Business and Economy
Robust Fiscal Policy, Essential To Economic Growth – Sani Musa
Olasunmibo Aboluwade, Abuja
The Chairman, Senate Committee on Finance, Senator Sani Musa, has underscored the need for a robust fiscal policy through collaboration between the legislature and the executive arm of government, as the best way to guarantee economic growth.
Musa stated this on Thursday at an interactive session on the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP) coordinated by his Committee.
The Chairman sought the cooperation of the executive arm of government in his committee’s determine to ensure drastic increment in the nations revenues to meet the challenges confronting the nation.
He said, ” In this endeavour, I call for unity and cooperation between the legislative and executive branches.
“It is only through collaboration and consensus-building that we can develop fiscal policies that are robust, equitable, and conducive to sustainable economic growth.
“The challenges ahead are formidable, but our resolve is stronger.”
He said the interactive session was pursuant of the communication of the President to the Senate for consideration and approval of the 2024-2026 MTEF-FSP.
He also said the sitting coming at this time, was in pursuant of the goal of keeping to the January to December budget cycle.
Musa said, “The MTEF-FSP document represems a clinical roadmap, a guide that charts the economic and financial course of our nation for the upcoming years (2024-2026).
“The MTEF/FSP 2024 — 2026 is not merely a collection of numbers and projections but a comprehensive strategy designed to steer our nation through the complex economic landscape that lies ahead.
“The document outlines projected revenue and expenditure expectations, fiscal policies, and macroeconomic assumptions thereby laying the foundaiion for our budseary decisions and shaping the economic trajectory of our great nafion.
“Therefore, it is our duty not only to scrutinize but to ensure that the MTEF/FSP 2024-2026 aligns with the best interest of Nigerians whom we are all representing.
“As we gather here today, it is vital to acknowledge the complex and challenging economic situation.
“In the light of this administration, this is the first MTEF/FSP to be considered at a time the economy is facing various economic hurdles.
“These includes, fluctuating global oil prices, inflationary pressures, unemployment, general economic hardship partly attributed to fuel subsidy removal which has led to labour unrest and agitation for higher minimum wage.
“It is in these challenging times that the need to increase our revenue sources especially from the non oil sector is paramount, while blocking leakages in the already existing revenue sources.
“Let us strive to reduce the deficit, effectively manage our debt, boost domestic revenue, invest in critical infrastructure, and promote job creation.
“Our role as legislators in shaping the MTEF/FSP is not only a constitutional obligation but a moral imperative to our constituents who look to us for guidance and leadership in safeguarding their economic interests.
“We must engage in thorough and unbiased deliberations, focusing on the welfare of the Nigerian people.
“I urge each esteemed member to lend their expertise, insight, and untiring commitment towards its thorough review and subsequent implementation.
“It is only through collective wisdom and concerted effort that we can fine-tune the economic machinery of our nation, driving it towards prosperity and inclusive growth.
“Our duty today is not merely to pass a framework; it is to shape the economic destiny of our nation for generations to come.
“As you may be aware, Committee on Finance in the 9th assembly have begun investigative hearing on the remittances of all revenue generating agencies of government to the Consolidated Revenue for the Federation(CRF) as well as payment of the 1% Stamp Duty on all contracts executed in all MDAs.
“I assure you that, the committee in the 10th Assembly will continue with the investigation targeted at blocking revenue leakages, curtailing frivolous expenditures by MDAs and as well as boosting revenues of the government in the face of dwindling revenues from traditional revenue source of crude oil.”
Ifedayo Abiola, Ile – Ife
The Honourable Minister of Marine and Blue Economy, Alhaji @GboyegaOyetola, represented by the Managing Director, @NigerianPorts, Dr. @AbuDantsoho, said that the blue economy sector promises a wealth of benefits for the growing youth population of Nigeria.
The Minister disclosed this on Wednesday, at the 2024 International Conference, titled, ‘Advancing Entrepreneurship Education and Practice for Sustainable Development in Africa,” organized by the Institute for Entrepreneurship and Development Studies (IFEDS), Obafemi Awolowo University, Ile-Ife, Osun State.
