PRESENTATION OF THE

FEDERAL MINISTRY OF

FINANCE

Federal Republic of Nigeria

MAY, 2012

PRESENTATION OUTLINE

• INTRODUCTION

• THE MINISTRY’S MANDATE AND STRUCTURE

• OUR SCORE CARD’s PRESENTATION FORMAT:

OUTCOME KEY PERFORMANCE INDICATORS

HIGHLIGHTS OF THE FMF CORE ACTIVITIES AND INITIATIVES

OUR ACHIEVEMENTS

NEMT AND EMITs’ INITIATIVES – THE JOURNEY SO FAR

CONCLUSION

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INTRODUCTION

• FMF Score Card, in line with the Ministry’s agreed Key Performance indicators (KPIs), with respect to the Transformation Agenda

• The focus is on major activities and initiatives undertaken between October 2011, and March 2012

• Capture of the 4th Quarter activities was due to the extension of the 2011 Capital Budget to 31st March, 2012.

• Our Score Card encompasses initiatives and activities of NEMT/EMIT, the Core Departments of FMF and Extra- Ministerial Departments and Agencies under the Ministry’s supervision

• Overall Performance- Above Average

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MINISTRY’S MANDATE AND STRUCTURE:

MANDATE • Administration and control of

the finances of the Federal Government

• Overall management of the economy

• Mobilization of external and internal resources for development purposes

• Coordination of revenue allocations to the three tiers of Government: Federal, States and Local Governments and other statutory transfers

STRUCTURE:

Five Core Departments

• Economic Research and Policy Management (ERPM)

• International Economic Relations (IER)

• Home Finance

• Human Resource Management

• Finance and Accounts

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FMF’s EXTRA-MINISTERIAL DEPARTMENTS, PARASTATALS AND AGENCIES

• Budget Office of the Federation (BOF) • Office of the Accountant General of the Federation (OAGF) • Nigeria Customs Service (NCS) • Federal Inland Revenue Service (FIRS) • Debt Management Office (DMO) • Securities and Exchange Commission (SEC) • Investment and Securities Tribunal (IST) • National Insurance Commission (NAICOM) • Nigeria Deposit Insurance Corporation (NDIC) • Assets Management Company of Nigeria (AMCON) • National Economic Reconstruction Fund (NERFUND) • Nigeria Export and Import Bank (NEXIM)

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FMF AGREED OUTCOME KEY PERFORMANCE INDICATORS (KPIs)

FISCAL BALANCE

EFFICIENT FINANCIAL

MANAGEMENT

BUDGET PERFORMANCE

ACHIEVING MORE EFFECTIVE

COORDINATION

CONTRIBUTIONS TO FINANCIAL

SYSTEM STABILITY

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FISCAL BALANCE: Ensuring Progressive Decline in Fiscal Deficit

• Ms to Federation account

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Fiscal deficit decreases from 2.96% of GDP in 2011 to 2.85% in 2012 budget

• Deficit within the 3% of GDP and in line with FRA

• Recurrent spending trending downwards from 74.4% in 2011, to 71.5% in 2012

Reducing Domestic borrowing from N852.27bn in 2011 to 744.44bn in 2012

• Intensifying revenue generation and collection by MDAs

• Improving remittance of MDAs’ internally generated surpluses

Surpassing Revenue targets: 1st. Quarter Score Card!

•FIRS: Fourth Quarter from (Oct – Dec) 2011 stood at N1, 271.0538 trillion which was 39.71% higher than the Federal Government quarterly target revenue. First quarter indicates total revenue collection of ----as against budget projection of --------------

•NCS : 1st. Quarter 2012 collections totals------------- as against ------- in the corresponding quarter of 2011

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EFFICIENT FINANCIAL MANAGEMENT: KEY PERFORMANCE INDICATORS

Bridging the gap between aggregate

expenditure outturn and originally approved

budget

2012 Budget parades comprehensive

information

- Already put in public domain and easily

accessible

- FAQs published

-Improved transparency in intergovernmental fiscal

relations

– Reduction in FAAC disputes from 9 to 2

-Publication of FAAC allocations

- Debt risk analysis and management extended to sub-

national governments

Policy –based budget process :

