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Foreign

Tanzania to introduce electronic budgeting

By Xinhua

Tanzania will introduce an electronic budgeting system in the 2021/22 financial year in a move to reduce revenue loss and strengthen financial accountability, a senior official said on Monday.

Mary Maganga, the Deputy Permanent Secretary in the Ministry of Finance and Planning, said the new system known as ‘PlanRep’ is web-based planning and budgeting system.

According to Maganga, PlanRep will replace the spreadsheet programme used by government agencies, institutions and corporations.

She told a five-day capacity building training seminar on the electronic budgeting system in the capital Dodoma that the new system will incorporate strategic plans, revenue projection, budgets, expenditure tracking and physical implementation.

The electronic budgeting system will help increase efficiency in management and monitoring of investments by public organisations and corporations.

Subsequently, it will increase the performance and government revenue, Athumani Mbuttuka, the country’s Treasury Registrar said.

Osinbajo insists on repatriation of illicit funds

Nigeria’s Vice President Yemi Osinbajo has urged leaders of destination countries to insist on repatriation of illicit funds and proceeds.

Osinbajo’s spokesman, Laolu Akande, in a statement on Monday in Abuja, said the Vice President made the submission at the virtual inauguration of a publication by the UN Conference on Trade and Development (UNCTAD) on the impact of illicit financial flows (IFFs) on African Development.

Osinbajo  called for an overhaul of the international tax system in order to tackle the scourge.

“The enormity of efforts required to tackle illicit financial flows is evident in the many dimensions the scourge presents itself.

“It manifests through harmful tax policies and practices, abusive transfer pricing, trade mis-pricing and mis-invoicing illegal exploitation of natural resources as well as official corruption, and organized crimes.

“We have to pay particular attention to efforts to reform the international tax system.

“The commercial form of illicit financial flows, especially tax evasion and aggressive tax avoidance accounts for up to 65 per cent  of illicit financial flows.

“This means that we must pay particular attention to these issues, which are aided by things such as tax treaties, tax havens, and financial secrecy jurisdictions and indeed tax competition which leads to a ‘race to the bottom’ in terms of tax rates amongst developing countries.”

He said that another important issue that must receive  attention was the identification and return of proceeds of illicit financial flows back to countries of origin as an effective deterrent to the scourge of illicit financial flows.

According to him, exposing those involved in practices that facilitate illicit financial flows, and retrieving proceeds of illicit funds are efficacious in deterring perpetrators, rebuilding the confidence of the citizenry, and compensating for the damage caused by such crimes.

“I encourage all leaders, whose countries are considered absolute outliers for illicit financial flows, to join forces and take the responsibility of combating the scourge by insisting on the repatriation of illicit funds and their proceeds.

“Let me also avail myself of this opportunity to call on leaders, whose countries are the main destinations for illicit financial flows, to take concrete steps to prevent and stop the receipt of illicit funds into their countries, and to assist in freezing, seizing, and returning such funds and its proceeds already in their countries.”

On the way forward, the Vice President called for cooperation and synergy among the private sector, civil society, trade unions and professional groups to work with governments in tackling illicit financial flows.

He appreciated the immediate past President of the United Nations General Assembly, Prof. Tijjani Muhammad-Bande, and Amb. Mona Jul of the Economic and Social Council (ECOSOC), for taking the initiative to establish the first global Financial Accountability, Transparency and Integrity Panel (FACTI Panel)

Osinbajo called on the UN system to facilitate the establishment of clear rules and enforcement mechanisms on all aspects of illicit financial flows.

Making reference to the Mbeki report on Illicit Financial Flows during an interactive session with journalists at the event, the Vice President called for concerted efforts among African leaders and cooperation between Africa and multilateral organisations to end the scourge of Illicit Financial Flow from the continent.

On the proposal to combating Illicit Financial Flows by the Organisation for Economic Cooperation and Development (OECD), Osinbajo said there was need for adequate representation of Africa during negotiations about illicit funds and their proceeds.

