—- Nigeria needs N34 trillion for infrastructure in the next four years
—-Domestic debt now $37 billion
—-Monthly internally generated revenue N60bn
—-Multi-year budgeting in the works
By Omoh Gabriel
Former ministry of Finance and reappointed minister yet to be assigned Dr Olusegun Aganga weekend disclosed that about 43,000 ghost workers were taking pay in Ministries, Department and Agencies of the federal government before he took office.
He said as a result of the biometric audit of 36 MDAs the federal ministry of Finance fished out the names of former employees of the federal government who were either retired or dead but were still in the government pay roll thus adding to the cost of governance in the country.
He said the number of employees taking monthly pay in the said MDAs was 112, 000 but after the biometrics it dropped by 43, 000 to 69,000 employees. Although he did not give details of the amount saved, he said the biometric system introduced by the ministry had within one year deepened the payment system and that so far it has been done for 36 ministry, department and Agencies of the federal government.
Aganga, who spoke to journalists in Lagos on Saturday, shortly after receiving the Young Men’s Christian Association award for exemplary public office life, said this was achieved through the implementation of the Integrated Personnel and Payroll Information System. He said this just as he called for a national re-orientation programme to restore lost values and tackle corruption. He said the country had to trim its personnel cost, which formed a major part of the unnecessary costs distorting the country’s expenditure pattern. Aganga noted that personnel cost increased from N850billion to N1.3trillion between 2009 and 2010, adding that with the implementation of the IPPIS in 36 ministries, departments and agencies, it was discovered that 43,000 people should not have been on the government’s payroll. He said the implementation of the IPPIS in the 36 MDAs had been divided into three phases and that the first phase, which covered seven MDAs, saved the country over N12billion. The savings represent the difference between releases to the MDAs based on their nominal roll submissions before enrolment into the IPPIS and the actual salaries paid through IPPIS after the exercise.
According to the minister, whose new portfolio has not been officially announced, the second and third phases will cover 11 and 18 MDAs respectively. He said, “We had to take action to reduce the overhead cost, that was why we introduced the IPPIS, where you take workers’ ‘biodata’, they thumbprint and salaries are paid directly through bank accounts. We have done that in 36 MDAs, but the exercise is ongoing. When it is completed, we expect to see considerable savings.”
He added that in the 2011 budget, the government also reduced the level of overhead for both the Executive and the legislature by 30 per cent and the level of borrowing from about N1.3trillion to N850billion.
Aganga, however, said that, going forward, the nation would need to deepen the fiscal consolidation exercise, adding that the 2011 budget signaled the beginning of the fiscal consolidation process. He said “As part of the Federal Government’s effort to reduce the level of recurrent expenditure, in particular, personnel cost, which represents more than 50 per cent of recurrent expenditure, we have deepened the implementation of the IPPIS programme in the last one year and have identified 43,000 names, which should not have been on the payroll. This will lead to considerable savings.”
Allaying fears that the government was not active in the last one year he said that the government was busy putting structures on ground to ensure that the now talked about transformation has a foundation. He said that within one year, he had grown federal government internally generated revenue from N28 billion a month to N60 billion. This he said was made possible through plugging the leaks in revenue generation.
He said that Nigerians must understand that last year was an election year when most investors and the international community took a wait and see attitude toward Nigeria. He said that the introduction of the sovereign wealth fund has demonstrated to the global financial market that Nigeria was now ready for reforms.
According to him the bill setting up the fund was passed very quickly and many institutional investors saw it as a very positive move. This he said is so because the proceeds of the excess crude oil were utilized in a manner that did not show to the international community that the process was transparent. He said with the wealth fund which has savings, stabilization and investment arm will ensure that the nation has access to international capital for the much needed development.
He said that in the next four years Nigeria needs N34 trillion to invest in infrastructure. He stated that the government is expected to finance infrastructure to the tune of N10 trillion, state governments nine trillion, private sector N15 trillion.
He said that the federal government faces four main challenges in the budgetary process that it is trying to address. He said that the first is the fact that the size of the federal budget is large and unsustainable. He said that the recurrent component of the budget is unsustainable because it in actual fact exceeded federal government retained revenue. This he said has resulted in the government borrowing for capital budget.
Dr Aganga further said that in the last ten years the government had been running a deficit budget and borrowing heavily from the domestic money market thus denying the private sector access to funding. He said that at the moment the federal government borrowing from the domestic market has risen to about $37 billion while external debt is just about N5.2 billion.
He said the federal government is working very hard to address all of these issues in the budget as it will soon present a revenue bill to the national assembly to ensure that MDAs remit 80 per cent of their operating surpluses to the federation account which many are not doing at the moment. He said that the ministry of Finance had ordered a forensic audit of NNPC account and that the audit report was ready for implementation.
He said that the federal government has evolved performance base budgetary system in which MDAs have to show proof of proper utilization of funds released to them before asking for more funding. He said that project monitors are now inspecting various federal projects across the country.
He said that government will soon introduce the multi year budgetary system in which projects spending will be spread over several years in the construction of such projects. This he said will reduce the pressure on available resources. He disclosed that there are over 700 uncompleted projects handled by various MDAs blaming the problem on lack of continuity in policy .