Targeted allocations to

priority projects; MTSS approved

BUDGET CREDIBILITY;

BUDGET COMPREHENSIVENESS AND TRANSPARENCY;

POLICY –BASED BUDGETING POCESS;

PREDICTABILITY AND CONTROL IN BUDGET EXECUTION;

ACCOUNTING , RECODING AND REPoRTING;

EXTERNAL AUDIT AND SCRUTINY;

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EFFICIENT FINANCIAL MANAGEMENT: MINISTERIAL PERFORMANCE REVIEW TEMPLATE

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AGREED POLICY AND

PROGRAMME PRIORITIES FOR

2012

AGREED KEY PERFORMANCE INDICATORS

(KPI) FOR 2012 AS RELATED TO THE

TRANSFORMATION AGENDA

1ST QUARTER 2012

ACHIEVEMENTS (NOT

ACITIVITES)

REMARKS

OAGF I) IPPIS: Enrolment of the

remaining MDAs on IPPIS

Platform

No. of MDAs enrolled on IPPIS

No. of Personnel on IPPIS

Amount saved on personnel cost

75 MDAs

94,299

N14,230,825.594

I) Implementation of

Government Integrated

Financial Management

Information System

(GIFMIS)

No. of MDAs integrated on GIFMIS

No. of officers trained on GIFMIS

108 MDAs

421 Officers

28 Trainers

I) Budget Implementation Amount cash backed to MDAs on the 1st

quarter

Amount utilized by MDAs

N151,048,207,741.00

Cannot be determined as

the releases have just

been made to the MDAs

I) Revenue collation and

reconciliation meetings

1. Amount of revenue collated

2. No. of reconciliation

3. No. of revenue collection

defaulting Agencies

N1,552,124.22 billion

2

Nil

Jan & Feb

2012

Jan & Feb

2012

Jan & Feb

2012

EFFICIENT FINANCIAL MANAGEMENT CONTD: Accounting Recording and Reporting

• Budget implementation monitoring, 2011 third quarter published

• Quarterly and Annual Reports being regularly published by FMF

• External Auditors engaged for forensic Audit of key revenue generating MDAs

• External Audit of Oil and Gas subsidy

• Monthly submission of progress reports by Core Departments and Agencies

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EFFICIENT FINANCIAL MANAGEMENT

• Ensuring Debt Sustainability; Nigeria’s External Debt Stock: The bulk of the External Debt is concessionary

• Nigeria’s external debt stock stood at US$5,633.71million at the end of September, 2011 compared to US$5,398.04million as at the end of 2nd Quarter, 2011, representing an increase of US$235.67million or 4.36% due to additional disbursements on the existing loans and exchange rate variations.

• Multilateral debts constituted the major part of the total debt at US$4,545.18million or 80.68% of the entire external debt. Non-Paris Club Bilateral and Commercial debts – US$588.53million or 10.45% of the total and ICM debts consisted of US$500.00million or 8.87% of the total external debts.

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HIGHLIGHTS OF 1ST QUARTER REPORT (2012); NEMT/EMIT

JOB CREATION

YouWiN! The Youth Enterprise with Innovation in Nigeria (YouWiN) program • Launched by the President in October 2011 • Assisting young entrepreneurs (under 40 years of age) to start or

grow their businesses, • Providing training, mentorship from major private sector players,

and funding. • Project being spearheaded by the Federal Ministries of Finance,

Youth Development and Communication Technology, with support from the World Bank, DFID, and private sector organizations, like Julius Berger, First Bank and Stanbic IBTC.

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National Economic Management Team: Refocusing the Economy

You Win AWARD

PRESENTED TO 1200 YOUTHS SURE-P

Sovereign Wealth

Fund

CIVIL SOCIETY RETREAT

The Public Works

Programme

POWER SECTOR

RETREAT

AVIATION SECTOR

RETREAT

Retreat with the Private Sector

Port Reform

Credit guarante

e to banks

Re-directing Credit to

Key Sectors

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“YouWiN!”Where we are!

