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Finance

Commission calls for payment of monitoring, evaluation fund to contractors

By Moses Uwagbale 

The Fiscal Responsibility Commission (FRC) has recommended that the Federal Government reconsiders the payment of Monitoring and Evaluation (M&E) funds to contractors in the interest of the nation’s economy. 

Mr Victor Muruako, the Acting Chairman, FRC made the recommendation at a capacity building programme on the Fiscal Responsibility Act (FRA), 2007 for the Nigerian Railway Corporation (NRC) in Abuja. 

Muruako said the FRC was mandated to verify capital budget projects, which had revealed “cutting corners by government agencies” and sought to cross-check actual job delivery against funds released to agencies. 

“The objective of the Act is to ensure that citizens get value for every money government released for project. 

“A lot has been reviewed through our verification exercise concerning all sorts of diversions including compromise of government consultants to capital projects. 

“We (FRC) are of the view that the habit of factoring in consultancy fees under the charge of the contractor, that system should be reviewed because it brings serious compromise and collusion between consultants and contractors. 

“Those consultants are supposed to work and protect the interest of the project and the government. 

“We therefore call on the government to reconsider payment of Monitoring and Evaluation funds to contractors. This should be checked henceforth.” 

The acting chairman also said that with the existence of anti-graft agencies, the country’s economic state would be strengthened. 

“We have faced some level of resistance by some government agencies who prefer to squander revenue in luxury goods and wasteful expenditures against the need to remit the much needed earnings to Consolidated Revenue Funds of Federal Government. 

“But today, following the interagency relationship with anti-graft agencies and Ministry of Justice, a lot will begin to change as it can never be business as usual because the Federal Government needs all of its funds more now.” 

Muruako said that the commission had worked hard to ensure all agencies in the schedule of FRA 2007 were sensitised enough to understand what was expected of them. 

He explained that the FRC was working toward recommending more agencies in addition to the scheduled ones and was considering agencies to be delisted from the schedule based on certain considerations. 

“The considerations relate to the operations and welfare of the Nigerian people.” 

He reiterated that the FRC had also encouraged states and local governments to adopt the Fiscal Responsibility Law through the provision of technical assistance. 

“By this time next week, we will gather all the states in the southern zone of the country in Port Harcourt to encourage some of the states that have not adopted the law, to see how we can get them to agree. 

“Allowing the states to run without much interest in fiscal responsibility is also affecting our micro economic stability,” he said. 

Muruako commended the NRC for its foresight and facilitation of the capacity building workshop aimed at the clarification of the provisions of the FRA 2007 and the template for calculation of Operating Surplus. 

In her response, Mrs Adunola Osunmakinde, the Deputy Director Finance, NRC urged participants to take advantage of the programme and acquaint themselves with more knowledge of government policies and businesses. 

“We appreciate the rich course content designed for our staff which is very suitable as we undertake the area of railway modernisation.’’ 

Nigeria to implement plans on open government partnership

By Tanko Mohammed 

Nigeria has decided to make provision for financial and human resources to effectively coordinate the implementation of the national action plan to oversee the country’s sub- national Open Government Partnership (OGP) process. 

Mr Clement Agba, the Minister of State for Finance, Budget and National Planning, made this known in Abuja during the 9th National Steering Committee meeting. 

He said that the committee was ensuring the integration of OGP principles and future development plans. 

Agba tasked the technical working group on the development of a new national development plan to ensure the OGP principles were integrated into the actual plan. 

“One major concern I had at my meetings with the donors that have supported the implementation of OGP in country was the lack of government funding for OGP. 

“I wrote to the Minister of Finance, Budget and National planning as well as the D-G, Budget Office to make budgetary provisions for the OGP secretariats. 

“This will help overcome dependence on donor support for the process and ensure effectiveness of the secretariats” he said.  

Stock market records N94.45bn transactions in August

By Chris Ndibe

The total transactions in Nigerian Stock Exchange (NSE) dropped by 8.49

percent to N94.45 billion in August 2020.

This was disclosed in the NSE’s Domestic & Foreign Portfolio Investment Report released on Thursday.

The report showed that total transactions dipped 8.49 per cent when compared with N103.21 billion recorded in July.

The total value of transactions executed by domestic investors during the period under review outperformed transactions executed by foreign investors by 18 per cent.

Consequently, domestic investors accounted for 59 per cent of the total transactions, while foreign investors accounted for 41 per cent.

An analysis of the total transactions revealed that total domestic transactions decreased by 19.16 per cent from N68.62 billion in July to N55.47 billion in August.

It said that total foreign transactions increased by 12.69 per cent to N38.98 billion from N34.59 billion in July.

