*We will diversify, Scale-up MSMEs & Reduce pressure on foreign exchange<\/p>\n
Question:<\/p>\n
Your Excellency, the 2015 and 2016 budgets, where are we at that level?
\nMay be you need to shed more light on the Zero-Budgeting that government
\nproposed.<\/p>\n
Answer by the Vice President:
\nOf course you know the 2015 budget cycle is obviously coming to an end and
\nthat was the budget set in by the old administration which had up to 90%
\nas the recurrent expenditure and the rest of it capital expenditure.\u00a0 Of
\ncourse we know that that is not a model that is sustainable for long term.
\nWe also understand some of the reasons why that has been so; some of them
\nhistorical, some of it are legacy issues but we must rectify that and
\ngoing into 2016 budget, we intend to put things slightly differently.<\/p>\n
In the first place, this Zero-Budget system is the one we intend to adopt;
\nit is the one we are working on.\u00a0 We\u2019ve started working on it very
\nseriously in the past few weeks.\u00a0 What that means is that we are doing
\naway with the Envelope system and we are coming to a system which more or
\nless, you know, involves you having to justify from practically nothing.
\nYou know, we are not just giving some funds to do with in accordance with
\nwhat you have. In the Envelope system, as it were, you are given an
\nenvelope and then you spend from that amount of money.<\/p>\n
What we\u2019re trying to do now, is to ensure that every ministry, every
\ndepartment will plan based on policy, as a matter of fact, and the first
\npoint I think is important to bear in mind as far as Zero-Budgeting is
\nthat we are going to very strictly adhere to a policy, and this is going
\nto be very policy-driven. That is why our National Planning Commission
\n(NPC) working with Ministry of Finance and Budget Office have tried to
\ndevelop, you know, a robust policy base, of course on the government own
\nobjective and aspiration, the party manifesto, based on other documents,
\ntrying to define what this government is about.<\/p>\n
So we are more or less at the point where we have a clear policy document
\nand of course at the same time we are doing the long term and the medium
\nterm review, the MTEF-Medium Term Expenditure Framework. We are also
\nputting that in place in order to be able to ensure that the budget itself
\nis purely policy driven because that is very important. If it is what it
\nis, (that is without clear policy direction) basically we are just running
\ngovernment, you know, and implementing expenditure, capital expenditure,
\nsome capital projects and all of that.\u00a0 But there is a policy here.<\/p>\n
One of the critical issues for us is that in the past we seem to have
\nbudgeted on the basis that this is a country that is concerned only with,
\nwell, growth figures as they say, averages, may be about 6% in the past
\nfew years until last year into this year.\u00a0 But growth figures by
\nthemselves don\u2019t mean much. In a country where you have such a large
\npopulation of extremely poor people, your budgeting has to reflect that,
\nyou know, because otherwise, you are going to have more of the same\u2026one of
\nthe critical things for us is that the budget must reflect the fact that
\nwe want to deal with the fundamental question of poverty at the same time,
\nwe have huge infrastructure deficit which we must also deal with.<\/p>\n
So those are two issues that go into our planning. We are looking into
\nplanning generally, into policy formulation.\u00a0 We may be seeing for the
\nfirst time a three to four year planning period and we are looking at
\nsocial investment. I just take social investment for example\u2026of course, we
\nhave one meal-a-day programme, we are looking at substantial investment in
\nMicro, Small and Medium Enterprises (MSMEs), and we are looking at
\nsubstantial investment in Conditional Cash Transfer (CCT) and all of that.<\/p>\n
Now, how do we do that?\u00a0 You know, given the cash constraint and all that.
\nSo we are looking at how to do this over a three year, four year period;
\nspreading the expenditure over that period. Whatever the programme we are
\ndoing, we have to spread it over that period, especially because we know
\nthat we simply don\u2019t have the fund to attack this the way we wish to.\u00a0 If
\nwe have the fund today we certainly would have wanted to implement every
\none of those policies in full from day one but the revenue situation seem
\nnot to justify that.\u00a0 So that is part of why planning is crucial.<\/p>\n
Zero-Budgeting is more or less for us a product of a style, you know one
\nof the reasons why we think that budgets are not taken that seriously is
\nbecause there is no policy champion.\u00a0 There is no one to say look, this is
\nwhat we plan to do, you know a budget is just essentially an estimate of
\nwhat we intend to spend.\u00a0 But we think a budget should also have some
\nideological content, it should be driven by thinking and some people
\nshould champion that way of thinking and in which case you don\u2019t have more
\nemphasis on getting things done.<\/p>\n
Question 2:
\nThe business community is seemed not to understand. They want a kind of
\nclarification on the general economic policy direction of this government?
