N2trn Election Largesse: Only Security Funded, Says Okonjo-Iweala

As the controversy over the alleged N2 trillion naira spent by the Presidency on the 2015 General elections continues to gather steam, Finance Minister, Ngozi Okonjo-Iweala, has distance herself and her ministry.

She however, admitted that it was only the security aspect of the elections that was funded by her ministry as appropriated in the 2015 budget.

A national newspaper had last Sunday reported that a Committee of Five had been set up by President Goodluck Jonathan to conduct an audit of how the N2 trillion was disbursed by party members for the elections, an allegation, which has since been dismissed by the Presidency.

But when prodded in Washington D.C. during a joint press conference on the outcome of the 2015 Spring Meetings of the World Bank/International Monetary Fund (IMF) by the Finance Ministry and Central Bank of Nigeria (CBN) officials late Sunday night, the minister she was not aware of such funds leaving the government coffers.

“I am not aware. Funds for electioneering campaign do not come from the budget. We only provided funds for security during the elections,” she stressed but refused to give further details.

Speaking on the impact of China’s slow growth on Nigeria, the Minister noted that there was a need for the country to closely monitor what goes on in China.

“Definitely, the slow growth in China will affect Nigeria because they are likely to reduce their oil imports from the country. Also, the slow growth may affect lending to Africa,” she said.

China, which is the major importer of crude oil from Nigeria after the U.S. had halted imports, has become Nigeria’s largest trading partner.

She admitted that the fall in commodity prices – especially oil prices, which have fallen by half at the international market, is hurting the oil producing countries but stimulating the global growth, which is projected to add another 1 percent on account of falling oil prices.

Acknowledging that there is multiplicity of taxes, Okonjo-Iweala, who noted that some of these taxes do not generate the anticipated kind of revenue, said that a joint taskforce had been put in place to harmonise and streamline all the taxes in the country.

“In our economy, there are entities charging all manner of fees, from the Federal Government, Ministries, Agencies, to the states and local governments. They are too many and sometimes they don’t raise the kind of revenue that is needed,” she said,

“The key thing is that the taxes that raise revenue for the economy (the VAT for an example) has not been used as a policy. We’ll probably raise far more revenue than all these small taxes that are being raised,” she said.

“At the council of state meeting all the governors agreed to this because they know that it would also boost their revenue.”

Notwithstanding the fact that the economy may be experiencing some hiccups at the moment, the outlook remains robust, she stressed.

“Although Nigeria’s economy may have some short-term difficulties, to get over this year, but the fundamentals are strong, and we’ve been building those fundamentals  for quite some time. We are going to have an economy that is robust and strong. It’s not going to happen without hard work. It needs work and concerted effort to tap into those fundamentals,” she stressed.

On Nigeria’s takeaway from the meetings, the Finance Minster said the message for all oil exporting countries including Nigeria, was to put in place good fiscal reforms, which she said the country had already executed.

“The meeting emphasized the need for us to curtail and raise our expenditure and put in place strong fiscal reforms. With the support of the World Bank, we looking at our projects, implementing structural reforms and stimulating the real sector,” she explained.

CBN Deputy Governor, Economic Policy, Dr. Sarah Omotunde Alade, noted that given the divergent monetary policy measures being pursued by Japan and Europe, which have embarked on quantitative easing and the United States that have winding up theirs, there was need for Nigeria to put in contingency plans and monitor capital inflows.

Besides, she said there was also imperative for the country to design a sound macro-financial goal, enhance supervision and regulation of financial institutions.

The Deputy Governor reiterated that the Nigerian banking sector is sound and safe.

“Today, we have banks that are safe and sound and they are contributing a lot to the growth of the economy. All we need is to build on these, stressed Alade, who represented the apex bank governor, Godwin Emefiele.