The Federal Government on Wednesday gave September 2017 as the deadline to fully bring the payroll of the military into the Integrated Personnel Payroll Information System, IPPIS.
The Minister of Finance, Kemi Adeosun, who disclosed this while briefing State House correspondents at the end of the meeting of the Executive Council of the Federation in Abuja, said the council has already approved two memos to help realise that target.
Mrs. Adeosun said the first memo was approved for the award of a N550 million contract for the procurement of project managers and verification consultants to bring about 200,000 military personnel, consisting army, navy and air force, unto the IPPIS platform.
“We are hoping to bring in all the military personnel by the third quarter of 2017,” she said. “We have assurances about the savings that we typically generate when we bring agencies on IPPIS.
“Generally, when we bring agencies unto IPSS, the payroll goes down. This is part of efforts to sanitise our payroll and make sure that the money we are spending on salaries is very accurate. So, bringing the military on board is a big step in that area,” the minister said.
The other memo, Mrs. Adeosun disclosed, was the approval for credit facilities totalling about $1.3 billion to support the Development Bank of Nigeria, DBN, which commenced operations last week.
The bank, which received its operational license last week, is funded by some long-term loans from some of its development partners.
Part of that funding, the minister disclosed, included a $500 million World Bank loan, repayable over 21 years at concessional rate; $450 million facility from the African Development Bank, AfDB; $20 0million from KFW, and $130 million from the French Development Agency.
Before going to the National Assembly, the minister said, the request to access the monies must be approved by FEC, to enable the bank take off fully and transfer funds to major, small and medium enterprises, MSME, sector.
On the country’s rising debt profile, the minister explained that at the moment debt to gross domestic product, GDP, ratio is just 13 per cent, as against 60 per cent by many African countries and a 100 per cent and above by the West.
She said the purpose for the loans would be to generate growth in the economy, pointing out that government was contemplating additional taxes that would be used to pay back the loans.
“We are very specific on what we are borrowing for. We are borrowing for things that will generate wealth in the economy. Take this loan today, for instance, $1.3 billion, 45 per cent of Nigeria’s economy is SMEs and only 10 per cent can get loans at the moment.
“It is either they don’t have loans and they are asked to go and bring one document and the other that they don’t have, or the interest is so high. In other countries, like Brazil, about 99 per cent of the SMEs have bank loans.
“Majority of smaller businesses in Nigeria today are under-capitalised. So, they can make much more money if they have long term cheap funding. That will make them profitable, and they will then pay more taxes, which will be used to service the loans,” the minister explained.
Mrs. Adeosun said the government has no choice than to borrow, considering that these were concessional loans with interest of two per cent in some cases for 21 years.
“You can’t get that kind of money anywhere in the world. It is going directly to the people that need it,” he said.
