The Nation Newspaper

Tag: Allocations

  • Seize their allocations?  

    Seize their allocations?  

    Senators say Federal Govt should not release funds to LGs whose officials are not democratically elected

    Impunity reigns at all levels of governance in Nigeria. No branch or level of government is exempted, as express provisions of the 1999 constitution are disregarded and replaced with personal preferences of leaders.

    One area that has stuck out as a sore thumb since inception of the Fourth Republic is the running of local government areas that are regarded as the third tier of government in the country. Whereas the grundnorm states that the acceptable form of administering the closest tier of government to the people shall be by democratically elected officials, governors all too often whimsically dissolve the councils to replace them with cronies, allies and family members.

    The latest example is alleged dissolution of elected council officials in Benue State. Apparently dissatisfied with the fact that those elected to run the councils under his predecessor, Mr. Sam Ortom, were all members of the People’s Democratic Party (PDP), Governor Hyacinth Alia of the All Progressives Congress (APC) was said to have set the machinery for removing them in motion as soon as he took over the machinery of government.

    Speaking on a motion he sponsored at the Senate to empower the Federal Government to withhold allocations due to such local governments, Senator Abba Moro who represents Benue South said flagrant disregard for law, order and protocols by governors should no longer be tolerated. The Senate Minority Leader, supported by former governor of Edo State, Senator Adams Oshiomole, and the Senate Chief Whip, Senator Ali Ndume, both of the APC, want statutory revenue allocations to the Benue local governments being run by caretaker committees seized by the Federal Ministry of Finance.

    This has, however, generated controversies as to the constitutionality of the recommended measure. While almost all agree that governors should not administer the local councils like emperors, there are concerns over the power of the Federal Government to seize the allocations. Section 162 of the constitution stipulates that all funds in the Federation Account should be shared among the three tiers of government and, the local government areas in each state are listed. It is therefore the contention of some experts that under no circumstances should such funds be withheld unless on the order of a court of law.

    Others argue that since the law is that only democratically elected officials should govern local councils as is the case at the federal and state levels, money should not be released to those illegally occupying the offices.

    Governor Alia’s explanation that he did not dissolve the councils but suspended the officials in accordance with a resolution by the state House of Assembly is untenable. No institution or individual deriving its power from the constitution could turn around to violate provisions of the supreme law of the land.

    It may be difficult for the Federal Government to arbitrarily hold on to funds due to some local government areas unless a law to give effect to it is passed by the National Assembly. We therefore advise the federal lawmakers to pass a law to that effect.

    Read Also: Agric revolution will help Nigeria surmount insecurity, poverty – Shettima

    Meanwhile, Governor Alia should reverse his action as it is patently ultra vires. When the constitution is clear in its provisions and intendment, officials of state should not burden the courts with adjudicating such matters.

    To deepen Nigerian democracy, all the people must rally round the local councils. At the heart of  democracy is free, fair and credible election, after which the electorate’s mandate must be respected. It is bad enough that State Independent Electoral Commissions are only independent by name. In practice, they have been reduced to appendages of the ruling party in the states. Even when otherwise respected retired judges of superior courts are appointed the chairmen, they only do the bidding of the government of the day. This is shameful, and the federal legislature has been unable to do anything about it. Earlier attempts to wean institutions, arms and democratic bodies off the clutches of state executives had failed as the state lawmakers were manipulated into frustrating the plans.

    All leaders, especially at the federal level, have a duty to team up with the National Assembly in ensuring that the democratically elected councils survive in the country so that the people may imbibe the electoral principle. It is unfortunate that more than a century after the colonial masters were compelled to bring Nigerians into deciding their own leaders, governors and their cohorts are undermining the process.

    Nigerians have been tolerant of autocracy for too long. Whenever governors trample on voters’ rights, the people should rise up to insist on their due. In the instant case in Benue State, civil society organisations and the general public should prevail on Governor Alia, a Reverend Father, to do what is right and just. President Bola Tinubu who is known to have intervened in political disputes in states within the short period he has been governor should call the governor to order. It is interesting that the resolution passed by the Senate was supported across political divide. It should be obvious to leaders of the APC that while Gov. Alia is a member of the party today, tomorrow is unpredictable. Patriots and nationalists should rise up to fight this battle because it is to lift the banner of democracy across the country.