The report said that institutional investors outperformed retail investors by four per cent, accounting for 52 per cent compared with 48 per cent posted by retail investors.

“A comparison of domestic transactions in the current and prior month revealed that retail transactions decreased by 18.22% from N32.54 billion in July 2020 to N26.61 billion in August 2020.

“The institutional composition of the domestic market decreased by 20.01 per cent from N36.08 billion in July 2020 to N28.86 billion in August 2020,” it said.

Further breakdown of the report indicated that foreign inflow stood at N17.66 billion in August against N13.70 billion in July.

Conversely, foreign outflow rose to N21.32 billion in August from N20.89 billion achieved in July.

Over a 13 year period, domestic transactions decreased by 72.30 per cent from N3.556 trillion in 2007 to N985 billion in 2019 whilst foreign transactions increased by 53.08 per cent from N616 billion to N943 billion over the same period.

“Total domestic transactions accounted for about 51 per cent of the total transactions carried out in 2019,” said the report.

Economist urges Nigeria to improve supply chain in agriculture sector to curb inflation

By Anthony Areh 

An economist, Dr Bright Eregha, has urged the Federal Government to improve the supply chain in the agricultural sector in order to boost food production and curb inflation. 

Eregha, a lecturer in Department of Economics, Pan Atlantic University, Lekki, Lagos State, made the appeal in Lagos on Monday. 

The economist said that improving the various supply chain in the agriculture sector was imperative to attain food security. 

“ The aspect of logistics in the agriculture sector should be better organized in order to better convey farm produce in real time. 

“The roads and transportation sector ought to be improved upon in order to connect the farm areas to the urban market,” said. 

According to him, since the country’s economy is an import driven one, the demand for dollars is triggering rise in inflation rate. 

He said that the prolonged border closure was one of the factors responsible for surge in inflation at the expense of low productivity. 

“ The optimum productive capacity of the country’s economy is inadequate to meet the huge demand of basic essentials caused by the border closure. 

“ The action led to the high cost of commodities, and the health pandemic exacerbated the situations,” the don said. 

Eregha said that flooding in some parts of the country, particularly in the Northern region, which followed torrential rains destroyed many farm produce and thereby spiked inflation rate. 

Nigeria’s inflation has recorded seven months (from February to August) rise to 13.22 per cent in August, according to the National Bureau of Statistics (NBS)’s Consumer Price Index (CPI) Report for August 2020. 

Similarly, in August 2020, food inflation increased by 0.52 per cent to 16 per cent from15.48 per cent in July 2020. 

Ex-CBN governor, Sanusi calls for diversification of economy

By Moses Uwagbale

Former Emir of Kano, Muhammadu Sanusi II, has said that Nigeria must diversify its economy in order to address the high rate of poverty and inequality in the country.

He also said governments at all levels must invest on human capital development and create enabling environment for investments, instead of borrowing to finance development.

Sanusi gave the advice in a presentation during the virtual Kaduna Economic and Investment Summit.

The former Governor of the Central Bank, however, said the Federal Government has minimal role to play in rejigging the economy.

“While everyone looks to the federal government for solutions, the truth is that its role in the economy is small – both in absolute and relative terms.’’

Sanusi noted that the nation’s economy has not been diversified, years after the discovery of oil.

He added that though Nigeria has generated an increase in wealth from $345 in 1985 to $2,655 in 2015 GDP per capita, but there has been no structural transformation in what the country actually produce.

According to him, though the economy is growing, but its non diversification has resulted to the high rate  of poverty and high level of inequality in the country.

He explained that the difference between African countries and those in Asia is that they have diversified from primary to secondary and tertiary sectors of the global economy.

“The major difference is that they have moved on but we have not,’’ he lamented.

Sanusi pointed out that Malaysia has the same factors that Nigeria has been using as an excuse for having not developed, adding that both countries are multi-ethnic and have fought wars.

The former Emir lamented that Nigeria is still a consumer nation instead of being a producer, by seizing on the investments that the government has done in technology.

“Africa’s failure has been in not leveraging on the underlying infrastructure – towers and under sea cables- to catalyse the development of other and new industries,’’ he said.

‘’If you use your smart phone which is made in China and order shoes from France and they are delivered to you at home, what have you actually gained? You are just a consumer,’’ he added.

The ex-CBN Governor argued that the same phone can be put to productive use, when it is used to shoot a Nollywood movie and the film clip is distributed.

Sanusi noted that the success of Nigeria’s pre-oil economy was based on the dynamism of its trading sector and the diversity of its export base, which ‘’meant that it was less vulnerable to terms of trade shock driven by any one export.”