1200 winners have emerged top class, out of the 6000 selected youths

80,000 to 110,000 sustainable jobs for their fellow youths to be created over the next 3 years.

Awards ceremony already hosted by My President in April

2012. Winners in final preparation of sites and awaiting fund

disbursement of fund

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“YouWin” ! Benefits • Great Benefits! A grant of between N1 million and N10 million from the government,

based on their proposed business plan, to support their equity contributions

Introduction to banks for access to credits. Further training, mentoring and linkages with more established

entrepreneurs and businessmen UK’s School for Start-ups to support the mentoring programme, FATE Foundation, WIMBIZ, etc to support SMEDAN to collaborate in the monitoring and mentoring Winners whose businesses are not registered with the Corporate

Affairs Commission will be supported to incorporate them legally CAC partnering with Federal Ministry of Finance in this respect Company website to be facilitated by the Federal Ministry of

Communication Technology

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The Public Works Programme

Creating jobs for unskilled youths ! Launched by Mr. President on Monday, February 13, 2012 Fourteen (14) States benefitting Seven (7) out of the fourteen (14) states, already have good

programmes for the unskilled Progamme, targeted at key areas, such as the North East

Zone Targeting youths and vulnerable people, like the disabled

persons Addressing poverty and resultant security challenges PWP, to create about 370,000 jobs each year in the next 3

years

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The Sovereign Wealth Fund – Where we are!

• National Sovereign Wealth Investment Authority (NSIA): the Ministry has commenced the operational and administrative set up process for the NSIA

• Start-up funds of one billion dollars has been set aside for the NSIA in an interest yielding account at the Central Bank of Nigeria

• An Executive Nomination Committee (ENC) of six eminent Nigerians (one per geo-political zone), as required by the NSIA Act 2011, already constituted

• Messrs KPMG has completed a transparent and merit-based selection process for the Executive Team of the Board of Directors (i.e. the Chief Executive Officer (CEO), the Chief Investment Officer (CIO) and the Chief Risk Officer (CRO)

• On the recommendation of the Minister of Finance, the President would appoint the Board of Directors

• President to appoint independent Governing Council members, subject to senate confirmation

• Operational set-up of the NSIA soon to be completed

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National Economic Management Team - Other Initiatives

• Organized a “Presidential Retreat with the Private Sector” from 12th -14th October, 2011 on National development

• Commenced Sector Retreat for key sectors of the economy, including: Power, Aviation, Housing, Transportation, Agriculture, Education and Petroleum

• Port Reform :

Reduced number of agencies operating in the ports from 15 to 7

Commenced 24 hours ports operation as against previous 9am to 5pm regime;

Clearing time reduced from 39 days to 7 days – target remains 48 hours

Ports decongestion progressing – 2,080 out of 5,000 overtime containers, already removed

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NEMT/EMIT Initiatives contd.

Re-directing Credit to Key Sectors • Significant progress had been made in re-directing credit to key

sectors like agriculture, power and aviation sectors and SMEs at single digit interest rates

• Credit guarantee to banks (on a risk sharing basis), to support a N30 Billion programme to supply seeds and fertilizers to farmers

• The financiers granting loans to the Seed Companies and Agro-dealers at a fixed rate of 15% p.a. but under an interest draw back arrangement to charge at a single digit interest rate of 7% p.a.