\nAnswer by the Vice President:
\nLet me explain, you see, and frankly I\u2019m lost some time, when we are asked
\nabout general economic direction, I think it\u2019s clear we\u2019ve made that point
\nrepeatedly, you know sometime we mix up sectoral concern with general
\neconomic policy.\u00a0 Our economic policy direction is very clear, we know
\nwhat it is that we intend to emphasize.\u00a0 Every one of us knows that oil
\nand gas sector is our main revenue earner. But oil and gas revenue have
\ndipped. We know that we must diversify our economy. We are committed to
\nthat diversification.\u00a0 How are we going to diversify?\u00a0 Agriculture is
\ncritical to that diversification effort and when we say agriculture, how
\ndo we intend to proceed?\u00a0 We are going to look at certain critical areas,
\nfor example rice.<\/p>\n
We think that some work has been done on rice production but we now
\nstrongly believe that if we are able in the next two years or so or three
\nyears, we can actually become self-reliant or self-sufficient in rice
\nproduction.\u00a0 So we are working with seven states that are, if you like,
\nrice producing states.\u00a0 And we believe that we must focus our attention on
\nthose states in helping them, by providing infrastructure, providing
\nwhatever components that are required down that value chain\u2013 silos,
\nmilling facilities. Already many of those states have silos but we can
\nfurther encourage them. Kebbi State for example is one of the major rice
\nproducing states.\u00a0 We were already advancing a concessional fund to Kebbi
\nstate to enable them work especially with the farmers directly to enable
\nthem increase their rice production.\u00a0 In fact they have flooding recently
\nwhich is a setback, but we are focused on those rice producing areas, we
\nintend to work closely with them.\u00a0 Even some of our infrastructure plan is
\ndirected at those areas because we believe that they must have all the
\nrequired support.<\/p>\n
So agriculture is very important in our efforts at diversification of the
\neconomy.\u00a0 We also believe that putting funding to MSMEs is very important.
\nIf you look at a lot of the effort all through the past ten years you find
\nthat there has always been focus on MSME but the problem has always been
\nthat of scale, not the problem of execution but scale. It\u2019s okay to
\ninitiate a YOUWIN programme with a couple of thousand people. But how can
\nthat affect the lives or the economy of a country of 170 million people?
\nSo you have a good idea but how do you scale it up?
\nSo we identified Small and Medium Scale including the market women. So one
\nof the critical issues that we are reviewing now is how to ensure that
\nwe\u2019re able to invest in the market women, give them funding through their
\nCooperative Associations across the country, give them funding which will
\nenable them to improve their capacities, and then also training, capacity
\nbuilding, financial planning. Capacity building planning just helps them
\nbecause, you see, this is a country of traders and merchants.<\/p>\n
You must recognize that even in our definition of what is MSME you must
\nnot forget that that is a very critical sub-sector and you can do scale-up
\nin that sector. You already have established structures for doing so.
\nThen of course we are trying to create the windows for opportunities for
\nSmall and Medium Scale people \u2013 the artisans and the rest of them.\u00a0 So
\nthat\u2019s going to be a critical aspect \u2013 the Small and Medium Scale area for
\npurposes of diversification of the economy.<\/p>\n
Of course we are going to be looking at services and technology. Then we
\nlook at music and entertainment, and all of those areas because this is
\nour natural strength and what we think that government ought to do aside
\nfrom our major role of improving infrastructure, security and all of that
\nwhich I may not have the opportunity to talk about now. Government is
\ngoing to facilitate doing business in the area of agriculture, so that
\nthere is diversification. Everybody for instance who wants to know what
\nNigeria will be preoccupied with in another two to three years must know
\nthat agriculture is one of the keys. I just gave you an example of rice
\nproduction and then looking at wheat. One of the reasons why we are
\ntargeting some of these things is because it will also reduce the pressure
\non our Foreign Exchange. We are spending a lot of money on foreign
\nexchange.<\/p>\n
In the oil and gas sector, you know, part of our policy in that sector is
\nto reduce importation of refined petroleum and that is why we are trying
\nto work on the refineries and all of that. There are those who will say
\nlook, we are now at $45 per barrel which means that what we are actually
\nspending on subsidy is substantially lower.\u00a0 There is a time for even
\nremoving subsidy or not removing subsidy.\u00a0 But there is also a time,
\nbecause we are not spending so much on subsidy and we may not and we don\u2019t
\nexpect, but we don\u2019t know what the Lord God Almighty will do. We may be
\nback to $100 per barrel but the short to medium term projection is that we
\nmay probably remain close to where it is- may be $50 or probably $55, and
\nall of that, which still means that we have some room in terms of what we
\ncan do now.<\/p>\n
So we think that we also have opportunity to improve refining capacity.
