Opinions

Ministry of Finance: A revolutionary at work

IN history, very few revolutionaries make noise about their attempts to change the status quo. In most instances, they silently burn the midnight candles to ensure a departure from what the world was used to. Take for instance the strides of Nikolaus Copernicus, a Renaissance and Reformation-era mathematician and astronomer. He was credited with formulating a model of the universe which revolutionarily placed the Sun rather than the Earth at the centre of the universe. Before him, Aristarchus of Samos had held sway through his formulation of a similar model some eighteen centuries earlier. Copernicus’ publication, which he entitled On the Revolutions of the Celestial Spheres, shortly before he died in 1543, became a major event in the history of science. Indeed, it triggered what is today known as the Copernican Revolution in science.

If you leaf through the achievements of Mrs. Kemi Adeosun, the Nigerian Finance Minister, in a ministry whose lingering refrain was financial filth, abetting of a systemic corruption, which had vicariously succeeded in encouraging the financial problems that Nigeria today finds herself in, you would agree that, in some way, Adeosun is leading a silent revolution. Apparently taking a cue from her boss, President Muhammadu Buhari’s sworn declaration to make the country a hot oven for fraudulent countrymen, the minister’s abiding credo seems to be that once corruption and corruptive tendencies are eliminated from the Nigerian financial system, a great proportion of the Nigerian problem would have been removed. So, she began her own silent war in the financial system. Her first war port of call was from her ministry. She established the Efficiency Unit (E-Unit) on November 25, 2015, to ensure that all government expenditures represent the best possible value for money.

It must be stated that before she mounted the saddle, available records showed that Nigeria’s recurrent expenditure completely dwarfed capital expenditure by a ratio of 84/16. The areas of this unfavourable slant were in the non-wage related overhead expenditure such as travel costs, entertainment, events, printing, IT consumables, and stationeries, among others. The Unit thus went to work to review all government overhead expenditures. Her target was to reduce wastage, promote efficiency and guarantee quantifiable savings for Nigeria. The specific brief of the Efficiency Unit was to monitor Ministries, Departments and Agencies (MDAs) of government so as to identify and eliminate wasteful spending, duplication and other inefficiencies, as well as leakages which had drained the country dry. The result is that, today, at least N15 billion is saved by government annually. Aside that, today, there is an increased transparency in the procurement process among the MDAs.

Aside the above, the minister has also ensured a unique regime of cost cutting that is alien to the ministry. Through the E-Unit, the ministry under Mrs. Adeosun has influenced the issuance of circulars to all MDAs by the Secretary to the Government of the Federation, the Head of the Civil Service of the Federation and the National Salaries, Wages and Income Commission which today has harvested a better management of certain recurring processes and activities that have to do with travels, sitting allowances, souvenirs. The result is that her office has saved N11 billion for Nigeria through the promotion of transparency in payments as a governmental philosophy. The ministry also recommended to the usage of the Accountant-General of the Federation office the usage of debit cards by government officials for payments and in a resounding way, this method has been helping to plug loopholes and improve accountability in spending. Of great importance in the revolutionary achievements of the E-Unit is its improvement of the subsisting procurement process to generate savings by reducing the administrative costs associated with the procurement process.

Perhaps the most revolutionary of Mrs. Adeosun’s strides was the establishment of the Presidential Initiative on Continuous Audit (PICA), a critical initiative in governmental audit. She had noted: “Our commitment to a lean and cost effective government remains a priority and the initiatives we are introducing will signal a fundamental change in how Government spends public revenue.” Since then, she has successfully investigated and recovered into the coffers of government salaries paid to ex-Diplomats and thumbed down infractions by the staff of Pension Transitional Arrangement Directorate (PTAD), verified subsidy claims, personnel costs to Ministries, Departments and Agencies (MDAs), as well as attacked the ghost workers syndrome.