For his part,  the Secretary General of UNCTAD, Dr Mukhisa Kituyi, said the determination of political authorities in Africa to address issues relating to abuse of tax practices, among others would be crucial in tackling illicit flow of resources to havens outside the continent.

Kituyi commended Nigeria for its leadership on the subject matter.

He added that sharing data on trade among African countries and adopting best practices such as the Open Governance Initiative as well as the Extractive Industry Transparency Initiative, would help in tackling the scourge of Illicit Financial Flows.

The publication by the United Nations Conference on Trade and Development (UNCTAD) on the impact of illicit financial flows (IFFs) on development in Africa was designed to broaden the awareness on the scale, scope, and cost of illicit financial flows.

Detail as reported by Laolu Akande

Senior Special Assistant to the President on Media & Publicity

TACKLING ILLICIT FINANCIAL FLOWS: WE MUST PAY PARTICULAR ATTENTION TO REFORM OF INTERNATIONAL TAX SYSTEM, SAYS OSINBAJO AT UN FORUM

*VP urges leaders of destination countries to insist on repatriation of illicit funds & their proceeds

Leading the call for an effective global action against Illicit Financial Flows (IFF) and related vices, which is negatively impacting progress in developing countries especially in Africa, Vice President Yemi Osinbajo, SAN has called for an overhaul of the international tax system in order to tackle the scourge.

The Vice President made the call on Monday at the virtual press launch of a publication by the United Nations Conference on Trade and Development (UNCTAD) on the impact of illicit financial flows (IFFs) on African Development.

According to Prof. Osinbajo, “the enormity of efforts required to tackle illicit financial flows is evident in the many dimensions the scourge presents itself. It manifests through harmful tax policies and practices, abusive transfer pricing, trade mis-pricing and mis-invoicing illegal exploitation of natural resources as well as official corruption, and organized crimes. We have to pay particular attention to efforts to reform the international tax system.”

Continuing on the need for an effective reform of the system, the Vice President said “…the commercial form of illicit financial flows especially tax evasion and aggressive tax avoidance accounts for up to 65% of illicit financial flows. This means that we must pay particular attention to these issues which are aided by things such as tax treaties, tax havens, and financial secrecy jurisdictions and indeed tax competition which leads to a ‘race to the bottom’ in terms of tax rates amongst developing countries.”

Calling for an urgent global action, the Vice President said leaders of destination countries of illicit funds and their proceeds must demonstrate the will to tackle the menace.

He said “another important issue that we must pay attention to is the identification and return of proceeds of illicit financial flows back to countries of origin as an effective deterrent to the scourge of illicit financial flows. Certainly, exposing those involved in practices that facilitate illicit financial flows, and retrieving proceeds of illicit funds are efficacious in deterring perpetrators, rebuilding the confidence of the citizenry, and compensating for the damage caused by such crimes.

“I encourage all leaders, whose countries are considered absolute outliers for illicit financial flows, to join forces and take the responsibility of combating the scourge by insisting on the repatriation of illicit funds and their proceeds.

“Let me also avail myself of this opportunity to call on leaders, whose countries are the main destinations for illicit financial flows, to take concrete steps to prevent and stop the receipt of illicit funds into their countries, and to assist in freezing, seizing, and returning such funds and its proceeds already in their countries”.

On the way forward, the Vice President called for cooperation and synergy among “the private sector, civil society, trade unions and professional groups to work with governments in tackling illicit financial flows.”

His words: “The private sector must support our efforts by adhering to international best practices in their operations and by ensuring that their tax and trade practices comply with local laws while professional bodies, including those for lawyers, accountants, auditors, and bankers must observe ethical professional standards and hold their members to account if they abet tax evasion and aggressive tax avoidance.”

While appreciating the immediate past President of the United Nations General Assembly, Prof. Tijjani Muhammad-Bande, and Amb. Mona Jul of the Economic and Social Council (ECOSOC), for taking the initiative to establish the first global Financial Accountability, Transparency and Integrity Panel (FACTI Panel), Prof. Osinbajo called on the United Nations system to facilitate the establishment of clear rules and enforcement mechanisms on all aspects of illicit financial flows.

