The Minister of Finance, Kemi Adeosun has said that the N165 billion civil service monthly wage bill is over-bloated and can no longer be sustained by the federal government.
The minister spoke on Thursday in Lagos at a meeting with the Newspaper Proprietors’ Association of Nigeria (NPAN) attended by her counterparts in the Ministry of Information, Alhaji Lai Mohammed, Ministry of Environment, Ms. Amina Mohammed, and Ministry of Agriculture, Chief Audu Ogbeh.
Adeosun, who provided details on the economic reform agenda of the federal government, said the N165 billion being paid to federal civil servants monthly represented 40 per cent of the total spending of government, reported the News Agency of Nigeria (NAN).
She said the figure was too high and the government was pursuing aggressive measures to detect and prosecute ghost workers and other saboteurs in the system.
“We spend N165 billion every month on salaries and when I came in there was no checking.
“Now, we have created a unit assigned with the sole responsibility of checking the salaries and catching those behind the over-bloated salaries,” she said.
Adeosun said the Integrated Payroll and Personnel Information System (IPPIS) introduced by the previous administration was defective and sabotaged by the elements benefitting from the salary fraud.
She said many federal government establishments including the police were yet to be captured in the system.
According to her, it was shocking that the Nigerian Railway Corporation (NRC), which is not fully functional, still had 10,000 workers in its payroll serviced by government.
The minister assured her audience that government would correct the anomalies in the payroll system and weed out all ghost workers in the civil service.
Adeosun said that the fiscal focus of the administration was to ensure economic growth that would be measured on job creation and productive sectors growth.
“The economy is not measured by how many private jets we have but how many jobs we create. People must be productive for the economy to grow.
“We have been a consumer economy, but we want to be productive and stop buying everything from abroad.
“We have been borrowing to pay salaries for years and that has to stop because it is not sustainable.
“Last year, we spent N64 billion on travelling and only N19 billion on roads. Travelling does not grow the economy and this must also stop,’’ she said.
The minister said the compound Gross Domestic Product (GDP) of the country had been negative in the last 10 years and the administration was working to correct this.
She added that the administration would be the most disciplined government the country has ever had in terms of fiscal accountability and responsibility.
Also speaking at the meeting, Ogbeh said government would reposition the agricultural sector to become the mainstay of the economy.
“The ministry will give policy direction and coordination to make farming attractive and for people to practice it as a business.
“Government will put a policy in place to recover the $22 billion which is floating out of the country’s resources to sustain farms in other countries back to our villages.
“Government will also ensure that banks review the double-digit interest rate on loans to farmers and other productive sectors.
“The change promised may appear to be slow, but it is actually taking place. In this year, we have harvested millions of tonnes of rice,” he said.
The Minister of Environment, in her contribution, said government would complete the clean up of Ogoniland in the next one year and ensure the degraded land is revived for productive purposes.
She said the Great Green Wall project targeted at planting trees to control desert encroachment would also be given priority by the administration.
In another forum, Adeosun also faulted the position of her predecessor, Dr. Ngozi Okonjo-Iweala, who had blamed the inability of the immediate past administration to save for a rainy day on the state governors.
The governors, the former finance minister said, had insisted that all revenues accruing to the federation must be shared, effectively eroding the fiscal buffer that would have shielded the economy from external shocks.
But countering this position, Adeosun pointed out that 52 per cent of the Federation Account allocation goes to the federal government, so if the federal government under former President Goodluck Jonathan had the will to save, it would have saved its own portion of its allocation.
Adeosun, said this while speaking on Channels Television’s current affairs programme, Sunrise Daily, yesterday.
She pointed out that it was unfair for the immediate past administration to always blame the states.
Adeosun, who at the time was the Commissioner for Finance in Ogun State, said: “Let me explain the structure of states and the federal government. Fifty-two per cent of the money actually comes to the federal government. So even if the state governments said they wanted to spend theirs, the federal government too didn’t save its portion… the federal government was not saving.
“In fact, the federal government was borrowing even to pay salaries. And that is where the disconnect comes in. So I think it is largely unfair for the federal government to say you (the states) were the ones that made me to spend – I can spend mine, but I can’t force you to spend yours.
“But the federal government didn’t save its share either. So, collectively, I don’t think we should be trading blame. I think what we should be doing now is to look at the lessons we have learnt.
“The federal, state and local governments must have savings. Even if we don’t have savings, we can have investments.
“Look at Saudi Arabia, it has about $700 billion of reserves unspent, and we have about $28 billion. Oil goes, oil comes but they still have something to show for it.”
