Financial Discipline… making every naira count. By Kemi Adeosun

Article written by Finance Minister, Mrs Kemi Adeosun. Read below...

Economists have long found Nigeria to be something of a conundrum. The macro picture has always appeared compelling - large population, oil reserves, mineral reserves, endless tracts of arable land, land and sea borders for regional domination. Indeed the absurdity of our underperformance is only surpassed by our ability to accurately quantify our losses and missed opportunities.

In the short period that I have been privileged to serve as Minister of Finance, I have observed that even the most basic systems and controls over the management of our resources are in dire need of strengthening. While we are regaled with and shocked by details of amounts stolen, diverted or wasted, we must face the cold reality that such acts are facilitated by weaknesses in our systems. Even if we successfully prosecute and jail every looter, ghost worker and other economic saboteur, there is every risk that those caught will only be replaced by persons who are just as bad, or worse - unless we radically strengthen our systems and institutions.

Our President’s brave and committed fight against corruption and waste is as much an economic crusade as it is a moral one. The objective is not just to stem the corruption and loss but to execute an economic plan to channel those monies into much needed areas that will support and reposition the economy.  In short, the fight against corruption is not about “retribution” and meting out punishment, it is about releasing funds for our economy. I am humbled to be part of the ongoing work on recovery and can report that the urgency in the work, especially our interface with nations where our money has been stashed, is propelled by our need for funds to invest into our economy. 

Our economic plans are not about austerity and frugality; if that were the case then we would not be attempting an expansionary budget. We could have pursued fiscal consolidation and maintained 2015 budget size, and then introduced severe public spending cuts to balance the books by laying off workers and cutting projects. Had we done so, we would by now be the darling of the IMF and other multi-laterals. 

Conversely, we are undertaking an ambitious counter cyclical strategy to stimulate our sluggish economy and expanding government spending with a focus on infrastructure, the true catalyst for economic growth. This will have contractors returning to site and re-engaging workers, it will see new projects commencing, arrears released and economic activity reinvigorated across the nation.  We plan to take advantage of low global prices for commodities and contract prices. Existing contracts are being renegotiated downwards, with significant savings recorded and new projects priced to reflect current commercial realities. Our spending stimulus is private sector driven, supported by a robust procurement system that will see permanent local capacity built in a number of sectors including oil and gas, housing construction and agriculture. However, and this is the key differentiator, we plan to spend in a disciplined manner that will extract the maximum value for every naira spent.

The process of building the internal control framework to support this need for disciplined spending has begun in earnest. Our Efficiency Unit has reviewed four years of detailed expenditure data to identify trends and is already negotiating volume discounts that appropriately reflect the buying power of government. Personnel remains our largest cost. In addition to the BVN driven cleaning of our payrolls that has so far removed 23,000 fraudulent entries, we have initiated significantly stronger controls over our payroll.  These efforts will exert a constant downward pressure on personnel costs until such a time as we have assurance that every payment is accurate and valid. A similar process is now commencing in Pensions. The N160 Billion spent monthly on personnel and pensions related costs demands this as an absolute minimum. 

The revenue focus is non oil. We are revisiting historical decisions that are no longer in the best interests of the national economy. The establishment of various Boards and Parastatals to undertake the operational and revenue generating business of government was a well-intentioned attempt to provide separation from policy makers. However, as the economy has grown, so too has the revenue earned in these agencies and their financial autonomy has grown in a manner that no longer fully serves the public interest. Port charges, maritime charges, airport landing fees, visa charges, passport charges, telecoms licence fees, among many others, must be tracked and accounted for. 

While the Fiscal Responsibility Act was designed to provide control, actual compliance has been poor. The result has been leakage on a staggering scale, as findings from our ongoing audits suggest. This is a serious issue. The upside is a significant revenue opportunity which the TSA implementation has given us sight of, and which we are supporting with a proactive drive for improved accountability.

At the same time, our traditional revenue sources are being supported to be more effective.

In Customs, we are making the necessary investments in container scanners and other equipment required to improve collection efficiency. This is combined with the results of a compensation survey which will see the introduction of performance related pay, to reduce corruption and create an alignment of interest that will enhance revenue generation. With FIRS there is a well-defined plan to enhance compliance by widening the tax net. Using data to drive tax compliance, we will ensure that the tax regime is efficiently administered and that everyone pays their fair share.

There is a need for disciplined and effective system of managing our financial resources to ensure maximum value. We will no longer measure performance by the size of our budget or the amount disbursed; we must measure by the impact of that expenditure on the lives of Nigerians. To measure and manage this we have already made some key changes in the way funds are released. We have abandoned the old system of capital releases that funnelled a proportional share of available funds released to each Ministry, Department and Agency. We have a robust system in place where funds are tied to specific outcomes as documented by each agency. This is being supported by follow up reviews to ensure implementation.

As Benjamin Disraeli once said, “We are not creatures of circumstance; we are creators of circumstance.”  I am firmly convinced that Nigeria is on the right path. The path of discipline will confront some age old destructive habits. It will challenge some unwritten rules, and I personally will step on some highly placed toes on this journey. All this I am fully prepared for, and so I do not expect nor do I particularly want to be popular.