\nWe are going to encourage the major refinery that Dangote is putting up in
\nLagos- 650,000 barrels, which we hope, will come on stream by 2017. If
\nthat comes on stream, it\u2019s private sector, it is not government funding.
\nIt will resolve a lot of our consumption issues and of course lower almost
\nto a minimum or almost completely our refined petroleum needs which of
\ncourse put question on the economy, on the Foreign Exchange Reserve.\u00a0 So I
\nthink that in terms of what our economic policy is, it is quite clear.\u00a0 We
\nmade this point when I gave a speech at the ICAN conference, and went to
\ngreat detail.<\/p>\n
I talked of course of social investment, which is another aspect of our
\neconomic policy and we made the point that if you have a number of poor
\npeople that we have, you cannot ignore that number otherwise you are
\nalways going to have growth without jobs, growth without any real
\nimprovement in the standard of living of the people which is what we have
\nexperienced for years.\u00a0 So you have the very, very poor who are dying
\ndaily because they simply don\u2019t have any resource at all.\u00a0 So we need to
\ndo something about that. That is why we have social investment.<\/p>\n
The one meal-a-day, we expect will also energize the economy down the
\nentire chain. Taking an example of a state that had done very well with
\nthe one meal-a-day programme- Osun state, and is No. 2 in terms of GDP in
\nthe country today, strangely, next to Lagos. In terms of the number of the
\npoor, I think Osun is No. 3 in terms of states that have lowest poverty.
\nYou can hear about Osun state in the press that they have not paid salary,
\nof course there are 23 states that haven\u2019t paid salary. That is another
\nissue. The indication is that because there is a lot of investment in the
\npeople, poverty has been reduced and that is what we need to achieve in
\nNigeria. We want to achieve a situation where as much as is possible, we
\nhave to deal with poverty otherwise most people are completely alienated,
\nyou know. And they are not even part of the system at all. And we need to
\ndeal with that.<\/p>\n
So that is why our social investment policy is robust and there are those
\nwho have shouted, oh! How are you going to sustain it, you know. But I
\nhardly hear this argument when you are talking about poor people. Nobody
\nasked how we bailed out few Nigerians who owed almost Seven Hundred
\nBillion Naira during banking sector crisis. Nobody said how you are going
\nto sustain it.\u00a0 In fact, the entire bail-out of the banking sector was
\nN5.7 trillion. Even if you give out conditionally, if you give out cash
\ntransfer to 25 million people over a 4-year period, one year will cost you
\nabout N1.3 trillion. I have challenged some of our economists that look,
\nif you like, you can think as if you are in the West. Sometimes it is
\nalmost as if you are running an economy somewhere in the West where all we
\nare concerned about are interest rates and the macro economic issues and
\nof course, the general hard core fiscal and monetary issues.\u00a0 But we have
\nto ask ourselves if you have growth at 7%, and you have graduate
\nunemployment at 80% and you have 110 million poor. What growth is that,
\nyou know. I think that we need to really readdress the critical question
\nthat concern us and that is the thrust of our economic policy. At the end
\nof the day, whatever it takes to get to the root of the problem, we have
\ngot to do it.<\/p>\n
Question 3
\nMay be you can give us slight explanation considering the time we have on
\nsectoral issues, for example what is the government plan on Public Private
\nPartnership (PPP), government plan on Local Content like the major area
\nwhich is the Oil and Gas sector.\u00a0 You know, they say investors are
\nworried.\u00a0 They say they don\u2019t understand government economic policy, for
\ninstance you are the Chairman of National Council on Privatization (NCP).
