The Nation Newspaper

Tag: Zainab Ahmed

  • FEC okays new AU import levies

    The Federal Executive Council (FEC) meeting on Monday approved a new import levy for sustainable financing of Nigeria’s membership subscription in the African Union (AU).

    This was disclosed by the Minister of Finance, Zainab Ahmed at the end of about seven hours FEC meeting.

    According to her, FEC approved a rate of 0.2 per cent as the new import levy on Cost, Insurance, and Freight (CIF) that will be charged on imports coming into Nigeria from AU countries.

    She explained that there are some exceptions on goods originating outside the territory of member countries.

    She said: “The Federal Executive Council meeting approved a new import levy for sustainable financing of Nigeria’s membership subscription in the African Union. It approved a rate of 0.2 per cent as a new import levy on CIF  that will be  charged on imports coming into Nigeria but with some exceptions.

    “The exceptions includes goods originating from outside the territory of member countries that are coming into the country for consumptions.

    Read Also: Osinbajo presides over FEC

    “It also includes goods that are coming in for aid and also it includes goods that are originating from non-member countries but are imported through specific financing agreements that ask for such kinds of exemptions.

    “It also exempts goods that have been ordered and are under importation process before the scheme was announced into effect.”

    The purpose of this new levy, she said, is to enable the AU member countries pay on a sustainable basis their subscriptions to the Union.

    She said: “The council also approved that for Nigeria knowing what will accrue from this new levy will be more than what is required as subscriptions to the AU, that the balance that will be left will be put in a special account in the Central Bank of Nigeria and will be used to finance her subscriptions to multilateral organisations such as the World Bank, African Development Bank, Islamic Development Bank and institutions like that.

    “And if there is any excess left from that in the revenue pool, it will be used to financed the budget.”

  • FEC approves N4.03 billion for FCT infrastructure

    The Federal Executive Council on Monday approved a total of N4.03 billion for various infrastructural developments in the Federal Capital Territory (FCT).

    The Minister of FCT, Mohammed Bello briefed State House correspondents at the end of FEC meeting chaired by Vice President Yemi Osinbajo at the Presidential Villa, Abuja.

    He was with the Minister of Information, Lai Mohammed, Minister of Budget and National Planning, Udoma Udo Udoma, and Minister of Finance, Zainab Ahmed.

    Bello said that FEC approved all the nine memoranda from the ministry which are expected to improve infrastructure in the city.

    The first memo, he said, is for the award of contract for the rehabilitation of failed walkways within the Wuse District of the Federal Capital City at the cost of N1.9 billion with a completion period of twelve months.

    According to him: “The second contract was for the preparation of the electricity master plan for Phase IV of the Federal Capital City at the cost of N189 million with a completion of ten months. As you already know, phases I and II have their own master plan.

    “The third contract is the design of infrastructure for what we called institution and research district which is in phase III of the Federal Capital City at the cost of N197 million.

    “The fourth is engineering design of infrastructure for sector G and H in Phase III of the Federal Capital City awarded at the cost of N118.575 million with a completion period of six months.

    “The fifth is for the design of inter-skeptic sewage line for the federal capital city in the total sum of N125 million.

    “The next one is the contract for the construction of the School of Science at the permanent site of the FCT College of Education Zuba at the cost of N701 million with a completion period of 42 weeks.

    “The other contract is the final engineering design of infrastructure and production of tender documents for Dawaki District in the sum of N259 million with a six moth completion period.”

    Read Also: FEC to hold final session on Monday

    The Minister went on: “Also a contract for engineering and infrastructure design for a 41km Nyanya-Guruku-Mpape which will burst out at the Outer Northern Express Way which is called Murtala Mohammed Expressway at the cost of N174 million with completion period of six months.

    “That is the expressway from the city that goes right through to Zuba. Ultimately that road is going to give another access entry point into the city and also will open up that section of the city for development.

    “The next one is for the supply and installation of a city scanner machine for the Maitama District Hospital with a delivery period of eight weeks at the cost of N190 million. While the other contract is for engineering infrastructure for Kabusa District at the total cost of N179 million.”

    Udoma Udo Udoma said that FEC was impressed with the 2.01% first quarter GDP figure released by National Bureau of Statistics (NBS) on Monday.