• Balance of 8% p.a. to be claimed from escrow-account with the Central Bank of Nigeria (CBN) under the Terms of an Escrow agreement to be executed by the CBN, FMARD and the banks

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MOBILIZING FOREIGN RESOURCES FOR DEVELOPMENT PURPOSES

ECOWAS Bank for Investment and Development (EBID):

• Nigerian appointed new President of the Bank

• Banks Board of Governors approved increase of the bank’s authorized capital of UA 603 million to UA 1 Billion

• Facilitated the ratification by Nigeria of 40 out of 54 number of Protocols and Conventions signed from 1978 to 23/3/11

• Facilitated the achievement of three out of the four primary convergence criteria

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MOBILIZING FOREIGN RESOURCES FOR DEVELOPMENT PURPOSES CONTD

AFRICA FINANCIAL INSTITUTIONS

• Facilitation of Nigeria’s payment US$17.3 million and US$17.5 million towards the WACB Capital and Cooperation Funds (CF) respectively remaining an outstanding balance of US$10.6million for the WACB capital and US$11.4 million for the CF;

CORE PROGRAMMES • Participated in the negotiation of ADF – assisted

Zaria Water Supply Expansion and Sanitation Project held in Tunis, Tunisia, from 26-27 January, 2012

• Payment of US$40,379,277.80 to ADB on GCI-VI in February, 2012. The amount was paid in line with the Federal Government’s objective regarding the ADB goal

• Approval of USD30 million NTF facilities to various African Countries. The above amount was approved by the Federal Government as part of its commitment to the project

• Participated in the supervision mission of the Nigeria FADAMA Development Project II (Kogi, Kwara, Katsina and Plateau) from 14th – 29th February, 2012

• Bauchi State 120MW Combined Cycle IPP Phase Approval of Finance/Sovereign Guarantee for a Concessional Loan of USD171, 000,003.00 by the FGN from the EXIM Bank of China, was conveyed to the State

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BUDGET PERFORMANCE Revenue Performance A disaggregation of the component of the retained revenue in 2011shows performance as follows: • The launching of the Government Integrated Financial

Management Information System (GIFMIS) and trainings of MDA Officers and Staff of Federal Pay Offices on the new GIFMIS application started in year 2010 and is still ongoing.

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Budgeted NBillion

Actual NBillion

Performance %

Total inflow 3,334.50 3,082.05 92.42

Mofi Revenue:- In 2011, the FGN Investments’ yielded the total sum of N

48,723,208,268.32 in Dividend, Operating Surplus, Directors Fees, Spectrum Fees, rent, and Privatization Proceeds which has been transferred to the CRF

Independent Revenue:- Two Revenue Monitoring exercises were conducted on MDAs

both within and outside Abuja. A total no. of 217 MDA were covered outside Abuja and the total sum of N18,639,627,755.07 was generated

The sum of N 17,862,333,814.87 was remitted and receipted into CRF leaving a balance of N777,293,940.20 as unreceipted/unremitted to be recovered in year 2012

Similarly, 146 MDAs were covered within Abuja and the total sum of N79,247,253,577.22 was generated. Out of the above, the sum of N60,978,142,219.91 was remitted with CRF while the sum of N18,269,111,357.30 was outstanding

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Oil And Gas Revenue:- • Oil and gas Companies were issued with 254 no. of Treasury

receipts for the period January – December, 2011. The total sum of $2,768,661,578.52 and N417,486,479,425.63 were realized as Royalties on Crude Oil, gas Flared Penalties, Rent and Miscellaneous Oil Revenue. Reconciliation Meetings were successfully hosted preparatory for FAAC Meetings

Recovery Of Trapped Government Funds:- • As a fallout of 2005 banking reforms, the Department set up a

unit with a mandate to recover government funds trapped in 11 liquidated commercial banks which were acquired by 4 viable existing banks, Mainstream bank, Zenith bank, ECO Bank and United Bank for Africa (UBA)

• A total sum of N70,820,411,174.36 was public depositors fund trapped. Reconciliation concluded with NDIC revealed that N1,730,384,332.62 belongs to the Federal Public depositors while the balance belongs to States and Local Government depositors. The sum of N85 million has been reconciled and transferred into CRF

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NIGERIA CUSTOMS SERVICE (NCS): Generating Revenue and Facilitating Trade

Total revenue collected in 2011 wasN741.83 Billion,

- out of which, Federation account was (N430.68 billion)

and Non-Federation account (N311.14 billion);

• Increased anti-smuggling activities which resulted in seizure of 5, 748 goods including textiles, poultry, used compressors, furniture, general goods etc amounting to a total value of N8,428,326,774.00K from January and December, 2011.

