$20bn Idle In Few Customers’ Domiciliary Accounts – CBN

The Central Bank of Nigeria (CBN) yesterday said about $20 billion is currently lying idle in the domiciliary accounts of some individuals.

The CBN made the disclosure at an interactive session organised by the Joint National Assembly Committee on Appropriation with government officials.

CBN deputy governor, Financial System and Surveillance, Dr Joseph Nnanna, who blamed the decline in the value of the naira on the actions of few individuals in the country, said by the time the 2016 budget is passed, those people involved will have their fingers burnt.

LEADERSHIP Friday reports that Nigeria’s total external reserves stand at only $27.82 billion, as at March 2, 2016,less than $8 billion higher than the amount lying idle in these individuals’ personal accounts.

Foreign exchange reserves in Nigeria decreased to $27.800 billion in February 2016 from $28.200 billion in January of 2016, having declined from an all-time high of $62.081 billion in September of 2008.

According to Nnanna: “Naira problem is our own making. Some individuals are speculating on the dollars to the detriment of naira. Why should we have individuals that have $20 billion in different domiciliary accounts idle?

“Volatility in exchange will not continue after the passage of 2016 budget.

“Those who speculate on naira will have their fingers burnt by that time because we are going to embark on aggressive liquidity mop-up to make the naira stronger.”

In his remarks, Senator Danjuma Goje, who chaired the session, insisted that the passage of the 2016 budget will not exceed March 17 as promised.

Goje also said the implementation of the N500 billion intervention fund contained in the 2016 budget proposal would not be feasible since there were no clear implementation strategies.

He added that though explanations were given about the implementation strategy, they were not satisfactory.

He said: “There is no detailed, clear-cut structure laid down for implementation of this project because what we have in this budget is N300 billion Recurrent and N200 billion Capital.

“We had to push hard yesterday to get some details, which are not convincing.

“For instance, the explanation we got is that N5,000 will be given to one million Nigerians. Who would choose the one million people? What structures do you have in place to make sure that you choose the right people?

“You want to give money – N5,000 – to about one million market women or thereabout and, in my place, we do not have many market women; and how would you choose the market women to represent all interests?

“We have not gotten clear explanations to these numerous issues surrounding the implementation of this money. Even the afternoon school feeding contained in the budget is not feasible because some students study under non-conducive environment. Will feeding them enhance their learning?”

Goje said while the National Assembly was in support of the programme, implementing it in 2016 might not be feasible.

He suggested that the money be added to the budgetary allocation for sectors like power, transport and health, while those responsible would map out better strategy against 2017.

He said: “We are all happy with the programme and I am a party man to the core, but what needs to be done needs to be done very well. I think there is a need to do a greater work on implementation; otherwise this money will go down the drain.

“We support this programme. We want Mr President to succeed. We want our party to succeed. We want to continue to win this election but we want the programme to be successful.

“So, Mr Minister, we want you to come up with workable implementation strategy; otherwise there are so many things that require attention in this country. We would rather use this money to solve our problems.

“Use this year to do very sound groundwork for implementation so that the programmme can take off next year.”

TSA Funds Hit N2.9trn – Finance Minister

Besides, the Minister of Finance, Mrs Kemi Adeosun yesterday disclosed that accruals to the Treasury Single Account had accumulated to N2.9trillion, from N2.2trillion in February.

The minister who made the disclosure while fielding questions along with the Minister of Budget and National Planning, Mr Udoma Udo Udoma, from the National Assembly Joint Committee on Appropriations, however said the total of the sum may not be used to fund the proposed N6.08trillion budget because some part of it will be go as operating cost for key revenue-generating agencies of the federal government.

“The total volume of the TSA is now N2.9trillion, but as the money comes, we cannot just mop it up to finance the 2016 budget. Some of the money coming from the NNPC and others into the account, for example, may be used to fund some of its projects”, she said.

Earlier the minister also told the lawmakers that “the oil price decline is a blessing in disguise”, as, according to her, it will spur creativity in governance and allow government to focus on harnessing resources from non-oil sectors.

On his part, Udoma disclosed to the Senate and House of Representatives members of the Joint Appropriations Committee that the Executive’s intention was to allow private sector funding for the mineral and agricultural sectors. The budget proposal for the Ministry Solid Minerals is N9billion, while that of the Agriculture Ministry is N43billion.

“Government intends to provide enabling environment for the agriculture and mineral sectors to thrive. Solid minerals need brain work, not billions of naira, and so for the agricultural sector, so government wants the private sector to drive these areas”, he said.

Udoma also told the committee that government had already reduced the budget proposal for salaries, travels and other non-capital spending by 9%, and may reduce more, adding that it wants to reach out to airlines to cut the cost of flights for public officials.

“This is the most difficult budget that we have had to deal with for a long time,” he said, just as he acknowledged the prerogative of the National Assembly in deciding how the final budget would look like.

Opposition Mounts Against Senate’s Moves To Terminate TSA

Crisis is gradually brewing in the Senate over its resolution which, among other recommendations, directed the Central Bank of Nigeria (CBN) to terminate all contracts relating to the Treasury Single Account (TSA).

It was gathered yesterday that Senate President Bukola Saraki has been receiving series of petitions accusing the Red Chamber of trying to frustrate the TSA policy.

One of such petitions obtained by LEADERSHIP Friday was that sent by the Coalition Against Corrupt Leaders (CACOL) asking the Senate to rescind its position without delay, even as it warned that, if implemented as adopted, the recommendations would be a deadly attack on the federal government’s TSA project.

The petition signed by the executive chairman of CACOL, Debo Adeniran, questioned the motive behind the resolution of Senate, saying it amounted to nothing but an attempt to kill the TSA and reverse all the gains recorded within the short time of its implementation.

The petitioner stated: “Could it then be safe to conclude that there is a move within the Senate to use the termination of the contract, which will naturally frustrate the TSA project, still at its infancy, as an excuse to exempt the Senate from compliance with TSA to which President MuhammaduBuhari has consistently pledged commitment?

“Did the Senate consider possible implications of forcing the CBN to immediately terminate the contract? What measures, if any, has the Senate proposed to manage the consequences on the economy of immediate disruption of the already settled nationwide TSA payment and revenue collection processes?”

CACOL wondered how the about 900 MDAs already operating on TSA would continue their payment and revenue generation operations the next morning after the CBN had been forced to cancel the Remita contract.

It further queried: “What should happen to the investment in infrastructure, processes and people already put in place on account of the FGN TSA by the 18 commercial banks, over 400 micro-finance banks and other players in the electronic financial ecosystem?

“How are the millions of Nigerians who now pay for critical health services and students who pay tuition and other fees through TSA supposed to undertake such transactions the morning after the CBN would have been railroaded to cancel the Remita contract?

It is perplexing, to say the least, why contract termination is the one and only call of the Senate in a matter its own committee firmly established as being one of mainly commercial terms as it expressly stated in Section 6.1.4 of its report.

“What is rather in contention is the cost and terms of engagement of vendors whose services have been procured for the implementation of TSA’s e-collections?”

CACOL also wondered why the Senate’s recommendation is not a review of the contractual commercial terms rather than an outright termination of the TSA contract, “considering that contractual agreements between two or more entities typically become subject of termination mainly due to under-performance.”