    Noting that FEC was encouraged by non-oil sector contribution to the economic, he said that the newly released first quarter figure is the best since 2015.

    He said: “The GDP numbers indicate continuing economic growth. In the first quarter of 2019, the economic recorded a real GDP growth of 2.01%.

    “This growth reflects the strongest first quarter performance in GDP since 2015. The first quarter is always the weakest in terms of growth.

    “The federal executive council is most encouraged by the fact that growth continues to be driven by the non-oil sector which affects most of our population.

    “Also agriculture grew by 3.17% and this represents the strongest growth in agriculture since the fourth quarter in 2017.

    “The council is also pleased to note that there are improvements in other economic indicators such as the inflation rate, which tend to have high inflation during an election period but it has been stable. Our external reserves and our trade balance have also remained healthy over the period which our exchange rate to the dollar has also been stable.”

  • States to get N649bn Paris Club fund

    State governments will soon smile to the banks as the federal government has concluded plans to commence the final phase of the Paris Club debt refunds.

    Addressing journalists in Abuja on Thursday on the state of the economy, Minister of Finance Zainab Ahmed disclosed: “The total sum of N649.434 billion was verified by the Ministry as the outstanding balance to be refunded to the State Governments.”

    She also revealed the payments made by the Central Bank of Nigeria as at March 2019 stands at N691.560 billion.

    “The increase in CBN payments partly arose from exchange rate differential at the point of payment,” she said.

    Ahmed, while not divulging the status of the states with regards to the Paris Club disbursements noted “some states still have outstanding balances, which will be refunded, in due course.”

    The finance minister also stated that a total sum of N4.8 trillion was distributed to the three-tiers of government between September 2018 and April 2019 from the Federation Account noting “the sum of N784.7 billion realized from value added tax (VAT) for the same period was also shared.”

    Speaking on Nigeria’s growing debt profile, the finance minister stated “the debt increase from N12.2 trillion to N23.0 trillion is by design.”

    Read Also: FG pays $5.4bn Paris Club Refund to states

    The Federal Government, she said “designed the Economic Recovery and Growth Plan (ERGP) to reflate the economy to take us out of recession when we came on board and we made an assessment, it was clear that our country was going into recession.

    “When we did a research on the best way to reverse the recession was to reflate the economy and that means putting resources in the economy so that consumption will increase.”

    Based on government’s findings, she said they “designed the ERGP to borrow in the first, second and third years and in the fourth year the borrowing was supposed to start reducing. That is exactly what we have done.”

    Defending the borrowing, Zainab Ahmed said government “made sure that we borrowed to finance capital projects.

    “At the same time we went into recession there were other countries similar to Nigeria that went into recession. Some of them are still not out of recession but because of the method we adopted.

    “But the consequence of course is the increase in debt and that is why the ministry of finance and all its agencies are working to make sure that we increase revenues.”

    She reiterated “at 19.09% Debt to GDP ratio we still are the lowest comparative to countries like Brazil, South Africa that all have an average of 56% debt to GDP ratio.

    “If you look at our budget the debt service to GDP ratio is 30% but because revenues underperformed it went as high as 50% to 55%  and in some months up to 60%. So if our revenues perform optimally we are in a good place as far as revenues are concerned.”

    The finance minister said the country’s External Reserves grew from $28.3 billion in 2015 to US $44.69 billion as at May 13, 2019.

    “This represents a significant improvement that has helped to stabilize the economy, including stabilizing our exchange rates,” she stated.

    Also the Foreign Exchange (FX) market, she said, “remains relatively stable because from 2017 to now there is a significant convergence of the NIFEX and NAFEX windows and they have in fact merged by the end of November 2018.”

  • Weak revenue profile hindering budget operation – FG

    Weak revenue generation profile is hindering ability to operate the national budget, the federal government has cried out.

    A statement from the Ministry of Finance signed by the Special Adviser to the Minister of Finance on Media and Communications, Mr Paul Ella Abechi, said the Finance Minister lamented the nation’s poor revenue generation drive.

    According to Abechi: “The Minister acknowledged and pointed out the challenge of revenue generation by the country.

    “What we have is revenue problem and when revenues perform the aggregate rate of 55 percent it hinders the ability to operate our budget.

