Jide Peters
Olawale Edun, the minister tasked with revitalizing Nigeria’s economy has continued to prioritize reforms that are pro-people as he grapples with the global economic uncertainties and challenges. The super minister has continued to lay the groundwork for a ‘renewed hope’ agenda of Mr. President.
To fully realize the transformative vision and deliver on the campaign promises of the ‘Renewed Hope’ administration, it is crucial for the government to focus on key areas ranging from reform of fiscal and tax policies, which are aimed at improving fiscal governance, revenue transformation and economic growth.
Nigeria’s President Bola Tinubu appointed the investment banker as minister of finance and coordinating minister of the economy last year, leaving him with a herculean task of navigating a battered economy to a safe zone.
Between 1999 and 2007, when Tinubu was the governor of Lagos state, Edun was part of the team that successfully reinvigorated the Lagos economy that had suffered some terrible blows from the military administration. As the commissioner for finance then, Edun, who has a background in economics, international finance, merchant banking and corporate finance brought his Midas touch and the Lagos economy was transformed.
Additionally, he began working with the World Bank/IFC in Washington, DC, under the esteemed Young Professionals program. He worked on economic and financial plans at the World Bank for a number of nations in the Far East, Latin America, and the Caribbean.
Edun has been Chapel Hill Denham Group’s chairman since March 2008. Upon his return to Nigeria in 1989, he co-founded and held the position of Executive Director of Stanbic IBTC Plc (previously Investment Banking & Trust Company Limited). He founded Denham Management Limited in 1994 which later merged with Chapel Hill Advisory Partners to become Chapel Hill Denham Group, a leading independent investment banking firm. At the time of the merger in 2008, the company had shareholders’ funds in excess of N9bn ($12m).
While serving as the commissioner of finance in Lagos, he was credited as being instrumental to a monumental increase in the state’s revenue.
Four things were instrumental in achieving this feat; commitment to technology helped to increase revenue generation and block loopholes, total computerization of the operations of government, reliance on the private sector and private investment to drive the economy, efficient use of the financial markets.
Edun has played a part in the design, implementation of innovative, home-grown technology-driven solutions that increased the resources available to the government, grew the revenue in large quantities, and thereby gave the government the wherewithal to spend on infrastructure, social services, and job creation.
It is in view of all these and his doggedness that he was saddled with the responsibility of championing unprecedented Economic Growth and stability which the nation has witnessed as both Minister of Finance and Coordinating Minister of the economy who has been at the forefront of transformative policies that have strengthened our financial systems , promoted sustainable development, re-engineered the Government expenditure process to achieve full visibility of transactions and fostered a resilient economy.
The key accomplishments of the current Minister of Finance and coordinating Minister of the Economy to date are as follows:
Fiscal and Tax policy Reforms:
- Broad ranging reform of fiscal and tax policies geared towards improved fiscal governance, revenue transformation, and economic growth.
-New national fiscal policy is at the final stages focused on streamlining taxes, increasing collection/compliance efficiency and promoting an efficient incentive framework.
Expenditure Control:
-Re-engineered the government expenditure process to achieve full visibility of transactions.
-Under the 2024 capital budget, payments shall be made directly to contractors, suppliers and other service providers.
-FGN has also enhanced the import duty exemption certificate (IDEC) platform to include monitoring and evaluation.
Revenue Increase:
-Increased revenue with oil production reaching 1.69mbpd area in March 2024 due to improving security.
-Federal Government of Nigeria (FGN) retained revenue from ministries, Departments and Agencies (MDA’s) and federal government owned enterprise has been substantially increased (Q1 2024 was N2.85trillion vs Q1″2023)
-Due to increased tax and customs revenues and an improved assurance that employed technology backed systems to automatically deduct revenue due to FG on a twice daily basis.
-In a historic development. FGN also earns FX income under the new revenue model.
Reduction of Ways and Means Exposure:
-The FGN, via the debt management office (DMO) raised N4.8 trillion from domestic capital markets to repay outstanding obligations to the Central Bank.
-An additional N2.5 trillion is to be repaid from proceeds of further issuance of government securities, bringing the outstanding balance to N2 trillion.
Debt Service without Recourse to Ways and Means:
As part of the commitment to improved fiscal discipline, the government has financed debt service obligations mainly through available cash balances instead of relying on the ways and means account.
-Ministry of Finance has funded foreign debt service and other obligations of FGN without recourse to ways and means of debt.
Support of Monetary Policy:
-Through the issuance of government debt securities by the DMO at higher interest rates that provide better risk-adjusted return to investors, the Ministry of finance has supported monetary policy authorities in attracting FPIs and in stabilizing the exchange rate of Naira.
-Active coordination between the fiscal and monetary authorities to ensure effective transmission of monetary and fiscal policies in line with the economic vision of Mr president.