  • FG should release overhead allocations

    SIR: We urge the president to kindly order the minister of finance to release overhead allocation to Ministries Departments and Agencies (MDAs). We wish to let the president know that the security men and cleaners working for the federal government in ministries, departments and agencies are on contract and not permanent staff and their salary are being paid from overhead allocations. Due to non-release of overhead allocation as at when due, they are being owed six months’ salary presently.  In 2015, the federal government owed them five months’ salaries which have not been paid. Also, in 2016, they are being owed two months.

    I have sent several messages to ministers of finance, labour and information without reply. We are now in yuletide season. It is very unfair to subject these people to untold suffering and hardship. They are dying of hunger with their families and there is no hope of getting these outstanding payments before Christmas and New Year celebration. We passionately appeal to the respective government officials to kindly look into this matter and order the payment of these outstanding salaries without delay.

     

    • Comrade S. D Balogun,

    Apapa, Lagos.

  • Shopping malls: Ogun to revoke unused allocations

    The Ogun State government is set to revoke the shops allocated to some traders in Abeokuta, the Ogun State capital.

    This followed the expiration of the six-month moratorium given to allottees of the recently-built government ultra-modern shopping malls and shops.

    The Senior Special Assistant (SSA) to the Governor on Facility Management, Mr. Segun Adebayo, issued an ultimatum to erring allottees who  failed to put the facility to use eight months after they got the allocation.

    The 72-hour ultimatum to all allottees to move in or risk revocation expired yesterday.

    A statement signed by the Head of Media in the Ministry of Works and Infrastructure, Mr. Ayokunle Ewuoso, said the government could no longer tolerate the lack of commitment by the affected traders. Governor Ibikunle Amosun last March, inaugurated and allocated 1,050 shops and stalls to traders whose shops were destroyed for the construction of roads in Omida, Shapon, Kemta, Itokun and Isele-Igbehin, all in Abeokuta.

    “So, if you are given such opportunity since April and you didn’t utilise it, but only took the allocation and locked up these shops, it means that you are not interested in the shop and allocation,” Adebayo said.

    He said about 40 percent of the  shops had not been occupied, adding that many members of the public have continued to show interest and that the government could not afford to fold it arms and watch it money go down the drain.

    A breakdown of the shops shows that in Omida, 52 shops were allocated while 27 of these remained unused by the allottees; in Imo, six out of 36 allocated are under lock and key.The story is not different in Laderin where only 12 out of the 48 shops has been occupied.

    Kemta-Oloko has just four shops occupied out of the 48 shops allocated. Similarly, in Itoku, of the 130 shops allocated, only 82 have been occupied and opened for business, while Sapon has 45 occupiers out of the 91 allocations with Isele -Igbehin having 37 occupied shops from the 64 already allocated to traders.

  • Most states would have collapsed without FG’s intervention, says Katsina governor

    Most states would have collapsed without FG’s intervention, says Katsina governor

    Katsina state Governor, Hon. Aminu Bello Masari has said that without the intervention of the Federal government, many of the states in the country would not have been able to pay the salaries of their workers and would have collapsed in the face of dwindling oil revenue.
    Speaking at a town hall meeting with Katsina state indigenes resident in Abuja on Sunday, Governor Masari said the intervention of the federal government has helped many of the states to stay afloat as what they get from the federation is not enough for about 27 of the states to pay salaries of their workers.
    The governor said since the present administration in the state came into office, it has received intervention from the federal government on four different occasions to address issues of salaries, gratuity and pension of workers in the state, but lamented that his government is still faced with a huge challenge in terms of funding the operation of the local government system in the state.
    According to the governor, federal allocation to the 34 local government councils in the state is not enough for them to pay salaries of their workers, pointing out that while the councils receive about N3.6 billion monthly from the federations account, their total wage bill stands at about N3.7 billion.
    He stressed however that while some of the local government areas can afford to stand on their own, some others, especially the big local government areas has to rely on others to survive.
    He listed federal financial intervention to the state to include the bailout fund of about N11.8billion, N10 billion special intervention to each of 36 states for capital projects, a monthly intervention of N1 billion to the states to assist the state in the payment of salaries and pension as well as N14.2 billion Paris Club refund.
    He disclosed that N6.7 billion from the Paris Club refund will be used to settle arrears of gratuity and pension of civil servants in the state up to June 2016 and that of local government upto March 2016.
    While lamenting the current situation of things in the state, Governor Masari said presently, the state is ranked third in the national poverty index and seventh in revenue allocation in the country, adding that the state has reason to be in the position it currently found itself.

