In spite of the unfortunate circumstance leading to her resignation, Ndubuisi Francis writes that the current administration should build on some of the legacies of former Minister of Finance, Kemi Adeosun
Until her emergence at the national scene as Minister of Finance in November 2015, Mrs. Kemi Adeosun was barely known beyond her home-state, Ogun, where she superintended over the state’s finance portfolio as commissioner for finance.
However, her call to national duty was a much more demanding task, requiring a deeper and keener acumen in the planning of revenue generation and management of the nation’s finances.
Fiscal Operations Management
Her assumption of duties as the Minister of Finance in November 2015,
Mrs. Kemi Adeosun has focused her attention on the initiation, development and aggressive implementation of innovative fiscal operations management policies and initiatives aimed at redressing the economic fortunes of the country, as well as facilitating the realisation of the administration’s drive for transparency and accountability. Undoubtedly, her experience in both the private and public sectors of the economy must have become handy
To her credit, many novel and bold reforms were put in place to significantly curtail wastages in governance, and reduce fiscal leakages.
The former minister has played leading roles in the development of various cost cutting initiatives through the pursuit of carefully thought out policies aimed at promoting transparency in the payment process, drastic reviews of the procurement process, the sanitisation of the public-sector payroll system, leading to the elimination of huge number of ghost workers, among others.
She played a poivotal role in the setting up of the Presidential Initiative on Continuous Audit (PICA), which has since become the key platform for ensuring controls and effective oversight over the utilisation of public funds under the present administration. Through PICA, she placed stringent checks on the expenditure of government revenue to ensure cost-effectiveness and accountability.
As a way of encouraging public participation in the fight against corruption, the former minister introduced the Whistle-blower Policy, which was launched in December, 2016. The policy is designed to support the fight against graft by exposing financial crimes and rewarding credible informants of such malfeasance. Working through PICA, the ministry has received 8,373 communications as a result of the Whistleblower Policy on contract inflation, ghost workers, illegal recruitment and misappropriation of funds. Out of the total communications, 1,231 are whistleblowing tips. The Ministry has undertaken 791 investigations and completed 534 of those investigations. Ten are presently under prosecution and four convictions have been secured.
Under the Whistleblower Policy, the federal government said it recovered directly, as a result of tips received from whistleblowers, the sum of N7.8 billion, US$378 million and GBP27,800. From the specific information provided on companies which underpaid their taxes, the government was able to recover the sum of N13.8 billion as a result of those specific tips. The Whistle-blower policy has helped tremendously in facilitating recoveries of ill-gotten funds and assets.
Voluntary Assets And Income Declaration Scheme (VAIDS)
On June 29, 2017, the federal government launched a revolutionary and bold reform initiative – the Voluntary Assets and Income Declaration Scheme (VAIDS), through which citizens (taxpayers) are offered a window of opportunity to regularise their tax status relating to previous tax periods, without incurring penalties. Prior to the introduction of the policy, Nigeria’s tax compliance record was very poor with only about 14 million out of an estimated 70 million economically active Nigerians paying their taxes. This has become more compelling, given Nigeria’s Tax Revenue-to-GDP ratio of 6 per cent, which has remained one of the lowest in the world, when compared with countries in Nigeria’s peer group. The implementation of VAIDS has seen an increase in the number of tax payers from 10 million to 14 million in 2016 and 19.3 million in 2018. Some local and foreign companies are now disposed to the VAIDS initiative, and have started to regularise their tax status.VAIDS was keenly embraced by 5,122 taxpayers which resulted in tax liabilities of over N92 billion with payments so far in excess of N34 billion. The outstanding liability of over N57 billion is to be paid in instalmentally.
Adeosun believed this revenue, which may not have been realised without VAIDS, will contribute to government revenue used in implementing developing projects. She noted that VAIDS had facilitated the recovery of tax debts thereby reducing costs of compliance enforcement.
Creation of Efficiency Unit
The Efficiency Unit (E-UNIT) was set up in November, 2015, about two weeks after her assumption of office. The Unit was established to reduce wastages, promote efficiency, ensure prudence and add value for money in all government expenditures.
The E-Unit has embarked on several cost cutting initiatives that have influenced the issuance of Circulars to all MDAs by the Secretary to the Government of the Federation, the Head of the Civil Service of the Federation, and the National Salaries, Wages and Income Commission. The issuance of these Circulars has led to curtailed and better management of certain recurring processes and activities relating to travels, sitting allowances, souvenirs, and others resulting in savings.
Treasury Single Account (TSA)
The Treasury Single Account (TSA) project was conceived by the previous administration, but its aggressive and successful implementation was midwifed by Adeosun. Under this initiative, all federal government’s accounts with the commercial banks were transferred to a pool account with the Central Bank of Nigeria (CBN),known as the TSA. The Office of the Accountant-General of the Federation (OAGF), an agency under the Adeosun’s ministry, had the statutory mandate to drive the implementation of this policy with support from the Central Bank of Nigeria (CBN). The TSA has further brought about transparency and effective tracking of government’s revenues and blocking of leakages and abuses.
Clearing of Inherited Pension Arrears
During her tenure, the government settled outstanding pension arrears up to March, 2017. The sum of 41.5 billion was released by the Federal Ministry of Finance to pay off outstanding pensions arrears of 2014, 2015 and 2016, while the sum of N12.5 billion was paid out to clear pension claims for up to March, 2017, bringing the total payment of outstanding pension arrears by the current administration to over N54 billion – an unprecedented feat, which has been commended by the various workers’ unions.
Asset Tracking and Management Project
Under her supervision, the Ministry of Finance, launched the Asset Tracking and Management Project (ATM Project) in 2016. By the ATM Project, the federal government, for the first time, is able to locate, identify, assess and evaluate all its moveable and immoveable assets on a real time basis. Also, a Central Asset Register was created and domiciled in the ministry for recording the actual quantity, value, condition and location of all the capital assets belonging to the federal government. These initiatives are in line with the requirements of the International Public-Sector Reporting Standard (IPSAS), which has also been implemented under the supervision of the minister. The ATM Project and Asset Register initiatives become particularly relevant because of the importance attached to capital expenditure by the current administration.
Fiscal Sustainability Plan (FSP) and Budget Support Facility for States
In her quest to institute fiscal prudence, transparency and accountability in the management of states’ resources, Adeosun introduced the Fiscal Sustainability Plan (FSP). The FSP further seeks to improve public revenue, through rationalizing public expenditure, prudent financial management and facilitating sustainable debt management. The Framework has twenty-two core action points, which are expected to lead to the path of fiscal governance and sustainable economic growth.
The implementation of the FSP by the states is a condition precedent for them to access further budget support facilities from the federal government, to which most states have already benefited from, in line with its terms and conditions.