Other dignitaries at the Conference are the Vice Chancellor Obafemi Awolowo University, Ile-Ife, Professor Adebayo Simeon Banire, Director-General of @nimasaofficial, Dr. Dayo Mobereola and Dr. Richard Akinola, the Chief of Staff to the Minister.
The Minister highlighted the opportunities in the blue economy to constitute a spectrum of economic activities. Amongst these are maritime shipping; the construction and repair of ships; port infrastructure and services; coastal tourism; fisheries and aquaculture; generation of renewable energy offshore.
“Others are seabed mining; underwater cabling; marine biotechnology (in support of the pharmaceutical and chemical sectors); maritime education, research, and consultancy services; protection and restoration of marine habitats; water desalination and waste disposal.
He, however, called on academic institutions across the country to work together with the government to harness the numerous potential inherent in the nation’s ocean and coastal resources
“The Marine and Blue Economy represents a blue gold mine of entrepreneurial opportunities for African entrepreneurs and researchers. By harnessing innovation, embracing sustainability, and fostering collaboration between government, academia, and the private sector, we can create a thriving marine and blue economy that contributes significantly to Nigeria’s sustainable development.
“The Marine and Blue Economy represents a frontier of immense potential for Nigeria and indeed, all of Africa. It is a sector that, if harnessed correctly, can drive innovation, create jobs, and contribute significantly to our national and continental GDP”, the Minister said.
The minister, further stated that the blue economy sector promises a wealth of benefits for the growing youth population of the beloved nation.
According to him, the sector offered scope for innovation, sustainable growth, and fruitful entrepreneurial paths, saying the economic prospects offered by our blue economy are substantial and remarkable.
Nigeria has an expansive coastline of 853 kilometers along the Atlantic Ocean and a maritime area of 46,000 square kilometers within the Gulf of Guinea. Our marine resources are both vast and varied. Our exclusive economic zone spans over 200 nautical miles, achieving a recent extension of 16,300 square kilometers – approximately five times the size of Lagos State.
“Additionally, Nigeria features an extensive resource of inland waterways, with the potential to support an intra-regional trade sphere through a length of 10,000 kilometers. Strategically situated navigational routes link Africa with North and South America, Europe, and Asia, making the maritime sector a crucial catalyst of our nation’s economy.
“Thus, the blue economy sector promises a wealth of benefits for the growing youth population of our beloved nation, offering scope for innovation, sustainable growth, and fruitful entrepreneurial paths. The economic prospects offered by our blue economy are substantial and remarkable.”
Olasunmibo Aboluwade, Abuja
The Senate on Thursday failed to approve a Bill seeking to establish a foreign exchange market in Nigeria.
The proposed law was sponsored by the Chairman, Senate Committee on Finance, Senator Sani Musa (APC Niger East).
The Bill also seeks to make provisions for the control, monitoring and supervision of transactions conducted in the Foreign Exchange Market.
The proposed law is titled, “The Foreign Exchange (Control And Monitoring) Bill, 2024 (SB. 353). It was read for the first time on Tuesday, February 20, 2024.
In his Lead debate, Musa described the bill as an important legislation that seeks to repeal the Foreign Exchange (Monitoring and Miscellaneous Provision) Act, Cap. F34, Laws of the Federation of Nigeria, 2004.
Musa said the proposed law would provide for the regulation, monitoring and supervision of the transactions conducted in the market and for related matters.
He said it would also contribute to the sound development of the National economy by striving to facilitate foreign transactions and maintain an equilibrium of balance of International payments.
He said, “The Bill seeks to stabilize the value of currency by ensuring the liberalization of foreign exchange transactions to maintain an equilibrium of balance of International payments.
“It will also stabilise the value of currency by ensuring the liberalization of foreign exchange transactions and of other foreign transactions by revitalizing
market functionality.
