Osinbajo insists no MDA exempted from TSA
Just like what the Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, said on September 22, 2015, Vice President Yemi Osinbajo, was on Sunday reported to have debunked claims that some Federal Government Ministry, Department and Agency (MDA) had been exempted from transferring its revenue to the Treasury Single Account (TSA).
Media reports had quoted a circular titled, “Approval to Exempt Some MDAs In line With the E-Collection Mop-Up Exercise,” from the Office of the Accountant-General of the Federation, purportedly granting waivers to 13 agencies described as profit-oriented government business entities, which pay dividends to the Federal Government.
The circular, addressed to the Director, Banking and Payments System Department of the CBN, referenced FD/LP2015/C/ADC/20/1/ /DF, dated September 14, 2015, and signed by M. K, Dikwa, for the AGF, urged the CBN to exempt the accounts of 13 MDAs described as Profit-Oriented Government Business entities whose dividends should be paid into the TSA whenever they are declared.
The affected MDAs are Nigeria National Petroleum Corporation (NNPC), Power Holding Company of Nigeria, Bank of Industry, Nigeria Railway Corporation, Federal Mortgage Bank of Nigeria, Bank of Agriculture, Niger Delta Power Holding Company/National Integrated Power Project, National Communication Satellite Limited, Galaxy Backbone Limited, Ajaokuta Steel Company Limited, Urban Development Bank, Nigerian Export-Import Bank and Transcorp Hilton Hotel.
But while reading the communique at the end of the Monetary Policy Committee (MPC) meeting Number 103 and the fifth for the year, Emefiele said: “No organisation has been exempted from the TSA.”
A report by Reuters on Sunday, quoted Osinbajo as saying there would be no such exemption from the TSA, even as he confirmed that institutions like the NNPC, which indeed, initially sought an exemption, is now partially abiding by the rules.
“I know that even NNPC has complied to a certain extent. I know that they may have some outstanding (revenues). But NNPC has definitely started to comply,” he said.
Also, Osibanjo said the Federal Government was preparing the 2016 budget with the help of the ministries, despite the lack of a cabinet, assuring that “by Tuesday, we will be sending the guidelines to the ministries,” referring to the planned stricter budget rules to fight corruption.
Osinbajo also spoke of plans by the administration to continue restrictions on foreign currency to preserve the country’s currency reserves amid plunging oil revenues.
The restriction on imports of 41 items since June is part of efforts to offset a fall in oil revenues, which has hit public finances and the Naira, despite warnings by manufacturers that some companies might be forced to close plants because they could no longer import raw materials or equipment for production. The Vice President defended the restrictions, saying they had enabled the country’s foreign currency reserves to stabilise but said they were only a short-term measure.
“We want an open foreign exchange market. But that market must be one that has the resources to make it robust and open. So, on long term, we expect that the Central Bank will ease restrictions as we go along,” he told reporters late on Saturday.
Osibanjo also said Nigeria’s economic growth should pick up “a bit” in the next quarter, after halving in the second quarter year-on-year, as power supplies had improved.
“We are well on the way to getting out of the worst part of where we are today,” he said, dismissing fears that the country could slip into recession next year.
Meanwhile, the nation’s foreign reserves declined in the September, shedding $978.784 million or 3.12 per cent from $31.322 billion on August 31 to $30.343 billion on September 30, according to CBN data monitored on Sunday.
On a year-on-year basis, Nigeria’s forex reserves fell by $8.178 billion from $39.521 billion at the end of September 2014.
The Federal Government had through fiscal policies made attempts since 2013 to shore up the foreign reserves to $50 billion, but this has been greatly hampered, with the CBN, since 2014 relying heavily on the reserves to support the Naira that had come under pressure from the falling international prices of crude oil.
Some of the various policy measures introduced by the CBN in recent months to ease the significant pressure on the Naira were the movement of the midpoint of the official window of the foreign exchange market to N168/$1 in November 2014 and the closure of the RDAS/WDAS foreign exchange window in February 2015.
As part of efforts to reduce the pressure on the Naira while preserving the nation’s external reserves, on June 23, the CBN also issued circular excluding importers of 41 selected goods and services from accessing foreign exchange at the Nigerian foreign exchange markets.
Such items, classified as ‘not valid for forex’, cannot be funded at the interbank from proceeds of exports and bureau de change sources.