Adeosun: N165bn Monthly Civil Service Wage Bill Not Sustainable

0

• Says FG like states, did not save, to introduce ministerial debit cards • Calabar-Lagos rail project included in revised budget details transmitted to president

Obinna Chima and Nume Ekeghe in Lagos and Damlola Oyedele in Abuja
The Minister of Finance, Kemi Adeosun has said that the N165 billion civil service monthly wage bill is over-bloated and can no longer be sustained by the federal government.

The minister spoke on Thursday in Lagos at a meeting with the Newspaper Proprietors’ Association of Nigeria (NPAN) attended by her counterparts in the Ministry of Information, Alhaji Lai Mohammed, Ministry of Environment, Ms. Amina Mohammed, and Ministry of Agriculture, Chief Audu Ogbeh.

Adeosun, who provided details on the economic reform agenda of the federal government, said the N165 billion being paid to federal civil servants monthly represented 40 per cent of the total spending of government, reported the News Agency of Nigeria (NAN).
She said the figure was too high and the government was pursuing aggressive measures to detect and prosecute ghost workers and other saboteurs in the system.

“We spend N165 billion every month on salaries and when I came in there was no checking.
“Now, we have created a unit assigned with the sole responsibility of checking the salaries and catching those behind the over-bloated salaries,” she said.

Adeosun said the Integrated Payroll and Personnel Information System (IPPIS) introduced by the previous administration was defective and sabotaged by the elements benefitting from the salary fraud.
She said many federal government establishments including the police were yet to be captured in the system.

According to her, it was shocking that the Nigerian Railway Corporation (NRC), which is not fully functional, still had 10,000 workers in its payroll serviced by government.
The minister assured her audience that government would correct the anomalies in the payroll system and weed out all ghost workers in the civil service.

Adeosun said that the fiscal focus of the administration was to ensure economic growth that would be measured on job creation and productive sectors growth.

“The economy is not measured by how many private jets we have but how many jobs we create. People must be productive for the economy to grow.
“We have been a consumer economy, but we want to be productive and stop buying everything from abroad.

“We have been borrowing to pay salaries for years and that has to stop because it is not sustainable.
“Last year, we spent N64 billion on travelling and only N19 billion on roads. Travelling does not grow the economy and this must also stop,’’ she said.

The minister said the compound Gross Domestic Product (GDP) of the country had been negative in the last 10 years and the administration was working to correct this.

She added that the administration would be the most disciplined government the country has ever had in terms of fiscal accountability and responsibility.

Also speaking at the meeting, Ogbeh said government would reposition the agricultural sector to become the mainstay of the economy.

“The ministry will give policy direction and coordination to make farming attractive and for people to practice it as a business.

“Government will put a policy in place to recover the $22 billion which is floating out of the country’s resources to sustain farms in other countries back to our villages.
“Government will also ensure that banks review the double-digit interest rate on loans to farmers and other productive sectors.

“The change promised may appear to be slow, but it is actually taking place. In this year, we have harvested millions of tonnes of rice,” he said.
The Minister of Environment, in her contribution, said government would complete the clean up of Ogoniland in the next one year and ensure the degraded land is revived for productive purposes.

She said the Great Green Wall project targeted at planting trees to control desert encroachment would also be given priority by the administration.
In another forum, Adeosun also faulted the position of her predecessor, Dr. Ngozi Okonjo-Iweala, who had blamed the inability of the immediate past administration to save for a rainy day on the state governors.

The governors, the former finance minister said, had insisted that all revenues accruing to the federation must be shared, effectively eroding the fiscal buffer that would have shielded the economy from external shocks.

But countering this position, Adeosun pointed out that 52 per cent of the Federation Account allocation goes to the federal government, so if the federal government under former President Goodluck Jonathan had the will to save, it would have saved its own portion of its allocation.

Adeosun, said this while speaking on Channels Television’s current affairs programme, Sunrise Daily, yesterday.
She pointed out that it was unfair for the immediate past administration to always blame the states.

Adeosun, who at the time was the Commissioner for Finance in Ogun State, said: “Let me explain the structure of states and the federal government. Fifty-two per cent of the money actually comes to the federal government. So even if the state governments said they wanted to spend theirs, the federal government too didn’t save its portion… the federal government was not saving.