For instance, the Audit Team investigated some staff of the Pension Transitional Arrangement Directorate (PTAD), five top management team members were disciplined, including a former Director-General. It also discovered that 196 Foreign Service officers were receiving salaries after exiting the Federal Service and that the sum of N192 million was collected by them. The Economic and Financial Crimes Commission (EFCC) was called in which recovered this amount. Also, PICA set up an inter-agency committee to verify claims made in the outstanding debts owed members of the Petroleum Products Marketers Association of Nigeria (DAPMA) and in the process, made remarkable savings for the Federal Government. It also engaged in intensive and diligent forensic audit of Integrated Payroll and Personnel Information (IPPIS) and nominal roll which ensured a monthly reduction of personnel cost (salaries) from N151 billion in February 2016 to N138 billion by August, 2016 and reduction in pension cost from N15 billion to N14.5 billion monthly.

Elimination of ghost workers is also a major revolutionary achievement of the Honourable Minister. While undergoing the audit, PICA had to stop salaries of over 800 ex-employees of government still drawing salaries and removed over 50,000 ghost workers from the Federal Payroll. Affected employees who had already collected ₦34 million were handed over to the EFCC and unprecedentedly in Nigerian history, government is prosecuting nine principal suspected payroll fraudsters who allegedly created fictitious names and accounts.

While investigating a 2016 claim of shortfalls in personnel cost from MDAs across the country, PICA saved into the Nigerian coffers the sum of N30,280,863,588.72 but further discovered that the shortfall was due to personnel cost shortage in 2016 Appropriation, like the recruitment of about 10,000 soldiers based on presidential directive and in the Defence Mission, due to foreign exchange differentials.

Perhaps the most consequential yet controversial at the moment is the development of the whistle blower policy by the Adeosun ministry. The philosophy behind it is to empower citizens to report public corruption. According to Adeosun, over 2,500 reports have been made through various reporting channels as at July 2017, with 365 being actionable tips. Revelations by whistleblowers are expected on issues of contract inflation, ghost workers, illegal recruitment and misappropriation of funds, illegal sale of government assets, diversion of revenues and violation of Treasury Single Account (TSA) regulations. The whistleblowers are paid a commission of between 2.5 per cent and five per cent of the amount recovered as an incentive, with the sum of N325 million having been paid already. Indeed, its impact has exceeded government’s expectations as this tighter rein has made it to invest US$500 million in country’s Sovereign Wealth Fund during the recession. The controversy recently generated by multiple whistleblower claimants could however be a teething problem from a novel and noble cause.

During this period, Adeosun’s ministry received kudos from the various workers’ unions for clearing inherited arrears of pension benefits of 2014, 2015 and 2016. In April this year, it released N41.5 billion to the National Pension Commission for onward payment to retirees, being their accrued pension benefits. The sum of N12.5 billion outstanding for January, February and March 2017 was also settled, bringing the tally to over N54 billion. Also, government’s crave to grow Micro, Small and Medium Enterprises (MSMEs) made it to reach an agreement with the IMF/World Bank to release $1.3 billion for the take-off of the Development Bank of Nigeria (DBN) and on March 30, 2017, the Ministry announced the constitution of its board and management.

Lastly, the ministry embarked on a Voluntary Assets and Income Declaration Scheme, (VAIDS) a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods. VAIDS is a revolutionary programme that provides tax defaulters a nine-month opportunity to voluntarily and truthfully declare previously untaxed assets and incomes. It has yielded over $50 million in revenue between June 29, 2017 when it was launched and October 31, 2017. Two foreign companies have also agreed to pay $110 million in regularizing their tax status. About $1 billion additional revenue is being targeted from the scheme. Already, the Federal Government has recruited and trained 2,190 Community Tax Liaison Officers (CTLOs) under the Scheme. Out of the 2,190 CTLOs, 1,710 officers have been deployed to 33 States to raise awareness about the scheme and taxation in general.

With all the above and many more, the revolutionary activities of the Ministry of Finance under Mrs. Kemi Adeosun is changing the Nigerian financial story. She even says that she has just begun. It is hoped that at the end of her service, like it is done to all revolutionaries, society would reserve a place of pride for this silent Copernicus.