Abeokuta: By: Sina ODUNTAN
Published, July 30, 2021
The best part in the job of a Finance Minister is to slowly and steadily shore up government finances and putting his/her country on a path to sustainable growth and prosperity.
A care free has no regard for the long term, he/she spends lavishly, thereby has little or no control over government policy or the broader economy.
Oluwakemi Adeosun falls into neither category. She's neither conservative nor care free. Rather, she's that rarest of breeds: a spectacularly good former Finance Minister whose mettle from the management of Ogun State finances was elevated to the position of enormous responsibility very quickly at the Federal Ministry of Finance. Until the shenanigans of her traducers appeared to win, unrelentingly, she at short span of time was able to transform Nigeria's finances, fixing the many pitfalls her predecessor had left behind and not engaging in frivolous scaling up the nation's debt portfolio.
Kemi Adeosun is in many ways the product of a British life, built, though, on a childhood full of lessons about virtues, hardwork, tenacity and competence. Born and bred in London, Kemi holds a Postgraduate Diploma in Public Sector Financial Management from University of London (School of Oriental and African Studies) as well as a BSc. Hons. Degree in Applied Economics from University of East London. Kemi spent the first 36 years of her life living and working in London, the United Kingdom.
She is a seasoned finance professional with over 25 years of finance experience gained in the United Kingdom and Nigeria.
Kemi Adeosun walked steadily into the office of the Minister for Finance of the Federal Republic of Nigeria despite the intimidating resume of her immediate predecessor, Dr. Ngozi Okonjo-Iweala, the current Director-general of World Trade Organisation (WTO), who held sway in the days of economic boom – oil windfalls. But by the expiration of the administrations that she served the boom had come to gloom.
Of course, Kemi was challenged by the stature of her predecessor but she was not intimidated more so the legacy left behind was nothing to be proud of. It was no legacy anybody wants to build upon.
On assumption of office as Minister of the Federal Republic of Nigeria, Federal Ministry of Finance, in November 2015, Kemi was acquainted with the three-point agenda of the President Muhammed Buhari’s administration, which includes to improve security, fight corruption, and grow the economy. The concern of her Ministry was the realisation of growing the economy, enthroning dependable and strong fiscal policy and healing the bleeding economy.
The major responsibilities of her Finance Ministry was also to interface and coordinate the Central Bank of Nigeria (CBN), the Debt Management Office (DMO), and other monetary policy authorities in order to build economic structures that would ensure financial system stability and create enabling and sustainable environment for economic growth for the wellbeing of the majority of Nigerians.
As Minister of Finance, Kemi Adeosun had the task of driving the agenda for the country’s economic recovery. Coming as the Commissioner for Finance in Ogun State with the energy by which she grew Ogun State Internally Generated Revenue (IGR) by over 500%, she deployed her economic skills and competence to initiate policies, mobilise financing and steer the economy in doldrums out of troubled waters. But this initial deployment of advanced economic tools to rescue an inherited economy already battered by extraneous economic debauchery did not prevent the economy from sinking into recession in the second quarter of 2016 after three consecutive contractions in the Gross Domestic Product (GDP) negative growth.
However, Mrs. Adeosun was able to finance the economy back afloat. From about -2.34 per cent in 2016, the economy recovered in the second quarter of 2017 with a 0.72 per cent growth and continued the sustained rise, albeit slowly, to 1.81 per cent in the third quarter of 2018 by such a time she was leaving the Ministry.
Mrs. Kemi Adeosun engineered an efficient and hard-working group of highly educated technocrats to work for the Nigerian government, and, above all, quickly fix an economy in recession in a historic record time yet to be witnessed even by the most advanced economies of the first world. She put mechanisms and structures in place to build a virile economy that could withstand instability inherent in world economy. Therefore, by the time her traducers appeared to win the followings were already in place.
Creation of Efficiency Unit
The Federal Government recurrent expenditure profile (ministries, departments, and agencies recurrent expenditures) that had become humongous was cut down by setting up the Efficiency Unit in the Federal Ministry of Finance to ensure that all government expenditures received the best possible value for money.
The main objective was to cut down on wastage by eliminating duplication, promote efficiency and encourage best procurement practices in order to guarantee savings for the economy. Consequently, the unit was responsible for reviewing non-wage related overhead expenditures, including travel costs, entertainment, events, printing, IT consumables, and stationeries.
Resultantly, the government was able to save about N15 billion annually from the services of the Efficiency Unit, while the capital expenditure component of the budget was reduced from the usual 80/20 ratio to about 70/30 in one year.