\nInvestors made investment in power sector and some other areas so they are
\nworried. They don\u2019t know what the government is thinking, whether it will
\nreverse some of the agencies like NITEL and the things that were done in
\nthe immediate past administration.<\/p>\n
Answer by the Vice President:
\nNo. Let me say very quickly, first let\u2019s take PPP. Of course, government
\nis committed to PPP definitely. As a matter of fact we have no choice.
\nEven in our budget projection, we expect that PPP will constitute
\nsubstantially, the development of our infrastructure.\u00a0 Let me at this
\npoint explain something about plans for infrastructure because that will
\naddress the PPP question. If you look at what has happened in the past,
\nwhat happened is that for instance, you have the Lagos-Ibadan Expressway.
\nYou set aside 200 billion in the budget to do Lagos-Ibadan Expressway and
\nthis is just an example.<\/p>\n
Now, what happen is that you don\u2019t have that 200 billion when you are
\nstarting, so you put in 20 billion this year, next year you put in 10
\nbillion. And that is what has happened with a lot of major projects
\nbecause throughout the budget cycle you just keep putting a little money,
\na little money. So, we intend to set up an Infrastructure Fund.\u00a0 Now that
\nInfrastructure Fund is going to be a combination of our own seed money as
\nwell as concessional funding and private sector funds, which would be
\ncommitted to certain projects which we think are strategic.<\/p>\n
Now when you have that Infrastructure Fund you then have those different
\nprojects.\u00a0 Of course you do an open bidding process. What is interesting
\nabout Infrastructure Fund? One of the advantages is that it is a
\ndisciplined process, you cannot have opaque process. Because Sovereign
\nWealth Fund (SWF), peoples fund from everywhere is involved, you know. So
\nyou must have a disciplined process \u2013 contracting, bidding and all of
\nthat. Because the money will be there, we expect that you should be able
\nto take a project from start to finish. So PPP is extremely important
\nbecause some of the projects, depending on what project, some of them are
\ngoing to be PPP project. For example if you are doing a major road,
\ndepending on where it is \u2013 let us say Lagos to Sokoto or Lagos to Abuja,
\nthere will be tolling at some point, so that there is income stream for
\nmaintenance, income stream for private sector participants and all of
\nthat; depending on what the project is.\u00a0 In fact, some power projects will
\nbe involved in this, just depending on the project. PPP is a very
\nimportant component of our overall approach to this.<\/p>\n
Look at what we are going to do on the Local Content, you see, a lot of
\nexcellent policies you know, are abused at implementation.\u00a0 A person who
\ncarries a brief-case around the place in the Oil and Gas and of course he
\ncalls himself a Local Content participant, he has nothing and he\u2019s not
\nconcerned in the infrastructure. A lot of individuals who have nothing
\nthat you can say is there to add to infrastructure or any kind of
\ninvestment but he get good contracts and all of that, and they are middle
\nmen.<\/p>\n
Our Local Content system and many other things have been abused by rent
\nseeking individuals who are encouraged and who make the noise; there is no
\nLocal Content, and they are not encouraging Local Content.\u00a0 For them Local
\nContent is no more than a rent seeking arrangement. Why? because I know
\nwho is in government. They give me an allocation and I lift crude oil.
\nWhat is important in local content is that it must be local content. It
\nmust mean jobs. If you give me a lifting contract or something, as part of
\nmy so called local content, I don\u2019t provide job. Apart from my personal
\nassistant or may be my drivers. Local Content is absolutely important
\npolicy but the most important thing is that it must achieve the result
\nthat is meant to achieve.<\/p>\n
On privatization, obviously there is no intention whatsoever to roll back
\nprivatization, no intention at all. The government generally must honour
\nits obligation, government is a continuum. But what has happened in some
\ncases is, for example, if there was no bidding process, if it was just an
\nallocation; some of the noisiest people about policies that does not
\nfavour them are people who have benefitted from the system where things
\nwere not done properly. There is no reason at all why anybody will
\ninterfere; there is no way you can even interfere with things that were
\ndone properly. But if they were just allocated without a bidding process,
\nif someone allocates you a major government facility without any kind of
\nprocess, it is the duty of government to ensure it goes through the right
\nprocess.\u00a0 There have been some occurrences, I don\u2019t want to be specific
\nbecause some of them are in court, when individuals were allocated
\nresources that are very, very beneficial there was no process done, you
\nsimply approach and ask how much can you pay and that was that.<\/p>\n
Look at the bidding process that took place for Telecoms, you know. In
\n2001 people came and bought licenses, even the bidding process that took
\nplace in NIPP plants, although that was stalled and we have to open that.
