to recover.
    “That is money that could deliver significant value for Nigeria as we seek to increase spending on critical infrastructure and establish a basis for long term sustainable growth. I hope that the Automatic Exchange of Information scheme coming into force next year will be a step towards achieving greater transparency,” she said.
    “We need more collaboration among parliamentarians in Africa, and across the World to ensure that this situation improves and that recipient countries are held to account.”
    On the domestic agenda to ensure significant reductions in ‘leakages’ of public funds, and improved efficiency in public expenditure, the minister said: “We are going after those who have stolen our money. We have put in place a very successful whistleblower programme that is delivering results, and allows those who report illicit activity to receive up to five per cent of any funds that we recover. We are also significantly improving our financial management controls to ensure that it is considerably more difficult for public funds to be diverted. We have to do more though”.
    “That means collaboration with the legislature. We need tighter tax and financial reporting legislation and to ratify bilateral agreements so that our enforcement agencies are empowered to deliver the results that we need.”
    The minister said to create the basis for long-term growth, government needs to invest in infrastructure.
    “Achieving energy sufficiency and achieving agriculture and food security are two of the execution priorities we have identified in the Economic Recovery and Growth Plan and we are looking forward to advancing our ongoing conversations with multilateral lenders on these priorities over the coming days as we look to accelerate implementation,” she said.

  • Reps quiz Adeosun, Udoma over N302.4b pension arrears

    Reps quiz Adeosun, Udoma over N302.4b pension arrears

    The House of Representatives yesterday grilled the Minister of Finance, Mrs Kemi Adeosun and her Budget and National Planning counterpart, Udoma Udo Udoma, over the N302.4 billion pension arrears.

    The lawmakers demanded to know what the executive was doing to offset the outstanding pension liabilities both under the Defined Benefit Scheme (DBS) and the Contributory Pensions Scheme (CPS).

    While summoning the ministers last week, House Speaker, Yakubu Dogara  said the ministers and heads of relevant agencies must appear before the Green Chamber to find a realistic solution to the intractable problem of outstanding pension payments.

    But both Adeosun and Udoma while making presentation pleaded for more time to pay the outstanding saying the Federal Government only on Wednesday paid N54 billion out of the outstanding pension arrears.

    The challenge, according to the ministers was due to the inability to reconcile the figures between the relevant pension administration agencies.

    According to Mrs Adeosun, the situation had been on before the current administration and the high pension debt had been “consistent under appropriation for years that lead to the current problem”.

    She told the lawmakers that just a day before her appearance, the Federal Government had released  funds for the payment of pension arrears.

    On his part,  Udoma  said the president has set up a committee headed by the Ministry of Finance to resolve the intractable pension problem which he said was inherited.

    He said the Federal Government was up to date in terms of pensions payments, adding that an efficient and prompt payment of pension and gratuity would soon come into force as soon as the inter-ministerial committee comes up with harmonised data base.

    “Pension is something that the president is really concerned about. He thanks the House for highlighting the issue. He has directed that this is an issue that must be resolved.

    “The numbers will be reconciled and if there is any impact on the 2017 budget, we will approach the National Assembly,” he said.

    The minister also hinged some of the challenges on limited resources, saying government views salaries and pensions  payment with great importance which is the reason for the items being number one priority. “Half of the total of projected revenue in the 2017 budget is to be used to pay wages and pension,” he said.

    But members were not happy with the explanations of the minister. Members such as Betty Apiafi, Zakari Mohammed , Barde Yakubu, Obinna Chidoka, Aliyu Madaki and a host of others, expressed displeasure over this.

    Minority Leader, Leo Ogor said government was a continuum and no excuse would suffice. He said since the ministers have said the president has set up a committee to liaise with relevant pension agencies, “ we should be looking at the time frame with which they will submit their report.”

  • Reps summon Adeosun, Ngige over N302.4b pensions liabilities

    The House of Representatives yesterday summoned the Minister of Finance, Kemi Adeosun and her Labour counterpart, Chris Ngige to appear before it. They are to explain how the Federal Government intends to offset its N302.4 billion outstanding liability to pensioners in the country.

    The Speaker of the House, Yakubu Dogara who issued the summons yesterday said the ministers and heads of relevant agencies must appear before the Green Chamber on Thursday next week to find a realistic solution to the intractable problem of outstanding pension payments.

    “Let them come and take centre stage and tell Nigerians what can be done to get out of this situation,” he said.

    Dogara spoke after listening to the pleas of the President of the Nigerian Union of Pensioners, Dr. Abel Afolayan, who led members to meet with him at the National Assembly. He appealed to the House to assist in getting the Federal Government to make provision of sufficient funds in the 2017 appropriation bill towards offsetting  the outstanding  pension liabilities both under the Defined Benefit Scheme (DBS) and the Contributory Pensions Scheme (CPS).

    According to the Speaker, the provision of section 173 (1) and (2) of the constitution guarantees that pension is a right and must not be withheld from deserving Nigerians.

    “Pension is a right, so it means that the Federal Government is in debt,”  he said, adding by paying the pension the government was not doing a favour to anyone and  should not default except there are plausible reasons why it should not be paid.

    Dogara said anyone who has spend the better part of his life serving the country should not be subjected to what pensioners go through in the country.