Iweala-Okonjo’s transformation agenda

Iweala-Okonjo transformation agendaOne of the major challenges of introducing fiscal consolidation was to stem leakages in oil revenues, said the Minister of Finance, Dr Ngozi Iweala-OkonjoNigeria is well on the path to fiscal stability, according to Dr Ngozi Okonjo-Iweala, Nigeria’s co-ordinating minister for the economy and minister of finance

Outlining the achievements made so far, Iweala-Okonjo told the New World Nigeria investor summit in London about her strategy for growth, and discussed the state of Nigeria’s macro-economy in general. Stephen Williams was there to report for African Review.

The New World Nigeria investor’s summit held in London this summer, coinciding with the London Olympics 2012, drew together a galaxy of Nigeria’s top cabinet ministers and state governors who presented Nigeria’s case as an investment destination. 

On the first day of this three-day event, co-sponsored by Nigeria Olympic Committee and Bank of Industry and organised by Brand Communications, Dr Ngozi Iweala-Okonjo, the minister of finance, made a compelling case for the significant economic achievements that had been introduced in recent years.

“We recognise that we must manage our macro-economy wisely,” she said before describing how the insertion of a benchmark oil price within the national budget, first introduced by her when she previously served in former-President Olusegun Obasanjo’s administration, has had the effect of bearing down on volatility.

“Fiscal consolidation and growth,” Iweala-Okonjo insisted, “are not a contradiction in terms, and are really happening.” This is actually crucial if Nigeria is to successfully navigate the uncertainty of the current global economy, she added.

One of the major challenges of introducing fiscal consolidation, the minister said, was to stem leakages in oil revenues.

Earlier this summer, with the support of President Goodluck Jonathan, Iweala had established a 15-strong committee chaired by Aigboje Aig-Imoukhuede, group managing director and chief executive of Access Bank, to further investigate petroleum subsidy verification procedures.

It would appear that around half of the N888 bn (US$5.57bn) budgeted for subsidies this year will be clawed back by government. As well as the issues surrounding misappropriation in the fuel subsidy process, the outright theft of crude oil is also being addressed. The minister stated that this practice is thought to cost Nigeria some US$5bn a year.

However it is not just the oil industry that is being targeted. Iweala described the measures being introduced by the Federal government to improve tax collection with the establishment of the Debt Enforcement and Special Prosecution Unit in the Federal Inland Revenue Service (FIRS).

“Over the past five to six years,” Iweala reported, “we have managed to triple the amount of tax we collect.” She also provided more recent figures saying the work of the new unit “has led to a cumulative tax collection between January and May 2012 of N1.9 trillion, an increase of N384.4 billion, or about a 20.4 per cent increase, over the same period in 2011.”

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