Olawale Edun, the minister tasked with revitalising Nigeria’s economy, continues to prioritise reforms as he grapples with global economic uncertainties and challenges, having laid the groundwork to fully realise the transformative vision and deliver on the campaign promises of the Renewed Hope administration. It is crucial for the government to focus on key broad areas ranging from reform of fiscal and tax policies, which is aimed at improved fiscal governance, to revenue transformation and economic growth.
President Bola Tinubu appointed the investment banker as the Minister of Finance and coordinating minister of the economy last year, leaving him with a mountain to climb. Between 1999 and 2007, when Tinubu was the governor of Lagos, Edun served as the Commissioner for Finance. He has a background in economics, international finance, merchant banking and corporate finance at the national and international levels.
Additionally, he began working with the World Bank/IFC in Washington, DC, under the esteemed Young Professionals programme. He worked on economic and financial plans at the World Bank for several nations in the Far East, Latin America and the Caribbean. Edun has been Chapel Hill Denham Group’s chairman since March 2008. Upon his return to Nigeria in 1989, he co-founded and held the position of Executive Director of Stanbic IBTC Plc (previously Investment Banking & Trust Company Limited). He founded Denham Management Limited in 1994 which later merged with Chapel Hill Advisory Partners to become Chapel Hill Denham Group, a leading independent investment banking firm. At the time of the merger in 2008, the company had shareholders’ funds in excess of N9bn.
While serving as the Lagos finance commissioner, he was credited for being instrumental in a monumental increase in the state’s revenue. However, certain unique ideas were instrumental in achieving this feat. Commitment to technology helped to increase revenue generation and block loopholes: Total computerisation of the operations of government, reliance on the private sector, and private investment to drive the economy, as well as efficient use of the financial markets. Edun played a part in the design, and implementation of innovative, home-grown technology-driven solutions that increased the resources available to the government, grew the revenue in large quantities, and thereby gave the government the wherewithal to spend on infrastructure, social services and job creation.
It is in view of all these that he was saddled with the responsibility of championing unprecedented economic growth and stability which the nation has witnessed as both finance minister and coordinating minister of the economy. He has been at the forefront of transformative policies that have strengthened our financial systems, promoted sustainable development, and re-engineered the government expenditure process to achieve full visibility of transactions and to foster a resilient economy.
The key achievements to date of Edun include fiscal and tax policy reforms which were geared towards improved fiscal governance, revenue transformation, and economic growth. The new national fiscal policy is in the final stages and is focused on streamlining taxes, increasing collection/compliance efficiency and promoting an efficient incentive framework.
In terms of expenditure control, Edun re-engineered the government expenditure process to achieve full visibility of transactions. Under the 2024 capital budget, payments shall be made directly to contractors, suppliers and other service providers. The Federal Government has also enhanced the import duty exemption certificate platform to include monitoring and evaluation.
Another achievement of Edun is increased revenue, with oil production reaching the 1.69mbpd area in March 2024 due to improved security. The Federal Government retained revenue from ministries, departments and agencies and Federal Government-owned enterprises has substantially increased. The Federal Government also earns forex income under the new revenue model.
The Federal Government, via the Debt Management Office, raised N4.8 trillion from domestic capital markets to repay outstanding obligations to the Central Bank of Nigeria. An additional N2.5 trillion is to be repaid from proceeds of further issuance of government securities, bringing the outstanding balance to about N2 trillion.
Through the issuance of government debt securities by the DMO at higher interest rates that provide better risk-adjusted returns to investors, the finance ministry has supported monetary policy authorities in attracting foreign portfolio investments and stabilising the exchange rate of the naira. Edun has made sure there is active coordination between the fiscal and monetary authorities to ensure the effective transmission of monetary and fiscal policies in line with the economic vision of Mr President.
Launched by Mr President, the National Single Window is an e-community platform for trade facilitation and import administration. Once fully implemented, it is expected to generate an annual economic benefit of approximately $2.7 billion. The finance ministry under Edun has provided from internal finances, critical initial funding to kick-start major infrastructure projects such as the Lagos -Calabar coastal project. It will interest you to know that the finance ministry is partnering with government agencies and the private sector to boost investment and provide 25-year low-interest rate mortgages. It is anticipated that an estimated N2 trillion from institutional investors will be mobilised for infrastructure and housing sectors.
The finance ministry, based on the leadership of Mr President, has actively engaged with a broad range of international investors from the Middle East, Europe and India to showcase the reformed economic policies of the Federal Government. It was anticipated that well-advanced discussions with investors from the Middle East would result in definitive investments in the near term. The finance ministry has played a critical role in strengthening the social protection system- by reframing the process and administration of the direct benefit transfer programme: the ongoing transfer of up to N75,000 to approximately 15 million households using unique identifiers to improve transparency and limit fraud. Approximately 3.2 million beneficiaries have already been funded.
Intervention funding by facilitating the funding of critical special intervention programmes has gone up to N500 billion: N100 billion funding for the procurement of CNG-fuelled buses and supporting infrastructure, N200 billion for food production and N200 billion for SMEs for production and nano grants for small businesses.
Revenue generation from the Nigeria Customs Service increased to N3.2 trillion in 2023 and N1.30 trillion in Q1 2024. The Federal Inland Revenue Service achieved 107 per cent of the 2023 revenue target by collecting N12.36 trillion. Its 2024 first-quarter revenue of N3.94 trillion is 56 per cent greater than the same period in 2023. Revenue collection by the Office of the Accountant General of the Federation from the Federal Government-owned enterprises increased from N2.85 trillion through the automation of the deduction process.
The finance ministry played a lead role in implementing the presidential Compressed Natural Gas Initiative, including developing appropriate standards, securing tax and duty waivers, launching pilot conversion centres across each geopolitical zone, and ordering over 44,000 key assets (CNG vehicles, tricycles and conversion kits etc).
In conclusion, the finance ministry led the effective representation of Nigeria’s finance-related interests at various fora including the World Bank/ IMF annual and spring meetings, G20, etc. Where appropriate, the ministry took the leadership position by acting as a voice for Africa’s interests. All these have been achieved during the tenure of Edun as finance minister.
