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Review Direction Of Debts, Experts Tell FG

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Economic experts have called on the Federal Government to review the direction of the country’s debts, in order to spur productivity and economic growth.
The experts expressed their views at a forum on “Nigeria’s Debt Sustainability: Issues and Way forward’’ organised by the Lagos Chamber of Commerce and Industry (LCCI).
Managing Director, Financial Derivatives Company, Mr Bismark Rewane said the country’s debt profile would not be a concern if its Gross Domestic Product (GDP) was growing at about 8 to 10 per cent.
He said existing data showed that the country’s debt was growing at a faster rate than GDP, growing at a time that productivity level had declined resulting to less prosperity for the citizens.
The economist said borrowing to spend and borrowing to invest were two different things, and that funding fiscal debt amounted to the government borrowing to spend.
According to him, Nigeria floated its first Eurobond of 1 billion dollars in 1978, and used it to complete 25 sector specific projects, amongst which was Apapa ports, Inner Marina road and aircraft purchase.
“Tell me what roads would be completed or refinery that would be functional by the time the various bonds floated by government matures; lending should be sector specific and impactful,” he said.
He stressed that government should reset its debt profile, adding that the country was moving from debt problem to debt crisis and if left unchecked, it would result in a debt trap.
He added that elongated debt could translate to intergenerational debt.
“The solution is to increase the injection at the investment level, when you do that, it grows employment and to grow investment means that you increase the level of confidence of domestic and foreign investors.
“Also government’s policies should be well aligned, create equitable distribution of wealth and equal opportunities for citizens, strengthen tax institutions to increase revenue collections and reduce leakages,” he said.
In the same vein, , Chief Economist, Pricewaterhouse Coopers (PwC), Mr Andrew Nevin said the country had declined in per capita GDP since 2015 to 2017.
He said this was likely to decline in 2019 adding that the IMF also predicted a decline in 2020 to 2022.
“This indicates that we are getting poorer each year,” Nevin said.
He said government should eliminate fuel subsidy and dual foreign exchange rate, improve on the country’s ease of doing business, and also tap into the potential of the real estate sector.
Mr Ayo Salami, Partner, KPMG Nigeria, said there had been consistent shortfall in government’s projected revenue in the last few years, and that the country’s debt would surpass its revenue in the next five years, if the trend was left unchecked.
He urged the Federal Government to review some of its abandoned and ongoing projects.
He said the Ajaokuta Steel plant and the refineries were not generating revenue, but that the government kept pumping funds into them annually.
Salami, therefore, called for a review in cost of governance, block leakages in Customs revenues and check inefficiencies at the ports, which were contributing to cost of production and affecting economic growth.
Earlier, , President of LCCI Mr Babatunde Ruwase said the chamber was concerned about the rapidly growing public debt and its implications for the country‘s fiscal sustainability.
“The Debt Management Office (DMO) put the nation’s total debt stock (Federal, FCT and States) at N22.38 trillion (73.21 billion dollars) as at June 30.
“Debt service to revenue ratio which currently stands at over 40 per cent is on the high side, with implications on the country’s capacity to deliver infrastructure investments. Our revenue can barely cover our recurrent expenditure.
“Many state governments are still grappling with huge debt service burden which is impeding deliverables on vital developmental projects. Many other states depend largely on Federal Government grants and allocations to survive,” he said.
Ruwase said it was imperative for government to set a debt management framework that aligns with its economic growth drive, revenue profile and “ability to pay” realities.
Meanwhile, the Director-General, Debt Management Office (DMO), Ms. Patience Oniha, said its current strategy was to reduce the interest expense on government’s debt.
She said DMO hoped to achieve a debt mix of 60 per cent and 40 per cent for domestic and external debt respectively.
Oniha represented by, Director, Policy Strategy and Risk Management, Mr Joe Ugoala said DMO also planned to increase the long-term portion of the domestic debt to 75 per cent.
She said debt to GDP in Nigeria at 20 per cent was one of the lowest figures in the world.
The director general added that it was lower than the limit of 40 per cent and showed that the economy had huge fiscal sustainability space if revenue could grow faster than its current level.