Making reference to the Mbeki report on Illicit Financial Flows during an interactive session with journalists at the event, the Vice President called for concerted efforts among African leaders and cooperation between Africa and multilateral organizations to end the scourge of Illicit Financial Flow from the continent.

Answering a question on the proposal on combating Illicit Financial Flows by the Organisation for Economic Cooperation and Development (OECD), the Vice President said there is need for adequate representation of Africa during negotiations about illicit funds and their proceeds.

In his remarks at the event, the Secretary General of UNCTAD, Dr Mukhisa Kituyi said the determination of political authorities in Africa to address issues relating to abuse of tax practices, among others would be crucial in tackling illicit flow of resources to havens outside the continent.

While commending Nigeria for its leadership on the subject matter, Kituyi said sharing data on trade among African countries and adopting best practices such as the Open Governance Initiative as well as the Extractive Industry Transparency Initiative, would help in tackling the scourge of Illicit Financial Flows.

The publication by the United Nations Conference on Trade and Development (UNCTAD) on the impact of illicit financial flows (IFFs) on development in Africa is designed to broaden the awareness of the scale, scope, and cost of illicit financial flows.

Laolu Akande

Senior Special Assistant to the President on Media & Publicity

Office of the Vice President

28th September 2020

Expert proffers strategies for business revival

By Moses Uwagbale 

A public Finance expert, Dr Greg Ugochukwu Ezeilo has suggested survival strategies that organisations can use to revitalize their operations and bounce back to profitability quickly in the post COVID-19 era. 

He gave the suggestion at a webinar organised by Team Bronze, a Think-Tank Group from Igbo-Ukwu, a historical town in Anambra State. 

Team Bronze is also a group that is driven by the overarching goal of championing the wholesome development of their community and the Nigerian state in general. 

Ezeilo is a consultant to the Public Accounts Committee of the House of Representatives and a fellow of the Institute of Chartered Accountants (ICAN). 

He said that Some of the survival strategies include digitisation of business operations, right-sizing of staff and outsourcing of certain functions. 

Others include renegotiating wages of staff, adaptation to the dictates of the new normal and close collaboration with key stakeholders. 

The webinar, which had the topic: ”Business Recovery and Survival Strategies in Post Pandemic,” was the second in series organised by the group. 

Ezeilo said that the COVID-19 pandemic dealt a devastating blow on the world economy, with the global Gross Domestic Product (GDP) contracting by 7.7 per cent, while Nigeria’s GDP shrunk by 5.3 per cent. 

He noted that COVID-19 pushed many Nigerians into abject poverty and misery, warning that the devastating effect on local and world economies might remain for a long while. 

He regretted that key industries in Nigeria had remained shut since March when the pandemic broke out and that resulted in the closure of several small businesses and loss of jobs for thousands of persons. 

Ezeilo further advised promoters of organisations to consider profitable new ventures, mentioning some of them to include the agricultural value chain, transportation, food stuff and groceries, bakery and confectionary as well as commodity brokerage. 

“Other tips include deciding if the company’s workforce should operate remotely or in physical offices, exploring new sources of finance and ensuring optimal customer service and care,” he added. 

He disclosed that the Federal Government had floated the Survival Fund, a funding scheme that will support micro small and medium enterprises (MSMEs) to overcome the challenges of COVID-19. 

He advised businesses to examine the criteria for accessing the fund and take advantage of the opportunity. 

He listed a few other sources of low cost funding for MSMEs to include Renmoney, Green Stallion, NIRSAL MFB and Anchor Borrowers Programme. 

He identified innovation and technology as a smart technique for reviving businesses, stressing the need to move from brick and mortar business to online business. 

He said: ”Whatever business or trade you are engaged in, you need to embrace technology.” 

