Delay in budget passage will have impact on economy, says Adeosun

Minister of Finance, Mrs Kemi Adeosun, said the delay in passage of the 2018 Budget would have some impact on the economy and cause some adjustments in implementation.
She said this during a news conference on Friday in Abuja, adding that the impact was because markets change and the cost of money in the market changes too.
Adeosun, however, said that the Federal Government would try to mitigate the effects of the delay.
“Honestly, we may need to realign some of the priorities now because what we thought we would be doing in January is now different from what we are going to do.
“So, we are going to have to look very closely to see where we would realign and re-prioritise, but we will carry on because most of the capital projects are multiyear projects so we will just continue.
“We are going to try and mitigate that impact as much as possible and focus on completing projects.’’
The minister said the fact that the 2017 budget cycle began late in the year had helped a great deal.
“What has helped us is the fact that the budget was passed late last year, and what we did was we just carried on with those projects, we will close this year’s budget with capital expenses in excess of N1.5 trillion which is higher than last year.
“Many of these projects are multiyear projects, so hopefully, there will not be too much disruptions.’’
Adeosun said that the financial systems were not closed on Dec. 31, 2017 to allow for projects implementation to continue.
She, however, said she was optimistic that the 2018 budget would be passed soon.
On tax, she said the Federal Inland Revenue Service (FIRS), and other tax authorities were doing a lot on enforcement of payment.
She said that the Voluntary Assets and Income Declaration Scheme (VAIDS), had helped in increasing the number of taxpayers captured in the tax base of the nation.
She said that the Federal Government recovered N13.8 billion from taxes through whistle blowers who gave useful tips about companies that deliberately underpaid their taxes.
“That is different for us because most of the whistle blowing in the past have been about stolen money, but with the extension of VAIDS and our general narrative about tax, we are getting far more tips on tax evasion.’’
She added that the 14 whistleblowers would be paid N439, 276 million in May.
According to her, cases are being prepared for prosecution for companies and individuals who refused to use the VAIDS window to remit their taxes once it closes on June 30.
Adeosun said that the Federal Government also sent out teams to visit some of its foreign missions to verify assets, adding that more than 108 landed properties were identified in various countries.
She said the properties do not necessarily belong to some of its foreign missions but that some of its agencies had some unrecorded properties abroad.
“Some have been abandoned and some are even in the process of being sold off but we have been able to stop them and we are going to revise procedures in that regard,’’ she said.
The minister also commented on the recent stalemate in revenue generation between the Federation Accounts Allocation Committee (FAAC) and the Nigerian National Petroleum Corporation (NNPC).
She said that it was not healthy for the process as it showed the level of scrutiny by all parties concerned to ensure that the nation got the right revenue figures.
Adeosun also said the Federal Government would not allow revenue leakages anymore, adding that it was working to ensure that those leakages were blocked.
“We should not be too alarmed when there is a stalemate because it is all in the public interest to make sure that the monies that we are expecting into the federation account come in and we account for them properly.’’
On the issue of Nigeria’s debt profile, Adeosun said there was no cause for alarm as the nation’s debt to Gross Domestic Product (GDP) ratio was 20 per cent and one of the lowest in sub-Saharan Africa.
“Where we do have a challenge is debt service to revenue which is because the interest cost was quite high and this is a function of two things.
“One is that most of the debt was short term so you are paying interest and compounding it.
“However, we have been refinancing treasury bills in the domestic market and replacing them with long term debt in the international market and that is reducing our cost of borrowing.
“This time last year, Nigerian government was borrowing at an average cost of about 18 per cent but now it is 13 per cent. So we are working very hard on the debt service cost and of course revenue.’’
She said that presently, borrowings are tied to capital projects which would still be useful for many years to come.
“So, there is no cause for alarm as far as Nigeria is concerned. It is a well managed, very conservative debt strategy and we continue to be very focused on concessional borrowing.’’