    “So it hinders our ability to service all categories of expenditures including salaries, allowances, capitals as well as debts.”

    The Minister of finance Mrs. Zainab Ahmed was said to be clarifying Nigeria’s debt to GDP position, which was a major issue at the just concluded World Bank IMF Spring meeting in the USA.

    Ahmed said the Ministry is not resting on its oars with regards to boosting the nation’s revenue.

    According to her: “What we are doing at the Ministry of Finance is concentrating and enhancing of our revenue and collection capacities.”

    She was however happy Nigeria’s borrowing remains at 19 percent to the Gross Domestic Product (GDP).

    According to her:  “In the borrowing, we are still at 19 percent to GDP, our borrowing is still low.

    Read Also: Terrorism, a complex war – Buratai

    “What is allowed by our Fiscal Responsibility Act is the maximum of 25 percent of our GDP compared to other countries like; Ghana, Egypt, South Africa, Angola and Brazil and we are the lowest in terms of borrowing.”

    On alleged planned removal of subsidy, the Minister said:  “Difference on the issue of subsidy as compared to previous regimes where subsidy was paid to marketers, but this time around NNPC is the sole importer of petroleum products.

    “And so when they import, they deduct that cost of business before they remit the little money to the federation account. So that is completely different.”

    She also added: “It is more cost effective, it is cheaper and what is being done now is easier to monitor.”

    The Minister also maintained and assured Nigerians that there is no intention of subsidy removal as government has not come up with any plan in that direction.

    “We are not there yet and we discuss this periodically under the Economic Management Team but we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work here.

    “So it is still work in progress and so there is no intention to remove fuel subsidy at this time.”

  • N24.39tr debt: Nigeria not in debt crisis, says Fed Govt

    NIGERIA is not in any way near a debt crisis despite its N24.39 trillion (about $79.44 billion) debts, the Federal Government has said.

    The debt figure, which, as at December 31, 2018, comprised Eurobond loans, facilities from the World Bank Group, China and Africa Development Bank Group constitute over 80 per cent of the total debt stock.

    It represents a year-on-year growth of 12.25 per cent and is higher than the 2017 figure by N2.662 billion.

    Finance Minister Mrs. Zainab Ahmed, who made the disclosure at the sidelines of the just-concluded International Monetary Fund/World Bank Spring Meetings in Washington D.C, explained that despite warnings by the multilateral institutions, the country was not in any way near a debt crisis.

    Her position was collaborated by FSDH Research latest report on Nigeria’s debt position titled: Is Nigeria public debt too high? Analysts at the Lagos-based investment company argued  that since Nigeria’s public debt-to-Gross Domestic Product (GDP) ratio  was still under 20 per cent, precisely 18.89 per cent, it can still get more loans to reach the 25 per cent benchmark set for itself and the 56 per cent international threshold set for countries in Nigeria’s peer group.

    REad also: No agreement with IMF on removal of fuel subsidy – Minister

    The analysts at FSDH Research said Nigeria still has room to borrow an additional N7.89 trillion before reaching a threshold of about N32 trillion.

    FSDH Research data showed that countries like China, South Africa, India, UK, Brazil and the United States (U.S.) all have high debt-to-Gross Domestic Product (GDP) of 50 per cent, 57 per cent, 70 per cent, 87 per cent, 88 per cent, 91 per cent and 106 per cent respectively.

    It, however, stressed that these countries have successfully managed to deploy their borrowings into activities that can stimulate revenue generation including education, transportation, construction, security, technology and other growth-enhancing infrastructure.

    The FSHD report explained that by utilising the borrowed funds in areas that improve the ease of doing business in their countries, they have been able to grow their economies further, create job opportunities, and create more avenues for their governments to grow their revenue.

    It said: “The 25 per cent benchmark gives Nigeria a leeway to borrow an additional N7.89 trillion given her level of GDP. But before you are quick to celebrate, there is the need to consider one very important factor: the ability of the country to service the debt without causing untold hardship on the country.

    “In measuring the ability of a country to service her debt obligations, we look at the ratio of domestic debt service-to-Federal Government of Nigeria Federation Accounts Allocation Committee (FAAC) allocation.”