Lagarde’s peace at risk as ECB splits over virus response

By Reuters 

European Central Bank policymakers are increasingly divided over how to steer the economy through a second wave of COVID-19, threatening President Christine Lagarde’s hard-won peace, conversations with eight ECB insiders show. 

Lagarde has managed to end the public infighting that left the ECB in disarray in the final months of Mario Draghi’s tenure last year and she has seamlessly pushed through several record stimulus packages to keep the economy afloat amid the pandemic. 

Her pledge to seek consensus and bring sceptics onboard is in stark contrast to her predecessor Draghi, who rarely engaged key opponents of his policies and signalled moves even before any discussion within the Governing Council. 

But tensions are rising again as a fresh surge in infections forces the ECB to contemplate even more stimulus, with old rifts resurfacing and chief economist Philip Lane coming under fire from all sides. 

Conservative policymakers, known in central bank jargon as “hawks”, argue that the ECB is downplaying some of the good news, such as a stream of better-than-expected economic indicators over the summer. 

In the opposite corner, “dovish” central bankers are pushing Lagarde to adapt stronger language both on the risks to growth and the threat from the euro’s appreciation against the dollar. 

Disagreements were already clear during the last policy meeting in September, the eight sources, all with direct knowledge of the process, told Reuters. 

The hawks wanted the ECB to quietly reduce its bond purchases given the relatively benign market conditions, saving its firepower so it can raise the pace of buying again if needed at a later date without increasing the overall size of the Pandemic Emergency Purchase Programme (PEPP). 

Some also argued that economic projections were too pessimistic because they failed to account for fiscal stimulus measures already announced which would inevitably lead to higher growth and inflation. 

Both of these points were rejected by chief economist Lane, but so was a call to give a clearer warning about the risks to growth from a stronger euro, the sources said. 

The ECB, which speaks on behalf of board members, declined to comment. 

While most policymakers have echoed Lagarde’s “wait and see” stance in public statements, some took a decisively dovish tone in the meeting, openly discussing prospects for more stimulus, something Lagarde has deliberately steered clear of. 

Some of the sources, who spoke on condition of anonymity, especially objected to ECB board member Fabio Panetta’s comments last week that the ECB should err on the side of doing too much rather than too little. 

Panetta, who joined the board at the start of the year, argued that inflation was uncomfortably below the ECB’s target and in such situations a policy response may be necessary. 

“It’s like Mario is back,” one of the sources said, referring to Draghi’s tendency to deviate from the Governing Council’s message and front-run policy before others had a chance to weigh in. 

But the sources added that Lagarde is for now keeping her end of the bargain and she is even engaging with policymakers Draghi did not talk to. 

“She’s working the phones non-stop and managed to get a consensus in June so I have no reason to think she’s about to change her style,” another source said. 

Some senior ECB staff have advocated increasing the quota for emergency bond buying to 2 trillion euros from the current 1.35 trillion euros but Lagarde pushed back on that suggestion, bolstering her credibility among policymakers who were often at odds with Draghi, one of the sources said. 

The sources said that while policy action may be necessary in December, bringing disagreements into the public domain and fuelling market expectations with dovish comments could make it more difficult to keep it consensual. 

“If you front-run policy in public debate, then you harden positions and make it difficult to compromise,” one of the sources said. “That’s when you get public dissent and market confusion.” 

The sources also agreed that while the possibility of a rate cut was still there, as often stated by the bank, there was no appetite for such a move and it was not being discussed. 

While the majority of policymakers were happy with Lagarde’s management style, Lane, who is seen as the most influential voice on policy matters, was criticised by both factions. 

On the one hand, he was criticised for a choice of words deemed too timid on the euro’s appreciation at the Sept. 10 policy meeting, underwhelming traders. 

Some policymakers had insisted during the policy meeting on tougher language, like that used by Draghi in 2018, but Lane pushed back, two sources said. 

On the other hand, hawks objected to Lane’s blog post the day after the meeting, in which he took a dimmer view on inflation and warned against complacency, suggesting he wanted to amend the agreed policy message, several sources said. 