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FIRS: POLICY ISSUES:

• Personal Income Tax amendment bill 2011 signed by Mr. President • Transfer Pricing: Draft regulation developed • Construction of FIRS Corporate Headquarters: FEC approval

obtained for consultancy on architectural design • Self Assessment Project – approved by CME/HMF (democratized

tax assessment and assessment is now cost reflective) • Waivers on Taxes and Bonds – approved by the President (taken

care of the low return on investment in Bonds ; reducing cost of funds and enhancing business environment)

• Regulation on Non-Governmental Organization (NGOS) and • Infrastructure Relief - approved by the President, (boosting infrastructural investment, particularly, in remote areas of the country)

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CONTRIBUTIONS TO FINANCIAL STSTEM STABILITY : NIGERIA DEPOSIT

INSURANCE CORPORATION (NDIC):

Collaborating with CBN and Engendering Confidence in the Banking System

Deposit insurance coverage provided to:- Twenty (20) Deposit Money Banks (DMBs), 882 Micro-Finance Banks (MFBs) and 100 Primary Mortgage Institutions (PMIs).

Joint Routine Risk-Based Examination: 16 non-intervened banks examined in

collaboration with the CBN Risk Assessment examination of the 24

Deposit Money Banks (DMBs), with CBN Routine examination of Micro Finance Banks

with CBN

The cumulative recovery for the banks in liquidation rose from N21.756 billion in 2010 to about N22.158 billion in 2011, representing an increase of about 2.0%

N8.33 million recovered to date from closed Microfinance Banks (MFBs)

ROUTINE EXAMINATION • Completed the examination of 159

Microfinance Banks (MFBs) • Completed and issued out

examination reports for 148 MFBs • Orderly and efficient closure of failed

institutions. With minimal disruption to the banking system

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Insured and Uninsured Depositors Paid For Banks Closed on or before 2006

S/N Particulars 2001 (N’billion)

1. Insured deposits paid for banks closed before 2006 3.304

2. Liquidation dividends for banks closed before 2006 6.162

3. Insured deposits paid for banks closed in 2006 4.294

4. Liquidation dividends for banks closed in 2006 66.757

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ASSET MANAGEMENT CORPORATION OF NIGERIA

(AMCON): Shoring Up the Banking System

Key activities and initiatives in 2011 Purchase of third tranche of Eligible Bank Asset (EBAs) • Completion of the purchase of Eligible Bank Asset, (EBA) from the

participating twenty two banks ; An addition to second tranches bought in December 2010 and April 2011,respectively

• Total EBA’s valued at N807.9 billion was purchased from the Eligible Financial Institutions at a discounted value of N481.9 billion under the latest acquisition

• The Corporation issued “Series V” Bond face value of N689.2 billion as consideration for the EBAs purchased

• Also, Bond face value of N77 billion (discounted value N54 billion) was issued as Financial Accommodation to Union Bank of Nigeria. This is subject to eventual acquisition by the investor UGPL at agreed terms. Total Board Insurance (fall value) to date stood at N5.464 trillion

• Loan On Board Committee: The Committee has been constituted to retrieving of loans’ files from the banks to facilitate their restructuring, administration and recovery 12 banks have been covered thus covering 54.5%

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AMCON’s Gross Earning in 2011

• Recording of gross earnings of N11.61 billion, N198 million interest incomes on placement, about N1.79 billion interest income on treasury bills. The restructured loans yielded N9.33 billion interest income

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SECURITIES & EXCHANGE COMMISSION: DEEPENING THE CAPITAL MARKET

• The number and value of new issues stood at 63 and N2.076 trillion respectively, inclusive of equity placement of N854 billion to AMCON by two banks. Indicating an increase of 6.78% and 45.38% in number and value of issues respectively compared to 2010 figures

• AMCON registered bonds worth N4.357 trillion in 5 series to purchase the non-performing loans of banks under its N4.50 trillion programme