Presidential Initiative on Continuous Audit (PICA)
The Presidential Initiative on Continuous Audit (PICA) was also set up by this British trained economist, Mrs. Kemi Adeosun, to validate financial controls, assess risks, trimming the public sector and prune personnel costs, ensure compliance with public financial management reforms, detect errors and make recommendations to ensure full accountability of all government expenditures.
PICA has been involved in conducting personnel audits in MDAs, like the Pension Transitional Arrangement Directorate (PTAD) and former Nigeria Airways workers, to remove ghost workers from government payrolls, verification of subsidy claims by petroleum products marketers, and recovery of salaries paid to ex-diplomats. To this extent, the Federal Government was able to eliminate frauds and fraudlent activities of the public servants.
Introduction of the Whistle-Blower Policy
The policy focuses on anti-corruption, fiscal discipline, and encouraging transparent government business. This policy took up some senior members of the government and powerful vested interests head-on. By July 2017 after the introduction of this policy, Kemi Adeosun came out boldly that over 2,500 reports on various corruption acts were received through various reporting channels, with 365 of them being actionable tips.
Essentially, the policy promoted a reward system where citizens were entitled to at least 5 per cent of the total value of recovery by the government from a reported corruption act.
The former Minister said the tips were related to issues of contract inflation, ghost workers, illegal recruitment, misappropriation of public funds, illegal sale of government assets, diversion of revenues and violation of Treasury Single Account (TSA) regulations, which also received increased enforcement under her administration.
Voluntary Assets and Income Declaration Scheme (VAIDS)
Mrs. Adeosun also initiated the Voluntary Assets and Income Declaration Scheme (VAIDS), which granted defaulting taxpayers a one-year amnesty period to regularise their tax status.
As at May 2017, the scheme, undertaken by the Federal Inland Revenue Service (FIRS) in conjunction with the Federal Ministry of Finance and the State Joint Tax Authorities was able to capture 14 million of the estimated 70 million potential taxpayers. This brought over N1.17 trillion in revenue in the first quarter of 2018 to the Federal Government, apart from about 7,500 jobs that were created for young Nigerians as Community Tax Liaison Officers (CTLOs).
Asset Tracking and Management Project/ Central Asset Register
Under Mrs. Kemi Adeosun, Federal Ministry of Finance, launched the Asset Tracking and Management Project and Central Asset Register. This policy mechanism helps the Federal Government to locate, identify, assess and evaluate all its movable and immovable assets on one hand, and recording the actual quantity, value, condition, and location of all the capital assets belonging to the Federal Government thereby eliminating irregular and corruptible conversion of public properties.
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Global Eurobond Issues
Before she took over, global oil price index had begun to show strains and at the birth of Buhari administration global oil prices had dropped to all-time low. Mrs. Adeosun, in a jiff, was able to mobilise financing rather than direct loans from within and outside the country for key infrastructure projects at a scale unprecedented in the country.
For examples, in 2017, Nigeria accessed the International Capital Market (ICM) thrice with Eurobonds issuances totalling $4.5 billion. In February of the year, about $1 billion bond, with a 15 years tenor, fixed coupon 7.875 per cent per annum and yield of 7.875 per cent, was issued to fund capital expenditure in the 2016 budget. The maturity date is February 16, 2032.
On April 5, another $500 million bond, expected to mature on February 16, 2032, with 15 years tenor; fixed coupon 7.875 per cent per annum and yield 7.500 per cent, was also issued to fund capital expenditure in the 2016 budget.
In addition, a $1.5 billion bond was issued on November 28 to fund capital expenditure in the 2017 Budget and redemption of Nigeria Treasury Bills (NTBs). The tenor for the bond was 10 years, at a fixed coupon rate, with yield of about 6.500 per cent per annum each and maturity date of November 28, 2027.
Similarly, on November 28, $1.5 billion bond was issued to fund capital expenditure in the 2017 Budget and redemption of Nigeria Treasury Bills (NTBs). It had a 30-year tenor; fixed coupon 7.625 per cent per annum with a yield of 7.625 per cent and maturity date for November 28, 2047.
These are what Mrs. Adeosun's antagonists would refer to as "unbridled loans". It's a case of kettle calling pot black.
Settlement of Outstanding Workers’ Liabilities, Pension Debts
Pitiful of the accumulated unpaid gratuities and pensions, Mrs. Adeosun as the Minister of Finance cleared all the inherited arrears of pension benefits to civil servants for 2014, 2015 and 2016, and ensure regular payment of salaries as well as refund of all Paris Club Loans over-deduction debts to the 36 States of the Federation for the three years from the recoveries and various cost-cutting measures the Ministry put together.
