Nigeria: Delay in Budget Passage Will Have Implications - Adeosun

Photo: This Day

The long time it is taking the National Assembly to finish work on and pass this year's national budget will have economic implications for the Nigerian economy.

The minister of finance, Mrs Kemi Adeosun, who made this assertion at a news conference yesterday in Abuja, said the delay in passing the 2018 budget would cause some adjustments in implementation which would have some impact on the nation.

Adeosun, who said the impact was due to changes in the market and in the cost (value) of money, however, assured that the federal government would try to mitigate the effects of the delay.

Adeosun said: "Honestly, we may need to realign some of the priorities now because what we thought we would be doing in January is now different from what we are going to do.

"So, we are going to have to look very closely to see where we would realign and re-prioritise, but we will carry on because most of the capital projects are multi-year projects, so we will just continue.

"We are going to try and mitigate that impact as much as possible and focus on completing projects," she said, adding that the fact that the 2017 budget cycle began late in the year had helped a great deal.

"What has helped us is the fact that the budget was passed late last year, and what we did was (that) we just carried on with those projects. We will close this year's budget with capital expenses in excess of N1.5 trillion, which is higher than last year.

"Many of these projects are multi-year projects, so, hopefully, there will not be too much disruptions."

Adeosun noted that the financial systems were not closed on December 31, 2017 in order to allow for projects implementation to continue.

She, however, expressed optimism that the 2018 budget would be passed soon.

LEADERSHIP Weekend reports that the National Assembly is yet to pass the budget which was forwarded to it since November last year due to several reasons, including chief executives of some ministries, departments and agencies (MDAs) refusing to come forward to defend the budget estimates contained in their proposals before the lawmakers.

However, both chambers of the National Assembly have indicted their readiness to pass the appropriation bill into law in a short while.

On tax, Adeosun said the Federal Inland Revenue Service (FIRS) and other tax authorities were doing a lot on payment enforcement.

She remarked that the Voluntary Assets and Income Declaration Scheme (VAIDS) had helped in increasing the number of taxpayers captured in the tax base of the nation.

The minister revealed that the federal government had recovered N13.8 billion from taxes through whistleblowers who gave useful tips about companies that deliberately underpaid taxes.

"That is different for us because most of the whistle blowing in the past have been about stolen money, but with the extension of VAIDS and our general narrative about tax, we are getting far more tips on tax evasion," she said.

She added that the 14 whistleblowers would be paid N439, 276 million in May.

According to her, cases are being prepared for the prosecution of companies and individuals who refused to use the VAIDS window to remit their taxes once it closes on June 30.

Adeosun said that the federal government also sent out teams to visit some of its foreign missions to verify assets, in which more than 108 landed properties were identified in various countries.

She said the properties do not necessarily belong to some of its foreign missions but that some of its agencies had some unrecorded properties abroad.

"Some have been abandoned and some are even in the process of being sold off but we have been able to stop them and we are going to revise procedures in that regard," she said.

Speaking on the recent stalemate in revenue generation between the Federation Accounts Allocation Committee (FAAC) and the Nigerian National Petroleum Corporation (NNPC), the minister said it showed the level of scrutiny by all parties concerned to ensure that the nation got the right revenue figures.

Adeosun stressed that the federal government would not allow revenue leakages anymore, adding that it was working to ensure that those leakages were blocked.

"We should not be too alarmed when there is a stalemate because it is all in the public interest to make sure that the monies that we are expecting into the federation account come in and we account for them properly," she said.

On the issue of Nigeria's debt profile, Adeosun said there was no cause for alarm as the nation's debt to Gross Domestic Product (GDP) ratio was 20 per cent and one of the lowest in sub-Saharan Africa.

"Where we do have a challenge is debt service to revenue which is because the interest cost was quite high and this is a function of two things; one is that most of the debt was short term so you are paying interest and compounding it.

"However, we have been refinancing treasury bills in the domestic market and replacing them with long term debt in the international market and that is reducing our cost of borrowing.

"This time last year, Nigerian government was borrowing at an average cost of about 18 per cent but now it is 13 per cent. So we are working very hard on the debt service cost and, of course, revenue," she said.

The minister asserted that, presently, borrowings are tied to capital projects which would still be useful for many years to come.

"So, there is no cause for alarm as far as Nigeria is concerned. It is a well managed, very conservative debt strategy and we continue to be very focused on concessional borrowing," she said.

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