  • Oyo gets order to release allocations

    The Oyo State government has got a variation order, which  allows allocations for its 33 local governments to be paid directly to them.

    Commissioner for Information Toye Arulogun, in a statement yesterday, said Justice John Tsoho of an Abuja High Court gave the order in a ruling on February 7 in the suit between 15 chiefs from Oyo Town, the government and nine others on the conduct of local government elections.

    Arulogun explained that the order expressly states: “It is hereby ordered that following the understanding reached by the counsel representing the principal parties as communicated to court, Order 4 on the drawn up order of this court dated January 20 is varied as follows: that there shall be no more warehousing of monies and or allocations meant for the 33 local governments by the second, third, fourth and fifth defendants.

    “That such monies and or allocations shall be released directly to the said local governments as constitutionally mandated and that this matter is adjourned till March 22 for report of settlement.”

  • ASUU flays cut in varsities’ allocations

    The Academic Staff Union of Universities (ASUU), Abuja Zone, has expressed displeasure at the cut in allocation for personnel expenditure to federal universities by the Federal Government.

    Its Zonal Coordinator, Prof. Suleiman Muhammed, who briefed reporters yesterday in Abuja, said the cut had adversely affected the union.

    He said the zone comprised University of Abuja, Federal University of Technology, Minna, Nasarawa State University, Keffi and Ibrahim Babangida University, Lapai .

    Muhammed said authorities, such as the Federal Ministry of Finance and the Budget Office, seemed not to understand how the university system work.

    “With deep concern, ASUU-Abuja Zone wishes to bring to the notice of the public the unilateral drastic cut by the Federal Government in the personnel expenditure allocations to federal universities.

    “This ugly phenomenon began in December 2015. One of the federal universities, which received allocation of a little over N336 million in December 2015, has consistently received about N308 million for January through March, 2016,’’ he said.

    The coordinator said the Federal Government could not unilaterally cut workers’ pay, being a signatory to most International Labour Organisation (ILO) conventions.

    He said state governments, and proprietors of state universities, were waiting to copy the Federal Government.

  • 2,660 BDCs get $79.8m CBN’s allocations weekly

    The 2,660 Bureax De Change (BDC) operators are allotted $79.8 million weekly, the Central Bank of Nigeria (CBN) has said.

    Each BDC takes $30,000 weekly, down from $50,000. This followed the approval of over 80 additional BDCs following the expiration of the July 31 deadlines for their regularisation.

    The regulator had pointed out that on the expiration of the deadline on July 31, that it would cease to fund any BDC that failed to comply with the new requirements, adding that “only BDCs that meet the new requirements would qualify to be engaged as agent by the licenced international money transfer operators for inward and outward transfer business in Nigeria’’.

    However, the continuous approval of more BDCs by the CBN, after the deadline elapsed last December, is causing ripples in the subsector.

    Older operators are alleging compromise by the apex bank after it yesterday, and fourth time in a row, raised the number of BDCs that met the regulatory requirement to 2,660.

    President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe,  said the action of the CBN is suspicious.

    He said the group had approached the regulator and complained about the continuous update of operators’ list, which keeps depleting the volume of foreign exchange allocated to operators.