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FG Recorded N150.36bn Fiscal Deficit In April   – CBN

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The Federal Government recorded a fiscal deficit of N150.36bn in April, after recording an aggregate expenditure of N559.67bn and retained revenue of N409.31bn.
Figures obtained from the Central Bank of Nigeria’s April report on ‘Fiscal operations of the Federal Government’ revealed at the weekend. 
The report shows that the federal revenue rose by 28.2 per cent in April 2021 to N1.12tn in relation to N862.79bn in March 2021, due to improvement in non-oil earnings. 
It also shows that the provisional aggregate expenditure of the FGN put at N559.67bn was 50.6 per cent below the budget benchmark and 59.4 per cent short of the level in March 2021.
Also, the fiscal operations of the Federal Government in April 2021, according to the report, contracted by 67.8 per cent, relative to the budget estimate.
Part of the report read “Federation revenue rose by 28.2 per cent in April 2021 to N1.12tn, relative to N862.79bn in March 2021, owing to improved non-oil earnings.
“However, the retained revenue of the Federal Government of Nigeria at N409.31bn, was 38.5 per cent below target.
“Similarly, the provisional aggregate expenditure of the FGN, at N559.67bn, was 50.6 per cent below the budget benchmark and 59.4 per cent short of the level in March 2021.
“Consequently, the fiscal operations of the FGN in April 2021 contracted by 67.8 per cent, relative to the budget estimate.”
It added that the FGN debt outstanding, as of the end-March 2021, stood at N28,984.3bn and represented a 15.8 per cent increase, relative to its level in March 2021.

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TSA Promotes Transparency, Accountability In Revenue Collection In Kebbi – Chairman

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Alhaji Iliyasu Arzuka-Jega, Chairman, Kebbi State Board of Internal Revenue, has said that the introduction of Treasury Single Account (TSA) has encouraged accuracy, efficiency and accountability in revenue collection in the state.
Arzuka-Jega stated this at a news conference yesterday in Birnin Kebbi, the Kebbi State capital.
The Tide source reports that TSA is a public accounting system whereby government receipt, revenue and income are collected into one single account.
The Central Bank of Nigeria (CBN) is responsible for the maintenance and management on such account.
It was proposed by the Federal Government in 2012 and fully implemented by the Buhari led-administration.
Arzuka-Jega said that the introduction of digital revenue collection techniques assisted the board towards simplifying its work more convenient and easy.
He said that, “We are now in the era of technology, all our collections have been upgraded from manual to digital.
“In this circumstances, we found it necessary not to be left behind towards ensuring that leakages are blocked and revenues collected enter into government’s coffers.
“All our collections have now been centralised because we operate Single Treasury Account (TSA), where all revenue realised go in there, this has put an end to divertion of fund.”
The Chairman said that the board had recorded significant impact of TSA since inception, as against previous years when revenue collections whether external or internal were done manually.
He said that the manual method of revenue collction was fraught with irregularities which resulted to situation where fund could not be accounted for.
“Now, we do receive payments from Lagos and other states, and we only see evidence of payments made to our platform under the TSA,” he said.

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NNPC Explains 2020 Audited Report