\nPeople will come forward and make competitive bids.\u00a0 That is the way that
\ngovernment grows its resources. You can\u2019t give people gift of resources
\nthat belong to everyone. So privatization itself must have integrity. It
\nmust be open, transparent and must be proper. And one of the critical
\nthings as Chairman of NCP, I very, very strongly believe in privatization
\nin the first place and I believe that it\u2019s a way to go. I also believe
\nthat the process must be strictly transparent and must be clear to all
\nthat there is no backdoor. Nobody is being given any free bids and all
\nthat. So there is certainly no intention to roll back any of the
\nprivatization process that has already taken place, no such intention.<\/p>\n
Question 4
\nYour Excellency because of the time factor, I am going to take you back on
\nZero-Budgeting. This policy, the word Zero-Budgeting is alien to Nigerians
\nand they will really want to understand apart from the fact that it is
\ngoing to be policy driven. You know zero- for nothing, you said it is
\ngoing to be policy driven. What else?<\/p>\n
Answer by the Vice President:
\nThere is nothing new about Zero-Budgeting.\u00a0 Lagos state implemented
\nZero-Budgeting from 2001 and still implements that Zero-Budgeting till
\ntoday. So there is nothing new, let it not be seen as something that has
\nnever been tried and tested.\u00a0 This is something that has been done.
\nBasically what it means is this. You know, we are told this is what we
\nhave, we have N1 million. We all agreed and that is the envelop system,
\ntake your N1 million, distribute it as you wish. This involves justifying
\nat every stage; tell us what you really need to achieve this objective.
\nThis is your objective; this is what you want to do.\u00a0 So tell us what you
\nneed to achieve it.\u00a0 So you come from the bottom-up as it were.\u00a0 And you
\ntell us what it is that you need at every stage.\u00a0 So you cannot for
\nexample, say last year we bought 200 computers and this year we are also
\ngoing to buy 200 computers, no. Budgeting is much more of a disciplined
\nprocess and we are looking at every stage of that whole process.<\/p>\n
What we are saying is that you don\u2019t start from the top, you don\u2019t say I
\nhave N1 million this is what I am going to give you, no you start from the
\nbottom.\u00a0 You have nothing, you are starting with zero, you tell me what
\nyour needs are so we are going to do it, that\u2019s it.<\/p>\n
Questions 5
\nWill the agencies still be allocated certain funds?<\/p>\n
Answer by the Vice President:
\nYes they will.\u00a0 What we are saying is the process. If for example under
\nthe old system you got N5 million for budget, we hope that this system
\nwill remove inefficiency because you are justifying it. We are not just
\ngiving you the money and say well, allocate it as you want. It is a much
\nmore rigorous system because it means that you have to show why it is that
\nyou need this. It\u2019s much more rigorous.\u00a0 That\u2019s why, you know, it requires
\na bit of capacity and as we go along we try to develop that capacity.\u00a0 You
\nmust show as we go along, why is it that you need this, why is it that you
\nneed that, you know. And then hopefully, you will be able to get what it
\nis you want to achieve that objective but there must be a process for
\njustifying it. The reason why policy is important here is because we are
\nalso trying to direct our resources towards the objectives we want to
\nachieve.<\/p>\n
If you know Universal Healthcare Insurance is your important objective you
\ntry to justify it. And we are trying to direct resources to the particular
\nareas that we think must be concentrated on.<\/p>\n
Question 6
\nThe Foreign Currency Policy where you cannot pay into your domiciliary
\naccount has one way or the other affected the availability of foreign
\ncurrency somehow and then the foreign investors, they cannot easily pay
\ntheir profit. Now, is there any plan to ease this. Is it a short time
\npolicy?<\/p>\n
Answer by the Vice President:
\nOf course you know that it is a policy option.\u00a0 You have to make tough
\nchoices.\u00a0 So the CBN faced with very, very low foreign exchange on account
\nof the fallen oil prices.\u00a0 It has to take some tough policy choices.\u00a0 One
\nof these was exchange control but you must accept that. Of course because
\nthere is not just enough foreign exchange and there is sharp drop, you
\nmust control foreign exchange especially when you are a largely import
\ndependent economy.<\/p>\n
Now here we are faced with several people who want foreign exchange. Some
\ntime you look at the actual demands and the demand is huge. I don\u2019t want
\nto come up with figures that I am not entirely certain about as at today.