Other signs of the tension, the sources said, were the growing number of leaks from the Governing Council, some of which lack credibility and are designed to steer the debate, rather than reveal it. 

One leak suggested the ECB was contemplating extending emergency powers to its open-ended bond purchase scheme, a notion Yves Mersch, who also heads the ECB’s legal services, rejected. 

“No such thing was ever discussed,” a second source said. “Removing limits indefinitely would be a guaranteed way to get us sent back to court.”  

China honours 49 Nigerians workers

By Anthony Areh 

The Chinese Embassy in Nigeria has honoured 49 Nigerian employees of Chinese companies operating in Nigeria for their outstanding performance and contributions to strengthening diplomatic ties between both countries. 

Mr Zhao Yong, Charge D’ Affaires of the embassy, presented 100,000 naira cash awards to each of the 49 beneficiaries on Monday in Abuja. 

Zhao said the award ceremony was organised to commemorate both countries’ independence anniversary on Oct. 1, and 49 years of friendship and bilateral relations. 

He commended the employees whose contributions, he said, had led to Nigeria’s development, especially in the area of infrastructure. 

According to him, China and Nigeria have a long history of great friendship and solidarity, both of which have grown tremendously over the years. 

He said that such friendship and solidarity would continue to grow stronger. 

Zhao said both countries also gave each other invaluable support at the onset of the coronavirus pandemic (COVID-19). 

 “The coming Oct. 1 marks the 60th anniversary of the Independence of Nigeria, as well as the 71st anniversary of the founding of the People’s Republic of China. 

“Celebrating Oct. 1st together constitutes a unique bond between China and Nigeria. 

“I wish to take this opportunity to thank Nigerian employees in local Chinese companies for your contributions to the mutually beneficial bilateral cooperation. 

“With joint efforts, tangible results have been made in many areas, especially in the area of infrastructure. 

“Next February will mark the 50th anniversary of China-Nigeria diplomatic relations. 

“Let us work together to uplift China-Nigeria relations to new heights for the benefits of two peoples and country,” Zhao said. 

Zhao said that in response to COVID-19, China would continue to support Nigeria. 

He recalled that China was the first country to offer assistance to Nigeria when COVID-19 broke out in the country. 

The deputy Charge d’ Affaires said that during the period, the Chinese government donated two large batches of medical supplies to Nigeria as aid. 

According tom him, the third batch, which has already arrived the country will be delivered soon. 

Zhao said the local Chinese community was extending its helping hand with the donation of masks and medical gloves, among other supplies and equipment. 

He said that statistics from the China General Chambers of Commerce revealed that the total value of materials and funds donated by the local Chinese private stakeholders to Nigeria amounted to N3 billion. 

Speaking on behalf of the beneficiaries, Miss Nininlola Fafore, Public Relations Director, Huawei Nigeria, lauded the Chinese government for its sustained support and development to different sectors in Nigeria. 

Fafore said as a Chinese company, Huawei was able to use its telecommunication expertise to ensure work continuity in a virtual space even at the height of the pandemic. 

“This is an opportunity and event to celebrate the National Day for China on their 71st year and also the 60th year for Nigeria. 

“It is an important thing to understand how much we have come together with China. 

“China has brought so much growth and development to different sectors in Nigeria, across several industries. 

“Without your support I do not think we would have had such growth in ICT development that runs across other industries, this has been a great support. 

“We thank God we have been able to contain the spread of COVID-19.  Support for provision of mask. 

“Huawei has done a lot working directly with the Federal Government by provision of protective wear and aiding the continuous work in the virtual space for the Federal Republic of Nigeria and staff. 

“We have been able to provide the network devices and have been able to provide tele-presence devices to the Federal government and even the President was impressed at what we have done,” Fafore said. 

Fafore added that aside contributing to Nigeria’s Gross Domestic Product (GDP), Huawei has produced more than 20,000 Engineers in Nigeria who have moved from vendors to operators and working abroad in extreme position.