The President Bola Tinubu-led federal government has begun an audit of the N22.7 trillion borrowed from the Central Bank of Nigeria (CBN) during the tenure of Muhammadu Buhari.
Wale Edun, minister of finance and coordinating minister for the economy, disclosed this on Tuesday at the Public Wealth Management Conference organised by the Ministry of Finance Incorporated in Abuja.
Edun also said the Nigerian National Petroleum Company Limited has been asked to improve oil production to boost revenue.
He said the government will pursue policies that will allow it to harvest revenue in real-time from government-owned enterprises and corporate entities.
Edun said, “We have to stem liquidity. The central bank has led the way in pointing out that the Ways and Means have to be pared down and eliminated, and that is what we agree with.
“We are going in that direction; there was an inherited amount of N22.7 trillion in backlogs. We are auditing it, and it is like when I am ready to pay a loan from a bank and I ask for an audit before finding the agreed sum to pay.
“But apart from that, how do you get your Ways and Means down? We have to get revenues up and expenditure reduced as much as possible.”
Ways and Means Advances is a loan facility used by the central bank to finance the government in periods of temporary budget shortfalls subject to limits imposed by law.
Edun added that a bill will soon be presented to the National Assembly that will authorise the removal of all taxes and levies that constitute nuisance from the country’s tax system as a measure to wean itself from future Ways and Means indebtedness.
He said: “The committee will ensure that revenue that is due to the government from the corporate sector is efficiently brought in. We have a fiscal policy and tax reform committee that is going to revolutionise and is going to announce a very brief, very emergency intervention bill.
“It’s going to rationalise access, take away the nuisance value away from the public sector. It’s going to reduce the tax bill you have to a handful of items. All the levies and fees, particularly the ones that are directly controlled by the federal sector, will all be removed.”
According to him, there’s a prediction that in the next few years, there’ll be a doubling of tax revenue relative to GDP as the government is doing everything it can to ensure that there are no leakages of revenue.
The minister said: “But then on the expensiveness side, we are also implementing a robust expenditure framework that removes the leakages, removes the double penalty, removes the payments to people who are not due it, whether it is from duty -warrant or tax incentives, or even expenditure of government on contracts, supplies, etc.
“So that both on the revenue on the debt side, there’s a wholesale change coming and is being implemented and the results are already coming through. And that is the way that the government will now get itself weaned off the ways and means.”
MOFI moves to unlock Nigeria’s huge assets
Edun also said that beyond the CBN’s effort, the federal government is making efforts to stabilise the foreign exchange market and save the already weakened naira.
He said: “And as they continue to work, beyond CBN’s efforts, the federal government also can and is doing all it can to increase the supply of foreign exchange. So for example, in seeing how central banks have targeted the way interest rate would go, when they said that it saw average inflation of 24.5 percent during the coming year.
“And the ministry of finance responded by debt management by issuing Treasury bills of various tenures such that at the end of the day, the interest rate went up above 23 percent and that automatically improved the supply of dollars into the Nigerian economy. That is how fiscal and monetary are working together for the good of the country.”
Armstrong Takang, CEO of MOFI, announced that the corporation will be launching a N100 billion project preparation fund to go to bankable projects.
He said: “Bankable projects require funding. You cannot create a type that bankable projects without financing.
“We are going to have a fund. We’re going to symbolise our partnership model by signing a collaboration agreement between MOFI, the Ministry of Agriculture and Food Security, and the African Development Bank, on collaborating for the strategic and industrial processing program.”
He added that if the country had managed its assets differently, the issue of foreign exchange would have been addressed because corporate entities would have got credit ratings to allow them access finances in the international market at a preferential rate.