\nBut it is a huge amount. You have to control that demand.\u00a0 So the Central
\nBank adopted a demand management strategy for the short term and had been
\nreally successful so far.\u00a0 One thing that happened is that our foreign
\nexchange reserve has stabilized and our current account deficit has
\nnarrowed, it is short term and there is a reasonable degree of success. It
\ncannot be a long term strategy.\u00a0 For a long term strategy, we want an open
\nforeign exchange market where that market must be one that has the
\nresources to make operation robust open.<\/p>\n
On the long term we expect that the Central Bank will ease restrictions as
\nwe go along in the medium to long term. Hopefully, we will be able to go
\nback; more or less where it was a bit easy, where there was quicker
\nfreedom of movement of foreign exchange. Definitely it is short term there
\nis no question at all that it is a short term measure.<\/p>\n
Question 7
\nOn the general economy sir, there is this fear that Nigeria\u2019s economy is
\nslipping into recession. Is there anything or a quick fix that government
\nis hoping to put in place?<\/p>\n
Answer by the Vice President:
\nYou must know that all over the world, there is a slowing down in
\neconomies. Our slowing down is greatly affected by drop in oil revenue.
\nBut we think that in the next two quarters, especially when we are able to
\nimplement the budget, we think that we will be able to ramp up growth a
\nbit more; you know we think that that will definitely improve growth.
\nThere is no question at all that if you have as it is now, a budget that
\nwas essentially meant to fill in the gaps, there is very little that can
\nbe done.\u00a0 By the time 2016 budget is implemented, we will be able to ramp
\nup growth. There is improvement in power, it will help industry to spring
\nup and some of the policies we want to put in place will also be helpful.
\nAgriculture will be kicking, we hope that funding for SMSEs will be
\nkicking, the trajectory will be good. I don\u2019t think we will, as some have
\nsuggested that recession is inevitable, I don\u2019t think so. I think that we
\nare well on the way, especially if we are able to implement our budget we
\nwill get out of the worse part of where we are today.<\/p>\n
Question 8
\nThe TSA implementation is another issue causing a lot of pains to some
\npeople now, some of the MDAs are beginning to complain that the policy is
\nbiting hard and some of them say they no longer have access to funds, even
\ntheir own expenditure budget is now holding up. My question is with media
\nreports that some agencies \u2013 NNPC has been exempted from this TSA. Just
\nyesterday one director was telling me that NNPC has not been \u201cTSAed\u201d.\u00a0 We
\nwant to find out why would that be?<\/p>\n
Answer by the Vice President:
\nI am certainly not aware that any particular agency has been exempted.
\nClearly there is no exemption. I think some agencies have tried by way of
\nexplaining why they have difficulties getting certain exemptions so
\nperhaps in the process of trying to get the exemption, of course you will
\nwait for the outcome but nobody has been granted an exemption and I know
\nthat even NNPC has complied to a certain extent. I know that they may have
\nsome outstanding but NNPC has definitely started to comply but don\u2019t
\nforget that NNPC has several foreign accounts. Any MDA that has foreign
\naccount may be given a particular outlet with the CBN and all of that. I
\ndon\u2019t believe that any MDA has been exempted. Certainly I am not aware
\nthat NNPC has been given any exemption. Those who complain about the TSA;
\nas you know, any policy at all, especially the policies that may not allow
\nthe kind of laxity that has to do with running account of your own in
\nseveral different accounts, in additional banks and all of what that
\nimplies, that does not necessarily mean that corrupt activities is going
\non.<\/p>\n
One of the key issues why TSA was implemented is because government has a
\nduty to know what its entire revenue profile is.\u00a0 There is no government
\nto my knowledge who does not know how much it has in terms of receipts.