    The IMF had during the Spring Meetings warned Nigeria and other emerging market countries taking excessive loans from China to consider the terms of such facilities, especially, their compliance to the Paris Club arrangements.

    Director, IMF Monetary and Capital Markets Department, Tobias Andrian, said there was nothing bad in borrowing from China, except that the terms of such loans are always questionable.

    He said: ‘Loans from China are good, but the countries should consider the terms of the loans. And we urge countries that when they borrow from abroad, that the terms are favorable for the borrower, and should be conforming to the Paris Club arrangements”.

    Continuing, Andrian, who spoke on the Global Financial Stability Report (GFSR) said: “Let me reiterate that in many frontier markets, we see that the share of debt that is not conforming to the Paris Club standards is on the rise. And that means that if there is any debt restructuring down the road one day that can be very unfavorable to those countries. So, the borrowing terms, the covenants, are extremely important. And we do see a deterioration in that aspect.”

    But Mrs. Ahmed explained that while government borrows to deliver on its promises, it is also mindful of rising debt burden, which eats up about 25 per cent of the country’s annual earnings.

    The minister said: “The World Bank and IMF are cautioning us on the rate at which we are borrowing. They are also cautioning us on the need to build fiscal buffers because the global economy is going to be facing some risks and we agree with that.

    “We are very mindful of the level of our borrowings. Our borrowing is very much within fiscal limits right now. What we are doing is to increase our revenue generating capacity to make it easier for us to meet our debt obligations, routine and capital expenditure.”

    Responding to concerns on Chinese loans to finance the Idu-Kaduna, Lagos-Ibadan and Abuja light rail projects, expansion of four airport terminals and some hydroelectric projects across the country, the minister said: “To borrow, we go through several processes of assessments as well as negotiations. We make sure we get the best possible terms and whether we are borrowing from financial institutions or in Europe or China or anywhere else, we try to get the best rates of borrowing. So far, the conditions we have got are very good ones.”

    Mrs. Ahmed said the government of President Muhammadu Buhari is committed to ensuring that the country grows in a manner that would bring many people out of poverty.

    According to her, it is for this reason that the government takes its social investment programmes like the school feeding, Conditional Cash Transfers to the poor and vulnerable and TraderMoni programme, very seriously.

  • Rising Debt: We are mindful of our borrowings, says FG

    The Minister of Finance, Mrs Zainab Ahmed says while government borrows to deliver on its promises, it was also mindful of rising debt burden, which eats up about 25 per cent of the country’s annual earnings.

    Ahmed said this in an interview with the News Agency of Nigeria (NAN) on the side-line of the just concluded IMF/World Bank meetings, which took place in Washington DC from April 9 to 14.

    Nigeria currently has an external debt stock of about 24.27 billion dollars as at December 31, 2018.

    Euro bonds, loans from World Bank Group, China and Africa Development Bank Group make up over 80 per cent of the country’s debt stock.

    Ahmed insisted that in spite of warnings by the IMF and World Bank, the country was not in any way near a debt crisis.

    “The World Bank and IMF are cautioning us on the rate at which we are borrowing.

    “They are also cautioning us on the need to build fiscal buffers because the global economy is going to be facing some risks and we agree with that.

    “We are very mindful of the level of our borrowings. Our borrowing is very much within fiscal limits right now.

    “What we are doing is to increase our revenue generating capacity to make it easier for us to meet our debt obligations and our routine as well as capital expenditure,’’ she said.

    NAN Correspondent raised concerns about whether the Chinese loans to finance the Idu-Kaduna, Lagos-Ibadan and Abuja light rail projects, the expansion of four airport terminals and some hydroelectric projects across the country were healthy for the nation’s economy.

    The Correspondent also raised concerns about whether the conditions for the loans were favourable to the overall interest of Nigeria.

    Ahmed responded saying: “To borrow, we go through several processes of assessments as well as negotiations.

    “We make sure we get the best possible terms and whether we are borrowing from financial institutions or in Europe or China or anywhere else, we try to get the best rates of borrowing.

    “So far, the conditions we’ve got are very good ones,’’ she said.

    Ahmed restated the commitment of the President Muhammadu Buhari-led administration to ensure that the country grows in a manner that would bring many people out of poverty.