However, I will act in the best interest of all Nigerians to ensure that we build the economy that we desire and richly deserve.

This is the second of three articles by Mrs. Kemi Adeosun, Minister of Finance, Federal Republic of Nigeria.

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Migrant Crisis: EU, Turkey Close In On Deal

The EU and Turkey said that they are close to reaching a deal on how to ease the migration crisis at a summit in Brussels.

European Council President, Donald Tusk on Tuesday, said that irregular migrants arriving in Greece will be returned to Turkey.

For each migrant returned, Turkey wants the EU to accept a Syrian refugee on a one-for-one basis, and offer more funding and progress on EU integration.

Mr Tusk said that leaders had made a “breakthrough”, and he was hopeful of concluding a deal next week.

He said the progress sent “a very clear message that the days of irregular migration to Europe are over”.

Talks would continue ahead of an EU meeting scheduled for March 17 and 18.

Europe is facing its biggest refugee crisis since world war two. Most migrants came via Turkey, which is already sheltering more than 2.7 million refugees from the civil war in neighbouring Syria.

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North Korea Threatens US And Seoul

North Korea has warned that it will launch nuclear strikes on the US and South Korea.

The order for a “pre-emptive nuclear strike of justice” was made in a statement which was put out by Pyongyang, the Capital of North Korea.

Such rhetoric is not uncommon, and experts doubt the North’s ability to put nuclear warheads on its missiles.

The military exercises, involving more than 300,000 personnel, were annual events and always generate tension.

The BBC reported that North Korea sees the annual US-South Korean war games as a rehearsal for invasion.

The South’s Defence Ministry had warned Pyongyang against any “rash act that brings destruction upon itself.”

The latest exercises came just days after the UN passed new sanctions against North Korea following its recent nuclear test and rocket launch.

On Saturday, the Philippines impounded a North Korean cargo vessel under the toughened measures. A presidential spokesman said the crew would be deported and the ship subject to a UN-mandated inspection.

The North responded to the sanctions by saying it was readying nuclear weapons for “pre-emptive” use, and by firing short-range missiles into the sea.

Seoul is expected to announce more sanctions of its own on Tuesday, which is likely to draw another angry response from Pyongyang.

The US and South Korea on Friday, also began formal talks on the deployment of a US missile defence system to the peninsula, a move strongly opposed by North Korea, Russia and China.

Beijing said that the Thaad anti-missile system compromised its security and would undermine its nuclear deterrent.

US Strike Kills 150 Somali Militants

The Pentagon said that over 150 Al-Shabab militants in Somalia have been killed in a US air strike.

Spokesman, Captain Jeff Davis, said that the strike hit a training camp where a “large-scale” attack was being planned.

The strike launched on the militants by both drones and manned aircraft, took place on Saturday and targeted Raso Camp, a training facility about 120 miles north of the capital, Mogadishu.

Mr Davis said that the camp had been under surveillance for some time.

The group has said it carried out a string of recent attacks including a twin bomb at a busy restaurant in the Somali city of Baidoa last month.

Also on Monday, the Australian navy said it had seized a huge cache of weapons on a fishing boat off the coast of Oman that was apparently heading for Somalia.

Grenade launchers, machine guns, and 2,000 assault rifles were concealed under fishing nets, a Navy spokesman said.

Al-Shabab, an affiliate of Al-Qaeda, was pushed out of Mogadishu by African Union Peacekeeping Forces in 2011, but has continued to launch frequent attacks in its bid to overthrow the western-backed government.

Lagos sets up revenue court to tackle tax evaders, defaulters.. housemaids, artisans to start paying taxes

For those who live in Lagos state who don't pay taxes..y'all have to read this. It's about to get serious. 

"The Lagos State Government on Tuesday said it would apply the relevant laws to ensure that more Lagosians voluntarily pay their taxes, just as it warned that tax evaders and defaulters would be prosecuted. 

State Attorney General and Commissioner for Justice, Mr. Adeniji Kazeem, who stated this during a press conference held at the Bagauda Kaltho Press Centre in Alausa Secretariat, said in view of the extreme financial downturn, there was the strong need for government to ramp up its Internally Generated Revenue (IGR), stressing that the state would spare nothing in enforcing the laws regulating tax payment.

He said the administration of Governor Ambode had put in place necessary measures to end the era of tax evasion and indeed avoidance in the state, adding that tax avoiders and evaders would be aggressively pursued in line with the provisions of the law.

The Commissioner, who disclosed that the Ministry of Justice had established a Rapid Tax Prosecution Unit to aid the Lagos Internal Revenue Service (LIRS) in its drive to collect taxes, added that the unit would work closely with the Revenue Court which the Chief Judge of Lagos State recently agreed to set up.

He said: “Prosecution and jail term for defaulting tax payers will be a tool that we will be actively using to ensure full compliance. Tax officers, I understand, will be very aggressive in their collection of taxes and the public is hereby advised to cooperate with them because obstruction of these tax officers in their lawful duty can and will lead to prosecution.

