A. UPDATE ON THE ECONOMY
· Minister of Budget and National Planning gave an update on the economy to the Council
· Highlights of the presentation among others:
– Fiscal year 2016 budget is currently before the National Assembly presented by President Buhari on December 22, 2015.
– Budget is geared towards stimulating the economy and promoting inclusive growth – (poor and vulnerable).
– State of economy largely affected by the decline in oil price between June 2014 and December 2015 – this has increased domestic vulnerabilities.
Budget Objectives among others
· To deliver inclusive growth to Nigerians
· Create significant number of jobs to reduce unemployment and underemployment.
· Building an economy that is less vulnerable to oil price shocks by creating resistant divested income base and creating efficient Public Financial Management System.
· Fostering macroeconomic stability conducive for growth e.g. achieving GDP growth rate of 4.2% and increasing investors confidence.
Capital Priority Projects in 2016 in Infrastructure
· Power Projects
· Transportation, railways and roads
· Water Projects
Major Policy and Strategic Initiatives:
· Government conscious of the current rate of unemployment and underemployment – the budget is a vehicle for putting more Nigerians to work.
· Job creation drive will be private sector led.
· Government to partner States and LGAs to recruit train and deploy 500,000 unemployed graduates as teachers.
· Vice President office working to design an implementable and transparent Conditional Cash Transfer programme of N5,000 monthly to one million poorest and most vulnerable.
· Home-grown school feeding for public primary school across the country.
· Youth employment agency to train 370,000 youth in skill acquisitions and vocational training.
· Free education for science, technology, engineering and maths students.
· Microcredit scheme for one million artisans and market women at N60,000 each
Key messages to the States
· Decline in oil price may persist – will affect distributable revenues for all tiers of government.
· States are encouraged to explore innovative financing options and increase their IGRs to compliment their revenue share from the Federation Account.
· Strong partnership from the States towards implementing the social safety net programmes.
· Efficient utilization of available resources.
· FG expects combination of efforts by all tiers of government to deliver the necessary stimulus required to revive the economy.
· At this time, the Federal Government will not increase VAT rate but will improve upon VAT collection which is currently only about 20%.
· States were encouraged to help FIRS in VAT collection and remittance.
B. REPORT ON EXCESS CRUDE PROCEEDS
· Accountant-General of the Federation reported to the Council that the balance as at 31stDecember, 2015 stood at $2,257,937.98
C. REPORT ON SOME FGN AGENCIES COLLECTING REVENUE IN FOREIGN CURRENCIES BUT REMITTING TO FEDERATION ACCOUNT NAIRA EQUIVALENT
· Permanent Secretary, Ministry of Finance reported that, apart from NNPC, NIMASA and Port Authority, other agencies involved in revenue generating are FIRS, Shippers Council, Airport Authority and Nigerian Immigration Service.
· He reported that the introduction of TSA has now resolved the problem as all accounts are under the control of the CBN.
· The Vice President reiterated FG policy that NNPC and other agencies must present budget for approval before spending in line with TSA.
D. UPDATE BY NEC AD-HOC COMMITTEE ON MANAGEMENT OF EXCESS CRUDE ACCOUNT AND PAYMENT INTO THE FEDERATION ACCOUNT
· Governor of Edo State gave an update to the Council as follows:
· The Ad-hoc Committee has submitted a memo to the Council for approval on its findings
· 81 government revenue generating agencies were identified for forensic auditing.
· 18 core revenue generating agencies like NNPC would be audited by KPMG, an international audit firm.
· Other revenue generating agencies would also be forensically audited by SIAO a local auditing firm.
· Council approved engaging the forensic auditors
E. UPDATE ON STATES THAT HAVE RECEIVED BAILOUT FUNDS AND THOSE OUTSTANDING
· CBN Governor gave an update to the Council that 23 States have benefited from the N10 billion each ECA-backed soft loan
· Some States have not indicated interest, while some are still holding discussions with their banks
· 28 States have benefited from the Presidential bailout.