Establishment of Strategic Lending Institutions
Tthe Ministry under Kemi Adeosun facilitated the establishment of the Development Bank of Nigeria (DBN) to spur growth of micro, small and medium enterprises (MSMEs) to support industrialisation and make credits available to Small and Medium Scale Enterprises (SMEs).
In 2016, the Ministry reached an agreement with the International Monetary Fund (IMF), the World Bank Group, African Development Bank and the European Investment Bank for $1.3 billion for the take-off of the DBN in the first quarter of 2017.
Within this framework, the British born economic guru provided access and funding to these agencies at subsidised interest rates through Development Finance Institutions (DFIs) such as the Bank of Industry, Development Bank of Nigeria and Bank of Agriculture.
Apart from these, there were other Adeosun’s initiatives financed by the Government Enterprise and Empowerment Programme (GEEP) with N27.4 billion in interest-free loans account for about 1.1 million beneficiaries across the 36 States of the Federation, under the TradeMoni, MarketMoni, and FarmerMoni, among others.
Financing Of Civil Servants’ Low-Cost Housing Scheme
The civil servants’ low-cost housing scheme was successfully launched by her Ministry with a N13 billion Federal Civil Servants Mortgage Refinancing Scheme through the Nigeria Mortgage Refinance Company (NMRC), to refinance mortgages for 5,635 beneficiaries in the federal civil service.
Wider Enforcement of the Treasury Single Account (TSA)/IPPIS
Apart from the wider enforcement of the Treasury Single Account (TSA) system, which was in limbo under previous administrations, Mrs. Adeosun enforced the application of the Integrated Personnel Payroll Information System (IPPIS) in the computation of human resource data and preparation of salaries and other remuneration of all MDAs thereby eliminating ghost works and corruption in payrolls.
Funding of NSIA Economic Projects
Federal Ministry Finance under this energetic woman transferred more funding from the Excess Crude Oil Revenue savings to the Nigeria Sovereign Investment Authority (NSIA), managers of the $1.5 billion Sovereign Wealth Fund (SWF), to finance some projects targeting some high growth sectors of the country’s economy. Consequently, in August 2016, the NSIA announced two major interventions in the housing and agriculture sector – a $500 million fund for Real Estate and a $200 million fund for agricultural development.
To boost local production of fertiliser, the NSIA financed the rehabilitation of about 16 moribund fertilizer-blending plants across the country with a combined installed capacity of over 2.63 million metric tonnes of NPK fertilizers. As a result, the programme eliminated the importation of fertilizer and ensured the commodity was sold at government subsidised prices of N5,500 against the market rate of N8,000 as well as create an estimated 50,000 direct jobs in the agricultural sector.
CBN FOREX, Agricultural Interventions
The Finance Ministry headed by Mrs. Adeosun encouraged the interventions of the Central Bank of Nigeria (CBN), through the policy to restrict allocation of foreign exchange for the importation of 42 Items, and introduced the popular Anchor Borrowers Programme of the Buhari administration. Under the FOREX policy initiative of the Ministry and CBN, the country achieved a relatively stable exchange rate of the Naira to the dollar since 2015 until recently when policy summersault devalues the Naira, while the Anchor borrowers Programme resulted in the increased local production of rice.
Mrs. Kemi Adeosun fearless, fiercely competent attacked her portfolio as Minister for Finance of the Federal Republic of Nigeria, and made enemies especially as a result of her anti-corruption drive and no-nonsense approach to her duties. A valid reason why her traducers are yet unrelentingly.
Until she was compelled to resign from office in September 2018 as a result of the allegation of parading a forged National Youth Service Corps (NYSC) certificate, which was procured for her by same forces that used it against her when she refused to compromised her office, Nigeria’s former Minister of Finance, Kemi Adeosun, however, was recently vindicated by the judgement of an Abuja High Court, stating that she did not need to have a National Youth Service Corps certificate before she could serve as a minister.
Adeosun said in a statement posted to her verified official Facebook page: “The ruling vindicates me after a very traumatic spell,”
“It is, however, not only a personal victory; it’s also a victory for many Nigerians in the Diaspora under similar conditions who are desirous to serve their country.”
Within a short spell, Mrs. Adeosun's most important achievement, however, was her ability to lift Nigeria out of recession within six months, an uncommon feat that could only be achieved by an investment banker and accountant as her.
She has the character, competence and Ivy League achievements whether she is a first class graduate of economics or not. After all, Professor Wole Soyinka was not a first class graduate of Literature, but today he is a distinguished and prominent Nobel Laurret and a global citizen.
Mrs. Kemi Adeosun has an impeachable reputation as former Minister of the Federal Republic of Nigeria.
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