    According to her, it is for this reason that the government takes its social investment programmes like the school feeding, Conditional Cash Transfers to the poor and vulnerable and trader moni programme, very seriously. (NAN)

  • Why Govt can’t remove fuel subsidy now, by Finance minister

    The Federal Government has explained why it is not considering subsidy removal. It has not found the right formula to cushion its effect, Finance Minister Mrs. Zainab Ahmed said yesterday.

    According to her, the government would have to find a workable formula before ending subsidy payment.

    “But for now”, Ahmed said, “the government is yet to find the right formula which would provide succour to the people when subsidy is removed. Hence, there is no intention to remove fuel subsidy at this time.”

    The minister, who spoke yesterday at the end of the weekly Federal Executive Council (FEC) meeting, that the Executive and the National Assembly would have to work together on the issue.

    She also noted that the current subsidy regime, which is under the monopoly of Nigeria National Petroleum Corporation (NNPC), is cheaper  compared to the previous regime.

    Mrs. Ahmed said: “In some countries, they provide buses to transport people, in some countries they provide subsidies for people that are directly requiring the subsidies.

    Read also: NUPENG, PENGASSAN to FG: shun counsel on removal of fuel subsidy

    “We have not found a way to do it. What we are doing now, the subsidy, it is everybody that is benefiting, whereas it should be the people that are really vulnerable that need.

    “So, in the Executive with the support of the legislature, we have to find a formula that will work for Nigeria. And until we do that, we should not be contemplating removing the subsidy because, indeed when we do, there will be people that will suffer. So, we are not yet there.

    “We discussed this periodically under the Economic Management Team. But we still haven’t found a formula that works for Nigeria. And you know that Nigeria is unique. What works for Ghana might not work here.

    “So, it’s still work in progress and there is no intention to remove fuel subsidy at this time.”

  • No subsidy removal until right solution is found, says Finance minister

    The Federal Government has said that until it is able to find the right formula to cushion the effect of subsidy removal, it would not contemplate removing subsidy.

    Minister of Finance, Zainab Ahmed said the government would have to find a formula that works for Nigeria before removing fuel subsidy.

    Read Also: NAEE to FG: remove petrol subsidy

    But for now, Ahmed said the government was yet to find the right formula which would provide succor to the people when subsidy is removed.

    This she said has made the idea of subsidy removal a no go area.

    Ahmed who spoke Wednesday at the end of the weekly Federal Executive Council (FEC) meeting posited that it is left for the Executive and the National Assembly to come together and thinker on the right buffer that will be suitable for the country.

    She also noted that the current subsidy regime which is under the monopoly of Nigeria National Petroleum Corporation (NNPC) is far cheaper when compared to the previous regime.

  • Finance Minister okays IMF advice on subsidy removal

    Finance Minister, Mrs. Zainab Ahmed, on Thursday, described the International Monetary Fund’s (IMF’s) advice to the Federal Government on the need to remove fuel subsidy as a good advice.

    Speaking at the sidelines of the ongoing IMF/World Bank Spring Meetings in Washington D.C, she said: ” The advice from the IMF on fuel subsidy removal was good one but also we have to implement it in a manner that is both successful and sustainable.

    “We are not in a situation to wake up one day and just remove subsidy. We have to educate the people, we have to show Nigerians what the replacement for those subsidies will be. So,  we have a lot of work to do. We also need to understand that you don’t remove large amounts of subsidy in one go, it has to be graduated and the public has to be well-informed on what you are trying to do”.

    The minister said the minister met with the IMF and have reviewed the IMF Article IV Consultation with Nigeria report, which was positive. “The review was a positive one and had good advice from the IMF to Nigeria and they have indicated that they are available to provide technical support to improve our liquidity management, our debt management and other fiscal measures,” she said.

    Data from the Debt Management Office (DMO) showed that Nigeria’s total public debt rose to N24.39 trillion or $79.44 billion as at December 31, 2018 representing a year-on-year growth of 12.25 per cent. The 2018 debt stock is higher than that of 2017 by N2.662 billion.

    Mrs. Ahmed said President Muhammadu Buhari has directed that the minister looks at every area that requires reforms.