“In fact, the federal government was borrowing even to pay salaries. And that is where the disconnect comes in. So I think it is largely unfair for the federal government to say you (the states) were the ones that made me to spend – I can spend mine, but I can’t force you to spend yours.

“But the federal government didn’t save its share either. So, collectively, I don’t think we should be trading blame. I think what we should be doing now is to look at the lessons we have learnt.
“The federal, state and local governments must have savings. Even if we don’t have savings, we can have investments.

“Look at Saudi Arabia, it has about $700 billion of reserves unspent, and we have about $28 billion. Oil goes, oil comes but they still have something to show for it.”
She however said the drop in crude oil prices presented a good opportunity to reset the economy, adding that the opportunity for diversification of the economy created by the crisis should not be wasted.

She also spoke on the measures adopted by the federal government to assist state governments that are unable to meet their various statutory obligations.
“Everybody is now extremely sober. Every Nigerian is sober. All the governors have realised that oil prices can plummet from $110 per barrel to $28 per barrel over such a short period of time and we could be so exposed that we cannot even pay salaries.

“So there is a sobriety that has set in and I don’t think we should waste. We are working very hard with the states and we said to them, first of all we are not bailing them out.

“We have said we would have a fiscal restructuring plan. Whatever we are doing is conditional, they must go and drive efficiency, which means the states must do biometric capture of their staff, know those that are paid, put in efficiency units just as we have done at the federal government level where we are seeing a level of savings that it can generate.

We told them they must sign up to a restructuring plan and if they don’t want a restructuring plan, then we would not help them in any way,” Adeosun explained.
Responding to a question on the Sovereign Wealth Fund (SWF), she said the fund was doing well and making the necessary investments.

However, the finance minister said the federal government wants to “reposition it and have it focused in line with government’s objectives which is investments in infrastructure”, observing that the government realised that even with 30 per cent of the budget allotted to capital spending, the country’s infrastructure gap is so wide that government alone could not bridge it.

“So what we are hoping is that the sovereign wealth fund now becomes a channel to attract further private money particularly from investment funds abroad. So we really want to focus on infrastructure – toll roads, bridges, power plants, things that would help the economy grow,” she said.

On efforts to eradicate ghost workers in the ministries, departments and agencies (MDAs), Adeosun commended the Economic and Financial Crimes Commission (EFCC) for the job done so far in this regard.

Adeosun disclosed that the EFCC had set up a unit that deals with payroll fraud, saying it would soon start taking those involved in the scam to court.
Furthermore, she revealed that the government had discovered a syndicate involved in the fraud.

“There is actually an organised network and I don’t want to speak too much about how they were doing it so some people might now think that it is a good business to go into. But it is a worrying trend and we spent N165 billion on salaries and pensions.

“When I came into office, there was no audit, there were no controls. Once you get on that payroll, they pay you forever. Even dead people were still being paid.
“So we have now put in what we call a continuous audit team and they do nothing else, but audit that payroll. And that is how we are still uncovering and there are still more,” she said.

The finance minister also disagreed with a recent comment by a former Minister of Education, Mrs. Oby Ezekwesili, that President Muhammadu Buhari had introduced “archaic and opaque” economic policies which are hurting the poor.

Ezekwesili, while speaking at The Platform, a public policy forum in Abuja last Saturday, had said that the president was using the same methods of a command and control economy he had used when he was a military head of state.

But Adeosun said: “I don’t agree that we have a command and control economy. What we are trying to have is a planned economy. There must be some planning. When we were growing, they used to say Nigeria has the highest number of private jets and we would all clap for that.

“But we also have the most terrible unemployment rate. So what we are trying to do is to plan for the future and have an economy that meets the needs of Nigerians.

“We are a huge economy, so we shouldn’t have an economy where growth is not inclusive and allows few people to prosper at the expense of others. So I don’t think we have a command and control economy.”

Continuing, the finance minister pointed out that there is a big misunderstanding about the Treasury Single Account (TSA) and how it operates.
“What is the TSA? It is a huge bank account. So what happened was that all the agencies of government closed their accounts in various banks and moved them into a single account at the Central Bank of Nigeria (CBN).