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The Nigerian National Petroleum Corporation (NNPC) has explained the controversial areas of its 2020 audited financial report that placed the corporation on a profit lane.
It would be recalled that on August 26, President Muhammadu Buhari announced a profit after tax of N287billion by the corporation in 2020, the first of its kind in the oil giant’s 44-year history.
This feat, which was commended by Buhari, had also won the Group Managing Director of the corporation,MalamMeleKyari-led management accolades from stakeholders and Nigerians from all walks of life.
Kyari, however, explained how the corporation’s performance turned out positive at a time the negative impact of the Covid-19 pandemic affected businesses worldwide.
Also, the Group Executive Director, Finance & Accounts, Mr Umar Ajiya, also shed more light on the development, and equally addressed some of the issues raised by those who doubt the veracity of the profit declared by the corporation.
He said the trend of real openness has begun not only in the NNPC but also in the Nigerian petroleum industry, especially with the signing of the Petroleum Industry Act (PIA).
Ajiya said that during the period under review, the NNPC took some unprecedented steps among which was cost optimisation aimed at refocusing its businesses.
Also, in the week, the Nigerian Gas Marketing Company Limited (NGMC), a subsidiary of NNPC, restated its commitment to the development of its host communities.
The Managing Director of the company, Mr Justin Ezeala, made the commitment at the opening ceremony of the Women Skills Acquisition Programme for its host communities in its northern operations.
He said NGMC was committed to developing a robust sustainable relationship with all its host communities, and disclosed that the beneficiaries were carefully nominated by executives of their respective communities and would undergo intensive three-week training in catering, tailoring/fashion design, hairdressing and make-up (including pedicure, manicure andgele tying).
He tasked the host communities on the sustenance of the existing peaceful relationship while assuring them of the company’s continued support.
Addressing the beneficiaries, the Lead Consultant, Bernard Emekpe, said the programme was a testament to NNPC’s vision of engaging the communities in which it operates.
He advised the beneficiaries to see this as a lifetime opportunity and take control of their destiny.
A representative of the host communities, Otokina Goodluck, and some of the beneficiaries said the program was a life-changing opportunity, and promised to make judicious use of it.
The beneficiaries were drawn from Ajaokuta, Geregu, and Aku communities in Kogi State.
Meanwhile, the Republic of Norway has commended the Federal Government on the successful signing of the Petroleum Industry Act (PIA).
The Norwegian Ambassador to Nigeria, Knut EilivLein, gave the commendation during a business visit to the Minister of State for Petroleum Resources, Chief Timipre Sylva in Abuja.
He said they were delighted at the signing of the bill which he said would accelerate development and strengthen the oil and gas industry.
On his part, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the difference between past efforts and the eventual PIB that was passed by the National Assembly was that all industry stakeholders, including government agencies were carried along.
Still, on the week under review, the GMD was conferred the BusinessDay Energy Executive of the Year Award by BusinessDay Newspaper Management in recognition of his giant strides in repositioning the oil and gas industry in Nigeria.
Receiving the award in Abuja, Kyari said the trust by Buhari was the propelling force behind the many achievements recorded in the nation’s oil and gas sector within the last two years.
He described his position and the confidence that he enjoys from the President as a privilege, stressing that he and members of his management team were working hard to justify the trust in the interest of the nation and to the benefit of Nigerians.
He attributed the transformation and recent profit by the corporation to quality leadership and prudent management of resources, noting that it was part of his efforts towards keeping the trust.
The GMD stated that the corporation’s courage to publish its 2018 Audited Financial Statement with a huge loss was in line with his management resolve to be transparent and accountable to the public, emphasizing that the success story of ¦ 287billion profit in the 2020 financials was a result of the determination to do things differently.
The NNPC helmsman, while appreciating the management of BusinessDay Media Limited for the award, declared, “As the biggest company with the largest assets in Africa, NNPC has no reason not to make a profit.”
Earlier in his remarks, the Managing Director of BusinessDay Media Limited, Dr Ogho Okiti, said globally acceptable parameters were adopted in selecting the awardees.
“In addition, our Business Research and Intelligence Unit (BRIU) in conjunction with our Oil and Gas Editorial Team have carefully analysed the data available on each company as well as their work programme recorded with the DPR for the period between 2019 and 2020 to arrive the selection”, he said.
Also speaking, the Father of the Day, King Alfred Papa Preye Diete-Spiff, acknowledged the contributions of the oil and gas industry to national development, and called for diversification of the economy.
For piloting the corporation into the post-Petroleum Industry Act era, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) pledged its unalloyed support for the management of the NNPC.
The Group Chairman, PENGASSAN, Comrade Victor Odor, disclosed this during a courtesy visit to the Group General Manager, Group Public Affairs Division (GPAD), GarbaDeen Muhammad, in his office in Abuja.
Odor, who said the visit was to felicitate with the corporation’s spokesman on his appointment, declared that the union would stop at nothing to defend the corporation’s current position as a profit-making company against those who believe that NNPC could never do well, adding that the NNPC GMD and his management team have done well in repositioning the corporation and deserved support.
He said the union would focus more on functional conflict management than disruptive conflict management in its constructive engagement with the management to ensure sustainable growth and profitability for the corporation.
Responding, the Group General Manager, Group Public Affairs Division, GarbaDeen Muhammad, who appreciated the union leaders for the kind gesture, said the GMD was very passionate about repositioning the corporation and the entire oil and gas industry.
He assured the union leaders that management was appreciative of their support and was always ready to work with them to take the corporation to greater heights.
The Group Chairman of PENGASSAN was accompanied on the visit by the Group Vice Chairman, Comrade EghosaAghimien, and Group Secretary of PENGASSAN, Comrade OlugbengaShokunbi.

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