- Pays $4.5bn Paris Club Refunds
BY COBHAM NSA, ABUJA – The Federal Government says funds in Excess Crude Account (ECA) were expended on Paris Club Refunds to States, purchase of Super Tucano jets and other military equipment to fight insecurity in the country.
Minister of Finance, Mrs. Zainab Ahmed, who gave the explanation in Abuja on Monday, said there is no cause for alarm over the so-called depletion of ECA from over $2 billion to about $631.5 million as the expenditure was backed by the force of law and stakeholders’ approval.
She also confirmed that government has continued to honour its outstanding financial commitments by paying about N54 billion as arrears to pensioners for year 2014, 2015, 2016 and leading up to March 2017 while $4.5 billion has been paid as Paris Club refunds to states; with another $6.8 billion deployed to settle Joint Venture Cash Calls’ obligations.
Speaking at an interactive media session that had in attendance Heads of government agencies under the Federal Ministry of Finance, Mrs Ahmed said the drop in the ECA was due to the withdrawal of $1 billion approved by the National Assembly to fight insurgency, equip the military and other security agencies, as well as the Paris Club Refund to the 36 State governments
“The ECA as at January 2018 had a balance of about $2.45 billion. There were a number of inflows into that account during the course of the year, bringing the total balance to about $3.5 billion as at October, 2018
“We had approval from the NEC to use $1 billion for the needs of the security services and so far, I am sure you all know we have paid for the Super Tucano jets and following that, we have also paid for some critical military equipment, which means that most of the $1 billion has been utilised to date.”
The Minister further explained that there was also a presidential directive, backed by the National Economic Council (NEC) “to pay part of the debt that is being owed by the Federal Government to the states in respect of the Paris Club. That has also been paid from that account. So, to date we have a balance of $631.445 million.”
She also stated that the government is only targeting luxury goods as an avenue for new taxes in 2019, and debunked speculations about the likely hike in the existing taxes, especially as they affect small and medium enterprises across the country.
The Minister, who assured that government would not relent in creating conducive environment for small businesses to thrive as drivers of the nation’s economy, said; “We are not increasing tax rates. We are increasing tax collection by expanding tax base, but this is a decision that will involve the economic management team, FEC and NASS. If anything, we are likely to reduce taxes for the lower groups of businesses, which are the SMEs.
“But we are doing everything we can to make sure that high net-worth individuals are found out and that they pay the right level of taxes that they are supposed to pay.”
According to her, though there are challenges concerning the nation’s fiscal outlook, going forward, efforts are being geared towards prioritizing revenue generation as a veritable source of funding the 2019 budget.
The minister also disclosed that $5.4 billion Paris Club refund had so far been disbursed to states by the Federal Government.
She also explained that government has taken encouraging steps on debts settlement, with total of $5.4 billion paid as Paris Club refund, $1.9 billion for Export Expansion Grant (EEG) and $6.8billion deployed to address Joint Venture Cash Call’s commitment.
On the forthcoming general elections, Mrs Ahmed warned that there will be consequences for Ministries Departments and Agencies (MDAs) found to have diverted public funds for any political activiti
Maintaining that the administration would not tolerate any diversion of public funds for electioneering campaigns, the Minister said: “Let me remind you that this is the administration of President Muhammadu Buhari. The President has directed that every MDA should stay focused on its works. There will be consequences for any agency that gives out money for the purposes of funding elections.”