“The Bill attempts to expand Section (1) of the existing Act to incorporate three new provisions to make for clarity and to empower the Central Bank of Nigeria
to administer, control and manage all dealings and transactions in relation to foreign exchange matters.
“The newly introduced clauses will enable the CBN to determine the basic exchange rate of purchase and sale of foreign exchange.
“Clause 6 of the Bill introduces New Sub-clauses (2), (4) and (5) which require authorised dealers to render returns to the CBN on sources of foreign exchange in excess of USD 10,000 and utilisation of same.
“It also requires authorized dealers obtain prior approval of the CBN when seeking to import foreign currency notes.
“Part Ill of the Bill makes elaborate provisions for the grant of a licence to carry on business dealings in foreign exchange. In this part, provisions were made for refusal of licence, suspension or revocation of licence, review and appeal.
“Clause 18 (1) (a) and (b) were added to expand the scope of dealers in the market and where funds are purchased from the Bank. The market rate may be subject to rules and regulations prescribed by the Bank.”
Musa added that with the bill, the operation of domiciliary account shall be as prescribed by the Bank and that the powers of the CBN have been widened to prescribe how foreign exchange may be accepted for the payment for goods and services in Nigeria.
The Bill when passed into law, according to Musa, will contribute to sound development of national economy, facilitate foreign transactions and most importantly, and stabilize the value of the currency by ensuring the liberalization of foreign transactions and revitalizing market functionality.
Most senators in their various contributions expressed the fears that a fresh legislation seeking to monitor or control the activities of the foreign exchange market apart from what the CBN was doing, could be counter productive.
Some of the senators who expressed serious reservations over the proposed law are, Solomon Adeola (Appropriation Committee Chairman); Tokunbo Abiru (Chairman, Banking, Insurance and other Financial Institutions panel; and Aliyu Wadada (Chairman, Senate Public Account Committee) among others
For instance, a former accountant general of the Federation who is now the senator representing Gombe North, Ibrahim Dankwambo, noted that the law, if passed would confuse Nigerians.
He was of the opinion that any further law aimed at regulating the foreign exchange market should come from the executive arm of government to avoid crisis in the sector.
Also contributing, the Senator Adams Oshiomhole, said, “we have to be careful because we cannot speculate. Anything done in this house, Nigerians will take it very seriously, because we have the power to make laws.
“Senators who have spoken, had summarized and amplified meticulously, the contradictions and negative implications of passing the law.
“I believe that the Bill should not attract further hearing because we are trying to take over the monetary policy regulations of the CBN of we go ahead with it.
“If the executive arm of government likes, let them bring a Bill to further strengthen the regulatory powers of the CBN. It is not our work.”
The President of the Senate, Godswill Akpabio, who presided over the session, urged Musa to withdraw the proposed law for further consultations but the senator refused to do so.
Akpabio subsequently called for voice vote to determine it’s approval or rejection for second reading and majority of the federal lawmakers voted against it.
Olasunmibo Aboluwade, Abuja
The Central Bank of Nigeria, (CBN), has banned the use of foreign currency denominated collaterals for naira loans .
This is contained in a memo by the CBN to all banks operating in the country.
The memo with references, BSD/DIR/PUB/LAB/017/004, dated April 8, 2024, was signed by Dr Adetona S. Adedeji, Acting Director, Banking Supervision Department .
It was titled, Letter to All Banks: The Use of Foreign-Currency-Denominated Collaterals For Naira Loans
Part of the letter read, “The Central Bank of Nigeria has observed the prevailing situation where bank customers use Foreign Currency (FCY) as collaterais for Naira loans.
“Consequently, the current practice of using foreign currency-denominated collaterals for Naira loans is hereby prohibited, except, where the foreign currency collateral is:
Eurobonds issued by the Federal Government of Nigeria; or Guarantees of foreign banks, including Standby Letters of Credit
“In this regard, all loans currently secured with dollar denominated collaterals other than as mentioned above should be wound down within 90 days, failing which such exposures shall be risk weighted 150% for Capital Adequacy Ratio computation in addition to other regulatory sanctions. Please be guided accordingly.”