• 19 New Rules and 9 amendments to existing Rules and Regulation made in 2011

• 17 capital Market Operators registered for various capital market functions

• New Corporate Governance Code lunched in April, 2011

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INVESTMENT AND SECURITY TRIBUNAL (IST):

Sustaining Investors Confidence

Through effective and expeditious adjudicatory processes the IST provides economic justice and remedies to Investors • Creation of Zonal Office and expanding operations : The

Tribunal opened and commenced operations in its Port Harcourt Zonal Office, located within Port – Harcourt Judicial Division of the Rivers State High Courts, thereby bringing justice closer to the real people

• Production of E-publications: The Tribunal has produced the electronic mobile versions of some of its publications for installation on mobile phones, Androids, Symbian and other compatible electronic devices. The e-publications are;

I. E-Guide and reader system II. E-bulletin and III. E-laws Report Converter and reader

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National Insurance Commission (NAICOM):

DEEPENING THE INSURANCE MARKET’S CONTRIBUTION TO THE GDP/GNP

Insurance sector, currently contributes less than 1% to the GDP Implementing the Market Development and Restructuring Initiative (MDRI) Commencement of the enforcement of compulsory Insurance products Intensifying awareness creation Enforcement of Compulsory Insurances provided relief to third parties against

bodily injury or loss of property Strengthening Complaints Redress Mechanism: About 400 Complaints

received in 2010 and over N1 billion paid to insurance’ claimants Improved Transparency and Disclosure in the financials of insurance

institutions with the newly introduced accounting regulatory requirements on insurance, industry receivables

Motor Insurance Database: A Centralized Database Management Project of the Motor Insurance System is currently being developed, to eliminate the malaise of motor insurances

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NATIONAL ECONOMIC RECONSTRUCTION FUND (NERFUND): Creating Jobs, Empowering Nigerians

KEY ACTIVITIES/INITIATIVES

• National Economic Reconstruction Fund (NERFUND) entered into partnership with 11 Agencies in 2011. This was against eight (8) achieved in 2010

MSME-PROJECTS Approved a total of 939 micro projects, valued at N4.5billion in 2011 EMPLOYMENT CREATION IN 2011 3,061 direct and 11,312 indirect employments to be created CURRENT STATUS A total of N1.18billion was already released to 498 projects out of the

approved N4.5 billion 1,541 direct and 6,614 indirect employments to be created via the

disbursed funds LOAN REPAYMENT HIGH RESPONSE RATE Received the sum of N77.64million from 204 Micro projects and the

sum of N207.77million from 9 SME projects in 2011

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NERFUND: DISBURSEMENTS IN 2012

Released the sum of N122.56million for 78 micro projects and the sum of N373.27million for 9 SME projects (Projects located countrywide).

• Extra Budgetary Resources:

• The Fund did not receive any extra budgetary resources in 2011

• Fund granted N2 billion loan in 2010 as SME support by Government

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NIGERIAN EXPORT-IMPORT BANK

Creation of Quality Risk Assets:

• Approved Facilities by the Bank amounted to N2.09 billion; loan disbursements stood at N708.63 million

Aggressive Debt Recovery of the Bank’s Classified/Non-Performing Facilities:

• The Bank recovered the sum of N56.49 million from its loan loss portfolio/non-performing debts

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Intervention to the Entertainment Industry: • Capacity building arrangement made with EXIM bank of India to

replicate the successes of “Bollywood” in the Nigerian Entertainment Industry

• A stakeholder forum organized by EXIM Bank of India for the Nigerian

Entertainment Industry. This was to enable its team to study and make appropriate recommendations on ensuring the success of the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme (NCEILS)

US$200 Million ADB Sovereign Guaranteed Loan: • The Bank facilitating the transaction closure and draw down of the

US$200 million Facility; the loan shall be available principally for all SME’s in all sectors of the economy, with high development impact and significant contribution to value creation, such as manufacturing, agro-processing, solid minerals and services.

• Special Purpose vehicle (SPV): A private transnational corporation to be managed as a private company and with a private sector led Board of Directors, was currently being set up

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THANK YOU

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