CBN Fails To Account for $11 bn As Minister Warns of Recession

By Fola James

Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning has warned of imminent economy recession due to uncertainty in global economy, gradually leading to movement of foreign investments from the country.

This has made the increase of Customs duty, Stamp Duty, Value Added Tax, and Company Income Tax absolutely necessary, to generate more “revenues especially remittances from Government Owned Enterprises, possibly up to N1 trillion p.a.,” the minister said.

Expanding the tax net, Zainab said is the only way out of the current economic crisis, and as part of effort “To enhance Independent Revenue generation and collection, Government will aim to optimize the potentials operational and collection efficiency of GOEs with a view to generating significantly higher revenues required to fund the FGN budget.

The minister also stated that “Current revenue performance of GOEs will be addressed through the effective implementation of the enhanced Performance Management Framework. The key elements of the reform initiative include Performance Contracts for Chief Executive Officers (CEOs) and key management staff, which will set financial indicators and targets for each GOE

“The cost-to-revenue ratio of GOEs has by a Presidential directive been limited to a maximum of 60%-70% while regular monitoring and reporting of revenue and expenditure performance of GOEs will be undertaken by both the get Office of the Federation and the Office of the Accountant General of the Federation.

“We shall also work closely with the National Assembly to amend relevant laws that need to be amended to help with the SRGL.

“We have revised the 2020 FGN budget and will accelerate implementation to maintain budget credibility, enhance GDP growth and promote social inclusion. The draft 2021 — 2023 MTEF/FSP has been prepared against the backdrop of a global recession and heightened global economic uncertainty.

“The draft 2021-2023 Medium Term Fiscal Framework shows that there are continuing global challenges due to the COVlD-19 pandemic. The medium-term outlook for Nigeria suggests that fiscal risks are somewhat elevated, largely due to Covid-19 related disruptions which have exacerbated structural weaknesses in the economy.

“In furtherance of our objective of greater comprehensiveness and transparency in the budget process, the FGN 2021 Budget will reflect the revenues & expenditures of all [about 60) significant GOEs (excl. NNPC), not just 10 as in the 2020 budget.

“Weaker-than-expected economic performance threatens our ambitious revenue growth targets, as seen in the 2020 revised budget and the updated medium-term projections. Achieving fiscal sustainability and macro-fiscal objectives of government will require bold, decisive and urgent action. Government is determined to act as may be required.”

Meanwhile, the House of Reps, on Wednesday said the Central Bank of Nigeria failed to account for the $11bn withdrawn from the Excess Crude Account for the implementation of the failed National Integrated Power Projects.

The lawmakers said the CBN Governor, Godwin Emefiele has failed to give full details on the withdrawal, from the ECA between 2005 and 2007 to finance the NIPPs.