Finance Minister unveils scorecard as foreign reserves hit $44.69bn
The Minister of Finance, Zainab Shamsuna Ahmed, has unveiled the achievements of her ministry as the clock ticks for her exit, revealing that Nigeria’s foreign reserves stood at $44.69 billion as at May 13, 2019.
The foreign reserves stood at $28.3 billion in May 2015 when President Muhammadu Buhari took over governance from ex-President Goodluck Jonathan.
The Minister unveiled the position of the ministry in her opening remarks at the quarterly World Press Conference, held in Abuja.
The minister said also that year-on-year inflation rates continued to improve from a high rate of 18.7 per cent in January 2017 to 11.37 per cent in April 2019.
She also disclosed that states will soon receive their outstanding balance of the Paris Club debts refunds based on the verification made on a total sum of N649.434 billion by the Ministry.
“For the final phase of the Paris Club debts refunds, the total sum of N649.434 billion was verified by the Ministry as the outstanding balance to be refunded to the State Governments.
“The payments made by the CBN as at March 2019, is N691.560 billion.
“The increase in CBN payments partly arose from exchange rate differential at the point of payment. Although, some states still have outstanding balances, which will be refunded in due course.”
According to her, with the implementation of Economic Recovery & Growth Plan (ERGP) which the Buhari’s administration developed in 2017 has led to the economy’s exit from recession and moved upwards on a path of sustainable, inclusive and diversified growth.
She further maintained that it is the resolve of the Ministry to address the long standing issue of “unsatisfactory revenue performance” in Nigeria, particularly in the non-oil sector, in order to ensure appropriate financing for critical sectors such as health, education, and infrastructure, and ultimately of co-creating a Nigeria where no one is left behind.
She said: “Our External Reserves on the other hand, grew from $28.3 billion in 2015 to US $44.69 billion as at May 13, 2019 representing significant improvement that has helped stabilize the economy, including our currency exchange rates.
“Our FX market remained relatively stable from 2017 with the convergence of the NIFEX and NAFEX windows witnessed by November 2018.
“Let me first underscore the vital role of domestic revenue mobilization for continued economic success and inclusive growth in Nigeria.
“Indeed, President Muhammadu Buhari underscored the urgent need for improved revenue performance during his 2019 Budget Speech, and he directed the acceleration of all revenue initiatives.
“The time to act is now – if we do not address the long standing issue of “unsatisfactory revenue performance” in Nigeria, particularly in the non-oil sector, we will never realize our shared goal of ensuring appropriate financing for critical sectors such as health, education, and infrastructure, and ultimately of co-creating a Nigeria where no one is left behind.
“As Minister of Finance, I have taken on the President’s important call to action, by prioritizing revenue generation, and formally launching in January 2019, the Strategic Revenue Growth Initiatives, a suite of comprehensive and cross-cutting interventions aimed at boosting revenue performance.
“I am pleased to share that we have made significant progress since launching the initiatives and I look forward to providing details later in my remarks.”
She also added that the Ministry has achieved seven consecutive quarters of Gross Domestic Product (GDP) growth since the country’s exit from recession in Q2, 2017. “As at Q4 2018, the economy grew by 2.38% in real terms (year-on-year), representing an increase of 0.27% compared to Q4 2017 and, a rise of 0.55% compared with the growth rate in Q3 2018.
Overall, GDP grew at an annual rate of 1.93% in 2018 compared with 0.82% in 2017, representing an overall increase of 1.11% year on year.”
However, the Minister acknowledged that the expenditure performance cannot be in isolation of revenues, which as a result expenditure outturn largely depends on government’s ability to generate budgeted revenues with deficits funded through borrowings.
“In 2018 our budgeted revenue was N7.2 trillion this is against the realised figure of N3.96 trillion, signifying a negative variance of 45%.
“Despite this shortfall we have been able to fully pay salaries and service 100% of our debt. We have also released seven months overhead for 2018, two months for 2019, and N2.079 billion capital expenditure as at 14th May 2019.
“We have adopted a prudent debt management strategy which ensures that we invest what we borrow in capital projects.
“Although our debt by international standards, at 19.09% Nigeria’s debt to GDP ratio is well below the threshold of 56% for countries similar to Nigeria.
“The government is addressing the issue of reducing the debt service to revenue through a combination of debt substitution strategies.”
The Minister maintained that on global risks, the Ministry will continue to remain focused on taking key mitigating actions to safeguard the economy and ensure it is “resilient to external shocks.”
“We will continue to monitor key global risks, and the Federal Ministry of Finance is focused on taking key mitigating actions to safeguard the economy and ensure it is resilient to external shocks.
“As anticipated, the global economy has slowed down in 2019 with a revised growth projection of 3.3%.
“This trajectory is mirrored in Africa, with the continent projected to grow slightly more at 3.5% in the same year. Commodity based economies including Nigeria are expected to continue recovery from the rapid commodity crash witnessed from 2014 to 2016.”
She further explained that, “This development represents challenging times amidst this year’s volatility in oil prices that has fallen from $86/barrel in October to $62/barrel in December when I gave my last Press Conference, and risen to a five-month high of above $71/barrel as at April 2019.
“While oil prices are expected to remain within the average range of $70/barrel, continued volatility is expected through the end of 2019.”
She said that her ministry was carrying out reforms at the Federal Inland Revenue Services (FIRS) and the Joint Tax Board (JTB).
With the reforms, taxpayer database has been expanded to 35 million from 9 million in the four years of the Buhari-led administration.
“Through reforms at the Federal Inland Revenue Services (FIRS) and the Joint Tax Board (JTB), we have been able to harmonize the Tax Identity Number (TIN) database to cover Federal, States and Local Governments to establish a unified identity number system for uniquely identifying tax-payers.
“The country’s taxpayer database has been expanded to 35 million from 9 million at the beginning of the administration.
“It is anticipated that this figure will grow to 45 million individual and corporate payers when the ongoing integration of different biometric database is completed”.