    The CBN, he said, claimed that the newly approved list of members were those that met the deadline, but had their names cut off, until it carried out internal reconciliation.

    The CBN had in February, published a list of 2,586 licensed BDC firms which it said had complied with its new capital requirements of N35 million as at July 31.

    There were 3,208 registered BDCs in the country before the expiration of the deadline. The CBN had in June announced a new minimum capital requirement of N35 million for the operation of BDCs in the country, up from the N10 million it was previously.

    In order to ensure that the forex dealers comply with the new capital requirements, the CBN had extended the deadline to July 31. The forex dealers were previously given a deadline of July 15.

    The apex bank had also said interest would be paid on the mandatory cautionary deposit of N35 million, based on banking industry savings account rate.

  • ‘Three tiers of govt should get their allocations in dollars’

    ‘Three tiers of govt should get their allocations in dollars’

    Renowned Economist Henry Boyo has advocated the liberalisation of the foreign exchange market and advised the Central Bank of Nigeria (CBN) to stop substituting naira allocations for dollar derived revenue. Boyo, who spoke with LEKE SALAUDEEN, says that is how to revive the economy and diversify it.

     

     

    What is wrong with the economy?

    Our monetary framework is faulty. There is urgent need for a fundamental restructuring of our country’s monetary framework so that our economy can be rapidly transformed to induce vast expansion in industrial activity with single digit lending rates, increase employment opportunities, lower single digit of inflation and a market determined exchange rate mechanism.The government’s efforts to achieve these parameters, reduce poverty and enhance the social welfare of our people in the last 30 years have evidently failed woefully.

    Indeed, our economy appears trapped in a paradox of deepening poverty with increasing export revenue. It is inexplicable, for example, that Nigeria became listed amongst the poorest nations in the world. A careful analysis of the process of infusion of our export earnings into the economy will show that this anomaly was made inevitable by the Central Bank’s practice of capturing export dollar revenue and substituting naira at its unilaterally determined rate of exchange before payment of consolidated naira allocations to the three tiers of government.

    Can you explain further the dangers inherent in the CBN’s practice of substituting dollar earned revenue with naira allocation to the three tiers of government?

    I will narrate it this way. Buyers of Nigeria’s crude oil pay millions of dollars into the account of CBN for crude oil lifted from Nigeria. For example, $1 billion is paid to CBN account. The CBN unilaterally adopts an exchange rate for conversion of the $1 billion received from buyers of Nigeria’s crude. Consequently, the apex bank unconstitutionally prints N150 billion in place of the $1 billion crude oil revenue. CBN now pays the three tiers of government with over N150 billion—an exchange rate of N150 to a dollar. The three tiers of government now deposit the billions of naira into their respective commercial bank accounts, for custody even when deposit rates attract less than two per cent.

    The additional deposits of billions of naira supplement the existing cash position of the banks and enhance their ability to embark on additional liberal credit expansion. Thus, the credit creation capacity, i.e. the money available for lending becomes multiple times the actual cash available in the vaults of commercial banks as the banks leverage on the hundreds of billions of cash inflow from CBN per standard banking practice; this is what the CBN decries as excess liquidity cash in the system.

    Consequently, CBN and the Debt Management Office (DMO) approach the banks to reduce the amount of naira cash and the credit capacity of the banks. Thus, CBN decides to borrow money from the banks by selling treasury bills with relatively mouth-watering interest rates. The DMO also enters into the market to borrow from the banks for intangible and inconsequential purposes. As a consequence, CBN, the erstwhile cash provider becomes a major borrower. The result is the widespread incidence of factory closures and rising unemployment as industrialists, service providers and small and medium businesses are faced with excruciating credit crunch, high interest rates and avalanche of cheap smuggled imports.

    What would you recommend in place of the present system whereby the Central Bank dominates foreign exchange market?