\nUnfortunately what has happened in the past few years is that there are
\nagencies that have accounts that government is not even aware of.\u00a0 In some
\ncases some revenue agencies will take the revenue and some of them
\ninterpret their laws to mean that you can take revenue, retain certain
\namount and give certain percent back to government. There is nothing wrong
\nwith thinking that way but the constitution is very clear. The
\nconstitution says that all revenue must be paid into the government
\ncoffers first.\u00a0 Now you then have your budget.\u00a0 When you then present your
\nbudget, you are then given the resources to run your organization but you
\ncannot become the first repository of government fund.\u00a0 Any normal
\ngovernment enterprise to the best of my knowledge must first pay into a
\nbank. Pay it first and then run a budget of your own expenditure and I
\nthink that is very important, you see, the idea that you should first
\nspend what you have, like in NNPC.\u00a0 The NNPC was particularly guilty of
\nrunning huge expenditure and then remitting some back to government and
\nyou saw how much NNPC expended in the past years. Even the PWC report, in
\nabout 18 months NNPC takes $1.85 billion on remuneration, and spent almost
\n$700 million on travel and training.\u00a0 If you have that kind of access to
\nrevenue then you can spend what you like.\u00a0 Well, you ought to have a
\nbudget.\u00a0 So if government says it cannot afford $700 million for training
\nall we can give you is $100 million that\u2019s all we get. But if you have
\naccess to all the money then you can decide how much you want for your
\ntraining budget.<\/p>\n
What it means is that you have your own budget that is not the budget
\napproved by the National Assembly.\u00a0 There has to be appropriation and that
\nis what the constitution says. The constitution process is one that
\nguarantees transparency in the process of expenditure of government
\nrevenue.\u00a0 That is why it is so important that we have TSA so it gives
\ngovernment a clear picture of what it holds, what it earns and then
\ndecides how it spends its money.\u00a0 Of course it will involve some problems
\ninitially. There is no question about that. And that is no reason to
\nreverse or be bothered about a decision that obviously has greater
\nbenefits. Some may feel that they have been restricted but as we go down,
\nthings will be eased and things will fall in place.<\/p>\n
Question 9
\nYour Excellency, 2016 budget preparation, what state are we?<\/p>\n
Answer by the Vice President:
\nWhat we are doing at the moment is that we are working on the MTEF and we
\nexpect that that will be submitted to the National Assembly very shortly.
\nA lot of the ministries are already working, by Monday we will be sending
\nthe guidelines to the ministries – the guidelines for the Zero-Budgeting
\nprocess. We have tried to sensitize them; several meetings have been held
\nwith revenue generating agencies \u2013 FIRS,\u00a0 Budget Office, National
\nPlanning Commission, all the revenue generating agencies.\u00a0 We are
\nbasically meeting and working out the parameters for the new budgeting
\nsystem.\u00a0 By Tuesday the guidelines will be sent to them but I can\u2019t say
\nnow when the budget will be ready.\u00a0 It\u2019s a new process, it\u2019s a lot of work
\nand we are trying to work round the clock and we are holding meetings day
\nby day and the last meeting we had was Wednesday, we have another on
\nTuesday, and the agencies are meeting.\u00a0 It\u2019s a rigorous process; I don\u2019t
\nwant to commit to any timelines or dates. Very soon, hopefully, we are
\ngoing to have our ministers in place and they are also going to join.<\/p>\n
Question 10
\nAnother question sir, a follow up to the TSA, Zero-Budgeting and cutting
\ndown the ministries. Going by the number of ministers which the President
\nhas already mentioned, are we looking at a situation where some ministries
\nwill be merged very soon, where parastatals will be merged?<\/p>\n
Answer by the Vice President:
\nDefinitely we are not going to have as many ministries as we have right
\nnow. There is no question at all about that.\u00a0 The President has made it
\nquite clear that he intend to work with fewer ministries and of course you
\nmay not have fewer ministers because the constitution says that you must
\nhave a\u00a0 minister from every state.\u00a0 But surely you must have fewer
\nministries and that is definitely what the President has said not once,
\nnot twice.<\/p>\n","protected":false},"excerpt":{"rendered":"
*We will diversify, Scale-up MSMEs & Reduce pressure on foreign exchange Question: Your Excellency, the 2015 and 2016 budgets, where are we at that level? May be you need to…<\/p>\n","protected":false},"author":1,"featured_media":41107,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[17,8],"tags":[],"class_list":["post-42726","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exclusive","category-interviews"],"yoast_head":"\n