    Read also: IMF advises Nigeria to remove fuel subsidies

    Speaking on the Sovereign Wealth Fund (SWF) operations, she said:  “I would say that the Sovereign Wealth Authority has been doing well if you look at where we are starting from, we have achieved quite a lot of progress by building more of the fund from where we met it and by utilising the savings at the Sovereign Wealth Authority for projects that are physically visible. We still have some movements to go but the movement is a positive one”.

    The minister said the Federal government has asked the World Bank to review some of the initiatives that it has put in place, including those that involve them looking at implementation systems on areas they are providing funding for infrastructure.

    “What we found in Nigeria is that the Environmental and Social Standards (ESS) put in place by the World Bank is causing significant delays in the rollout of infrastructure. We understand that it is well intended but we have informed them that they need to review how they implement it so that we are not overtly slowed down because of the new proceedings,” she said.

  • FG spent N79.2bn on monthly pension in 2018, says PTAD

    The Federal Government in 2018 spent a total of N79.2 billion on the payment of monthly pensions to pensioners.

    The Executive Secretary of the Pension Transitional Arrangement Directorate (PTAD), Sharon Ikeazor, made this known at the stakeholders forum for pensioners from North Central Zone in Abuja on Thursday.

    According to her, “N6.8bn monthly pension was paid to Customs, Immigration and Prison Pension Department (CIPPD), N45 billion was paid to pensioners in Parastatals Pension Department (PaPD), about N21.2 billion was paid to pensioners under Civil Service Pension Department (CSPD) and N6.1 billion was also paid to pensioners with Police Pension Department (PPD).

    “Under the CSPD, 30,770 pensioners who had not been on the payroll had their benefits computed and put back on the payroll with their arrears paid.

    “As at March 2019, an additional 1,655 have also been computed and put back on the payroll.

    “Under PaPD, an additional 14,678 pensioners from various agencies under the PaPD were verified, benefits computed and paid. They include Delta Steel, NITEL/MTEL, FHA, Savannah Sugar, and NDA – Civilian.”

    “On the issue of 33% arrears, which is the most relevant point that I am sure all pensioners are eager to hear about.

    “As at Monday this week, the FG through PTAD has paid the sum of N2.6bn to 103,000 Civil Service Pensioners who are on PTAD payroll.

    “This is an inherited liability from the last salary increase of 2010. I will like to reassure the majority of parastatals pensioners who have not received their 33% arrears that we have just paid that of Nigeria Railways.

    “The rest of the parastatals pensioners 33% arrears will be paid after the parastatals verification exercise which will commence at the end of April.

    “This is to enable PTAD ascertain its true liability.

    “You are aware that under the Parastatals Pensions Department, PTAD owes between 12 – 24 months of the 33% arrears. But for Police Pensions and Civil Service Pensions, we have a zero balance; meaning that government has cleared all of the 33% arrears.” she said.

    Concerning payment to Next of Kins (NOKs), the PTAD boss explained that it has paid 337 NOKs over N277m; 649 NOKs of PaPD (NITEL) have been paid over N613.4m; 1,019 of the NOKs in Health/Education sector under the PaPD have been paid a total of N1.9m; lastly, 19 NOKs of Delta Steel have been paid N25.9bn.

    She explained that the only acceptable documentation for the processing of payment to Next of Kin is the letter of administration from state or federal high court.

    The Minister of Finance, Zainab Ahmed, who was represented by the Director of Legal at the Federal Ministry of Finance, Mr. Gabriel Christopher, while commending the PTAD for its exceptional, transparent, and technologically driven innovation and workforce, assured pensioners that the payment of the rest of the parastatals pensioners will take effect in due course.

    Read Also: PTAD pays 103,710 civil service pensioners

    The Acting Director-General of the National Pension Commission (PenCom), Hajia Aisha Dahir-Umar, represented by the Head of Complaint in the Commission, Mr. Michael Ejiofor, commended the progress and successes achieved by the directorate of PTAD, regardless of the many challenges it faces such as low funds.

    According to the Nigeria Union of Pensioners (NUP), Dr. Abel Afolayan, “Pensioners have never had it this good in the history of this country.”

    While commending PTAD and the administration under President Muhammadu Buhari for clearing backlogs of payments of 33% pension arrears, he, however, advised the government to pay speedy attention to the payment of the rest of the parastatals pensioners, and to address issues concerning payments to Next of Kins.