“Tax dodgers watch out because the long arm of the law will eventually reach you. All tax payers are also reminded that giving false information is also an offence and can be used in the prosecution of your tax default. If you pay your taxes regularly, you will have no problem,” Kazeem said.

On his part, the State Commissioner for Finance, Dr. Mustapha Akinkunmi, said the state generated at least N24.5billion from IGR in the month of January 2016, in line with the efforts of the Governor Akinwunmi Ambode-led administration to reform its tax system and develop a tax paying culture.

Akinkunmi said in the light of the reduction of federal transfers to states including Lagos, the state government was looking inwards to secure sustainable ways of increasing its revenue profile and plugging leakages in the system.

He said majority of the state’s IGR is generated through tax collection, administered by the LIRS.

According to Akinkunmi, the LIRS contributed 79 per cent to the State’s IGR in 2015, which equates to 56 per cent of the State’s total revenue including Federal transfers, adding that the revenue is expected to continue on an upward swing, driven by strong tax collection.

He said, “This trend of strong performance is continuing. In January this year, LIRS has contributed N24.5billion in revenue, attaining 98 per cent budget performance for the month and recording 12 per cent growth from the same period in 2014.”

The Finance Commissioner attributed the improvement in the revenue generation of the state to voluntary tax compliance by tax paying members of the public despite the harsh economic terrain.

On his part, the LIRS Chairman, Mr. Olufolarin Ogunsanwo, said the agency had consistently been at the vanguard of ensuring reforms in the state to improve the ease of doing business in Lagos, adding that such reforms would aid voluntary tax compliance.

Ogunsanwo said that government was already working to bring more members of the informal sector into the tax net, saying that the Tax Returns Form had been reduced to two pages as against the six pages document hitherto in operation.

He also said that the agency, in an effort to bring efficient service delivery closer to the people, recently commissioned two new tax offices in Tejuosho and Sangotedo, adding that efforts was also being made to open additional two Tax Stations within Amuwo Odofin/Festac and Alimosho axis.

He thanked willful taxpayers and implored Lagosians to continue to pay their taxes as at when due, saying that in doing this, they empowered the state government to embark on infrastructural renewal and provision of dividends of democracy to the citizenry. 

He said so far, the provision of the N4.8billion security equipment, provision of new ambulances, the N25billion Employment Trust Fund, the Light Up Lagos project, massive road construction, among others, had been provided through revenue generated from tax. 

SIGNED
HABIB ARUNA
CHIEF PRESS SECRETARY
MARCH 8, 2016

Photo: Nigerian Army's Chief of Training and Operations, Major Gen. Yusha'u Abubakar dies in a road accident

Chief of Training and Operations (Army), Major General Yusha’u Mahmood Abubakar and the Acting General Officer Commanding 3 Division Nigerian Army, Brigadier General MSA Aliyu were involved in a road traffic accident along Maiduguri-Damaturu road today, March 8.

According to a statement issued by the Acting Director Army Public Relations, Col. Sani Kukasheka Usman, Major General Yusha’u Abubakar died as a result of the incident, while Brigadier General Aliyu sustained injuries and is receiving treatment. Details will follow later.

How Google's Neural Network Hopes To Beat A 'Go' World Champion

South Korean Go champion Lee Sedol (right) poses with Google DeepMind head Demis Hassabis. On Wednesday, Sedol will begin a five-match series against a computer

Happy International Women's Day! India To Induct Female Fighter Pilots

Indian Air Force jet fighter aircrafts fly over an airbase in 2014. Starting this summer, female fighter jet pilots will be allowed in the Air Force.

Marking International Women's Day, India's Air Chief Marshal Arup Raha has announced that the Air Force will induct its first female fighter pilots this summer.

"As of now, three women trainees have volunteered to join the fighter stream. They are under the second phase of their training," Raha said, according to The Times of India.

He said they will enter the force "once they complete their training and are at par with their male colleagues," with the induction ceremony scheduled for June 18.

In India, women "currently comprise just 2.5 percent of the armed forces, working mostly in non-combat roles," according to the BBC. In the nation's Air Force, women have been flying helicopters and transport planes since 1991, Raha said.

The BBC adds:

"In 2014, Mr. Raha had expressed reservations about inducting women fighter pilots, saying that 'women by nature are not physically suited for flying fighter planes for long hours, especially when they are pregnant or have other health problems.'

"But in October, he changed his stance, saying the air force was planning to induct women fighter pilots 'to meet the aspirations of young women of India.' "

The U.S. Air Force has allowed female fighter pilots since the early 1990s. In 2013, NPR's Rachel Martin spoke with Col. Jeannie Leavitt, the Air Force's first female fighter pilot, about gender in the Air Force.

"Being the first female fighter pilot, there was a lot of attention and the attention wasn't what I wanted," she said. "I just wanted to fly fighters. But it was a significant change in policy and it was something very new and different. ... It was hard to blend in and be part of the squadron when there were media requests and interviews and such."

Leavitt, who also became the first female fighter wing commander, served in both Iraq and Afghanistan. Of actually flying a fighter jet, she described it as a "pretty incredible feeling."

"They are very powerful aircraft, as you can imagine, highly maneuverable and very lethal," she said.

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