“Now, at every point in time, the balance on that account is quoted, it can be N3 trillion today, maybe tomorrow it is something else. But that money is everybody’s money.
“The Nigerian National Petroluem Corporation (NNPC), Federation Account Allocation Committee (FAAC) money is in there, and so not all of that money is available for spending.

“You can’t just go and take NNPC’s money to build a bridge. Some of that money had already been earmarked for certain things and some already have liabilities penciled against them.
“What we are doing is sitting down with the agencies because each individual agency has a sub-account, and saying out of their balance in the TSA, how much of it is part of the surplus that should have gone to the federal government.

“That is, how much of it is a free cash float that can go into the budget. So it is not like everything in the TSA can be spent,” she explained.
Adeosun, nonetheless, stressed that the TSA has given the federal government better control and better visibility of government’s revenue.

She also reiterated that the recently introduced Efficiency Unit by her ministry would help stop wastage and ensure efficiency in government spending.
According to her, ministerial debit cards would also be introduced by her ministry in the next few days in order to rein in and track what MDAs spend and also support the cashless policy.

She said three banks had been given the government mandate on the cards, which would be introduced very soon.

On other measures to block leakages, Adeosun said: “We have been borrowing to pay salaries for years and the reason is that revenue is leaking and that is one of the things I am very passionate about sorting out.

“Let me explain this: at the moment, there are only three lines of federal government revenue that we account for. That is money that comes in from oil, taxes from the Federal Inland Revenue Service and the Customs and Excise Service.

“All the other revenues of government sit in boards of corporations. And most of them have not been remitting any money into the Federation Account.

“We can’t afford to waste money the way we wasted money in the past. Let me give you a shocking statistic. Last year, we spent N19 billion on roads in the entire federation, but we spent N64 billion on travels.

“So we set up the Efficiency Unit to look at those expenses. So, for example, we now have industry guidelines through a circular we sent out that public officers cannot fly first class on government money.
“You also cannot even travel on business class unless you are a minister or permanent secretary. If you are traveling for government business, why should you travel business class?”

She said there has been strong collaboration between the fiscal and monetary authorities, restating that the federal government would borrow from external sources so as not to crowd-out the private sector.

“We have said from the beginning that we will only borrow 50 per cent of what we need from the domestic market because we don’t want to crowd-out the private sector. We want the banks to go out and lend to the real sector, we don’t want to be competing with the private sector,” Adeosun said.

When her interviewers reminded her that a lot of Nigerians were unaware of the existence of an economic management team in the present government, Adeosun said: “Are you saying they don’t know the ministers that are in charge of the economy? You don’t know the vice-president? You don’t know me, the two Ministers for Budget and National Planning, the Minister of Trade and Investment?

“There is an economic team. It is chaired and managed by the vice-president. I am a member, the ministers of budget are members, the minister of trade and investment is a member, and the minister of information is a member, the head of the Debt Management Office (DMO) is a member, the Director General of Budget is a member.

“So there is an economic team. It is just a different structure from having a Coordinating Minister for the Economy (CME). Remember that under the CME system, the budget office was under the Ministry of Finance. But the budget office has now moved to National Planning.”
According to her, the federal government’s economic team was very competent, hardworking and would turn the economy around.

“Criticism is good. You just have to listen to people, but we have to do better in telling people what we are doing. The economic blueprint is very clear.
“We are going to invest in capital projects to ensure that we diversify this economy. We have been talking about diversification since I was a child and we have diversified nothing.
“If we just feed ourselves rather than importing food, we would create jobs and wealth. We have a huge population, huge land mass and what is missing perhaps is unfortunately infrastructure.

“Let’s take something as simple as tomato paste as an example. We import tomato paste from China, but we have tomatoes getting rotten in Kano. But if we have rail and power, we can process and move these products and we can compete,” she said.
She assured Nigerians that “as soon as the budget is signed, we are going to pump N350 billion into the economy in this quarter and we are going to do so every quarter until we stimulate growth”.