National Single Window (NSW):
-Launching of the NSW by Mr president. The NSW is an E- Community platform for trade facilitation and imports administration. Once fully implemented, it is expected to generate an annual economic benefit of approximately US$2.7 billion.
Financing of Commencement of Major Infrastructure Projects:
-The Ministry of Finance has provided from internal finances critical initial funding to kick-start major infrastructure projects such as Lagos – Calabar coastal Road.
Infrastructure/ Housing Finance Fund: - MOFI is partnering with government agencies and the private sector to boost investment and to provide 25-year low interest rate mortgages.
-It is anticipated that an estimated N2.00 trillion from institutional investors will be mobilized for infrastructure and housing sectors.
Foreign Direct Investments:
-MOF, under the leadership of Mr president. has actively engaged with a broad range of international investors from the Middle East, Europe and India to showcase the reformed economic policies of the FGN.
-It has anticipated that well advanced discussions with investors from the Middle East would result in definitive investments in the near term.
Protecting the Poor and the Vulnerable:
-MOF has played a critical role in the strengthening of the social protection system – reframing of the process and administration of the direct benefit transfer program.
-Ongoing transfer of up to N75,000 to approximately 15Million households using unique identifiers to improve transparency and limit fraud.
-Approximately 3.2M Beneficiaries have already been funded.
Intervention Funding:
-MOF facilitated the funding of critical special intervention programmes up to N500 Billion
-N100 Billion funding for the procurement of CNG -fueled buses and supporting infrastructure.
-N200 Billion for food production
-N200 Billion for SMEs for production and nano grants for small businesses.
Increased Revenue Generation;
-Nigeria custom service revenues increased by 86.68% to N3.2 trillion in 2023 compared to the previous year. In Q1 2024, the service collected N1.30 trillion, a substantial increase of 122.35% compared to Q1 2023.
-Federal Inland Revenue Service (FIRS) achieved 107.00% of the 2023 revenue target by collecting N12.36 trillion, and Q1′ 2024 revenues of N3.94 trillion, 56% greater than the same period in the prior year.
Increased Revenue Collection:
-The office of the Accountant General of the Federation ‘s collection of revenues from the federal government owned enterprises increased from N2.85 trillion through the automation of the deduction process.
-Mobilization of loan financing.
-Catalyzing capital inflow.
-Greater effectiveness and efficiency through Digitalization which streamlined trade processes and reduced bureaucratic bottleneck through the implementation of efficient clearance procedures and deployment of advanced technology resulting in average clearance time for goods reducing by 300:00%.
Improved Lives and Livelihood:
-FHA’s financing of over 9,150 affordable homes across the 6 geopolitical regions.
-Following the success of its three pilot healthcare facilities, NSIA is developing and operationalizing 23 new modern medical diagnostic centres,2 oncology centres and 7 catheterization laboratories. Construction has commenced for 10 of the facilities which will be operational in 2025.
-NAICOM’s Optimization and deepening of the effectiveness of the Nigerian insurance sector, surpassing Q1′ 2024 targets for number of Nigerians covered and gross premium generated.
-PTAD has enrolled 3,208 legitimate pensioners who had been wrongly removed from the database or never previously been added, improving their economic livelihoods and welfare.
Driving Public Education and Awareness:
-NDIC pursued various public education initiatives aimed at enhancing financial literacy to promote financial inclusion.
-DMO commenced the publication of the quarterly debt bulletin in Q2 2023 in compliance with the world bank’s performance and policy actions for 2024.
-NEXIM has launched the Nigerian Export Academy (NEXA), a digital learning platform to promote capacity building among exporters and raise awareness of Export procedures, documentation and other related issues.
Minister of Finance and Coordinating Minister for the Economy has continued to institute other reform implementation and initiatives such as the Ministry of Finance Incorporated (MOFI) which has played a lead role in implementing the presidential compressed Natural Gas Initiative (PCNG) including the development of appropriate standards , securing tax and duty waivers, launching of pilot conversions centres across each geopolitical zone, and ordering of over 44,000 key assets that is CNG vehicles, tricycles and conversion kits etc. expected to be received within the next month.
The ministry under the minister has developed MOFI Real Estate investment fund which is awaiting presidential approval. An implementation programme starting with a pilot of 25,000 units will be developed as a proof of concept for the delivery of the proposed intervention.
Within the first 1 year of the life of this administration, MOFI set up a special purpose vehicle (SPV) to manage the day-to-day operation of the presidential initiative and office of the Attorney General of Federation monitoring the implementation of Public financial Management Reforms.
Conclusively, the Ministry of Finance led the effective representation of Nigeria’s finance -related interests at various fora including World Bank/ IMF Annual and spring meetings G20, etc. and, where appropriate, took the leadership position in acting as a voice for African interests.
Jide Peters is a communication strategist and public affairs analyst and lives in Abuja.