She however said the drop in crude oil prices presented a good opportunity to reset the economy, adding that the opportunity for diversification of the economy created by the crisis should not be wasted.
She also spoke on the measures adopted by the federal government to assist state governments that are unable to meet their various statutory obligations.
“Everybody is now extremely sober. Every Nigerian is sober. All the governors have realised that oil prices can plummet from $110 per barrel to $28 per barrel over such a short period of time and we could be so exposed that we cannot even pay salaries.
“So there is a sobriety that has set in and I don’t think we should waste. We are working very hard with the states and we said to them, first of all we are not bailing them out.
“We have said we would have a fiscal restructuring plan. Whatever we are doing is conditional, they must go and drive efficiency, which means the states must do biometric capture of their staff, know those that are paid, put in efficiency units just as we have done at the federal government level where we are seeing a level of savings that it can generate.
We told them they must sign up to a restructuring plan and if they don’t want a restructuring plan, then we would not help them in any way,” Adeosun explained.
Responding to a question on the Sovereign Wealth Fund (SWF), she said the fund was doing well and making the necessary investments.
However, the finance minister said the federal government wants to “reposition it and have it focused in line with government’s objectives which is investments in infrastructure”, observing that the government realised that even with 30 per cent of the budget allotted to capital spending, the country’s infrastructure gap is so wide that government alone could not bridge it.
“So what we are hoping is that the sovereign wealth fund now becomes a channel to attract further private money particularly from investment funds abroad. So we really want to focus on infrastructure – toll roads, bridges, power plants, things that would help the economy grow,” she said.
On efforts to eradicate ghost workers in the ministries, departments and agencies (MDAs), Adeosun commended the Economic and Financial Crimes Commission (EFCC) for the job done so far in this regard.
Adeosun disclosed that the EFCC had set up a unit that deals with payroll fraud, saying it would soon start taking those involved in the scam to court.
Furthermore, she revealed that the government had discovered a syndicate involved in the fraud.
“There is actually an organised network and I don’t want to speak too much about how they were doing it so some people might now think that it is a good business to go into. But it is a worrying trend and we spent N165 billion on salaries and pensions.
“When I came into office, there was no audit, there were no controls. Once you get on that payroll, they pay you forever. Even dead people were still being paid.
“So we have now put in what we call a continuous audit team and they do nothing else, but audit that payroll. And that is how we are still uncovering and there are still more,” she said.
The finance minister also disagreed with a recent comment by a former Minister of Education, Mrs. Oby Ezekwesili, that President Muhammadu Buhari had introduced “archaic and opaque” economic policies which are hurting the poor.
Ezekwesili, while speaking at The Platform, a public policy forum in Abuja last Saturday, had said that the president was using the same methods of a command and control economy he had used when he was a military head of state.
But Adeosun said: “I don’t agree that we have a command and control economy. What we are trying to have is a planned economy. There must be some planning. When we were growing, they used to say Nigeria has the highest number of private jets and we would all clap for that.
“But we also have the most terrible unemployment rate. So what we are trying to do is to plan for the future and have an economy that meets the needs of Nigerians.
“We are a huge economy, so we shouldn’t have an economy where growth is not inclusive and allows few people to prosper at the expense of others. So I don’t think we have a command and control economy.”
Continuing, the finance minister pointed out that there is a big misunderstanding about the Treasury Single Account (TSA) and how it operates.
“What is the TSA? It is a huge bank account. So what happened was that all the agencies of government closed their accounts in various banks and moved them into a single account at the Central Bank of Nigeria (CBN).
“Now, at every point in time, the balance on that account is quoted, it can be N3 trillion today, maybe tomorrow it is something else. But that money is everybody’s money.
“The Nigerian National Petroluem Corporation (NNPC), Federation Account Allocation Committee (FAAC) money is in there, and so not all of that money is available for spending.
“You can’t just go and take NNPC’s money to build a bridge. Some of that money had already been earmarked for certain things and some already have liabilities penciled against them.
“What we are doing is sitting down with the agencies because each individual agency has a sub-account, and saying out of their balance in the TSA, how much of it is part of the surplus that should have gone to the federal government.
“That is, how much of it is a free cash float that can go into the budget. So it is not like everything in the TSA can be spent,” she explained.
Adeosun, nonetheless, stressed that the TSA has given the federal government better control and better visibility of government’s revenue.
She also reiterated that the recently introduced Efficiency Unit by her ministry would help stop wastage and ensure efficiency in government spending.
According to her, ministerial debit cards would also be introduced by her ministry in the next few days in order to rein in and track what MDAs spend and also support the cashless policy.