“And we would see growth if we spend money on those things that would create jobs. What I will tell you is that there are no quick solutions to fixing the economy.
“If you have cancer, you cannot take Panadol, you have to take proper medication. I don’t want to come here and give people false hopes. I don’t want to use the word magic because ministers get into trouble when they use the word magic. It has to be done painstakingly,” she said.

Meanwhile, the N60 billion Calabar-Lagos rail project, which first set off the impasse between the presidency and the National Assembly over the 2016 Appropriation Bill has been included in the budget details transmitted to President Buhari yesterday afternoon, sources in the presidency have revealed.

The Kano-Lagos rail project, which was initially allocated N106 billion was slashed to N60 billion in the revised details submitted to the president.
Presidency officials, who were privy to the revision of the budget details, said the extra funds for both rail projects were sourced from a trade-off from the Baro inland seaport project in Niger State, which now has no allocation, and funds reallocated from the airport security and navigational equipment projects.

Had the budget been passed without the current revision, the Baro inland seaport would have been the first of its kind in northern Nigeria.

In the revised budget details, the Ministry of Health also got an extra N5 billion for polio and other vaccines, and for the ministry to meet its counterpart funding obligations.
All sub-heads under the health ministry were however slashed by 30 per cent to provide the N5 billion for polio and other vaccines.

The Ministry of Communications got a N1.7 billion extra, which was removed from the N3 billion allocated to the Nigerian Communications Satellite (NIGCOMSAT) by the Senate and House Committees on Communications.

The sources further revealed that 80 per cent of the grey areas highlighted by the Ministries of Power, Works and Housing, Water Resources, Education and Solid Minerals were all granted. Major roads which had monies reduced were all augmented.
In spite of the alterations, the size of the budget envelop of N6.06 trillion was retained because one of the agreements before the composition of the harmonisation committee comprising officials from the executive and National Assembly was that the key budget parameters would remain intact.

The leadership of the National Assembly had mandated the harmonised committee headed by the Deputy Speaker, Hon. Yussuff Sulaimon Lasun, to grant 80 per cent of all the grey areas highlighted by the executive.
The implication however was that 80 per cent of the input of the National Assembly and its standing committees were removed, a development that is causing some dissatisfaction among the lawmakers, who were not consulted before the decision was made.
For instance, 80 per cent of the roads that were approved by the Senate and House Committees on Works were removed.

THISDAY had exclusively reported on Wednesday that the presidency and National Assembly had reached compromise to retain the main underlining figures and parameters of the budget, but the executive gave some room to the National Assembly to alter, where necessary, up to 20-30 per cent of the budgets of the MDAs.

This was agreed in recognition of the independence of the legislature with respect to appropriation, and so that it does not end up being a rubber stamp for the executive, a Senate source had explained.

Based on this principle, the source added, the joint committee of the National Assembly and the executive reviewed the subheads of the MDAs to ensure that where budget cuts or additions exceeded the 20-30 per cent threshold, they were amended in line with the agreement reached on the budget.

With work finally concluded on the revised budget details, the document was handed over to the Special Adviser to the President on National Assembly (Senate), Senator Ita Enang, at about 1 pm yesterday by the deputy speaker.
Several lawmakers, who spoke off record, confirmed that it had been given to the president’s aides.

A lawmaker, who served on the harmonisation committee, also confirmed that the controversial Calabar-Lagos rail project was “included” in the budget, not “restored”.
Another lawmaker explained that the revision took longer than expected because of attempts to introduce new projects.

“Yes, several additions made by the lawmakers were removed, but the executive kept trying to introduce new things that were not contained in either the first or second documents presented by the president.

“But we stood our grounds and made it clear that since we were working within certain parameters, both chambers would have to consider it if we could expand the envelop,” the lawmaker said.

The Deputy Chairman of the House Committee on Media, Hon. Jonathan Gaza, speaking at a press briefing, expressed hope that with the revision, the budget would be signed very soon.
“The resolutions have been transmitted or rather have been submitted to the president,” he said.

He added that revising the budget was borne out of the need to move the country forward.
Following the conclusion of work on the budget, the Senate and House adjourned plenary till May 12, 2016 to allow members of the Peoples Democratic Party (PDP) participate in their party’s congresses nationwide.