    The sensible thing for the government to do is to liberalise the foreign exchange market. It is very crucial to Nigeria’s economic growth. CBN should adopt the instrument of dollar certificates strictly not cash (i.e. dollar denominated warrants in place of the usual Naira denominated warrants for dollar derived revenue) for the payment of monthly allocations to the three tiers of government for all dollar revenue. This arrangement replaces the present destructive system where CBN unilaterally determines the exchange rate and creates more naira in substitution for dollar revenue only to decry excess liquidity in the system. Under the new arrangement, the three-tier system would present their dollar certificates to their respective banks for exchange to naira, as the dollar certificates are not legal tender, and so cannot be used for every day transactions. If this system is adopted, there will be no excess cash in the bank system, as we would no longer be inundated with the huge naira allocations usually paid into the bank accounts of the three tiers of government every month by the CBN. The result is that we would have more dollar certificates chasing a limited supply of naira. The stronger naira notes would translate into cheaper petrol prices. Indeed, a petrol sales tax of 10 per cent or more can be levied on the price of each litre of fuel sold. In spite of the cheaper petrol price, the fuel will sell in a fully deregulated market. The government can collect up to N100 billion from petrol tax every year from the 30 million litres sold daily.

    The absence of subsidy on petrol prices will also save the government about N600 billion a year; this amount can be used to build up our infrastructure, such as schools, hospitals, power and roads instead of paying the same sum as subsidies to fuel marketers. The government will also save another N600 billion or more, as the CBN and DMO will no longer have to borrow from the commercial banks to reduce the scourge of excess liquidity that has always plagued the system, when CBN substitutes naira for dollar derived revenue. The CBN will remain the custodian of our dollar earnings, as the weekly auctions of dollar reserves and its attendant round-tripping and dispersal into foreign accounts will no longer be possible.Our foreign reserve base will consequently remain buoyant and less vulnerable to speculative dollar demand. Smugglers and money launderers will have little or no access to easy government dollar funding for their nefarious enterprise and the level of corruption will be reduced.

    The stronger naira exchange will bring down the cost of imported raw materials and machinery, and this, together with low interest rates will energise the industrial and services subsector, and reduce unemployment and insecurity. More operating factories will mean increasing employment and greater consumer demand. The local manufacturers will also be protected by a discriminatory tariff regime to favour patronage of locally produced goods in place of imports. Increased commercial and industrial activities will provide a huge revenue base for government taxes. More workers will inevitably mean more income tax revenue for both state and federal government agencies. The stronger naira will not only bring down the cost of production, but will also reduce annual inflation to not more than two per cent, and consequently increase the purchasing power of lower income group. The increasing job opportunities will increase employment and engender a conducive environment that will reduce strikes and other work stoppages. The enhanced economic growth and improvement in social welfare with increased purchasing power brought about by a stronger naira will begin to reverse the deadly infection of brain drain, as Nigerians in the Diaspora will return home to make valuable contributions and enjoy better life in their fatherland.

    What is the solution to the recurring excess liquidity in the economy?

    The dollars earned from crude oil export belong to the people of Nigeria and disbursement is facilitated by the issue of naira warrants to the accounts of statutory beneficiaries by the CBN. However, the beneficiaries—Federal, state, local governments and corporate bodies—do not currently have the same direct access to their portions of this export revenue as independent private exporters.The dollar revenue is first exchanged into a quantum naira value at a rate unilaterally determined by the CBN without any pretensions to the open market forces of demand and supply before the resultant naira equivalent are paid to statutory beneficiaries who would return to the same CBN to re-exchange their naira for the same dollars if they required foreign exchange for their corporate import needs. A week later the CBN will go to commercial banks to mop up excess liquidity in circulation at a rate determined by the commercial banks. The commercial banks take dollars from CBN in exchange for naira. That is why the banks are making huge profits that they didn’t work for. Henceforth, CBN should stop substituting naira allocation for dollar derived revenue. All beneficiaries—Federal, State, Local Governments and corporate agencies should get their allocation in dollars. There will be no excess liquidity. The bank will start begging the real sector to come and take loan and a stronger exchange rate between naira and dollar will emerge. That is the way to revive the economy and diversify it. With that, subsidy will disappear on its own and fuel smuggling will dry up because it will be too expensive for the smugglers.This is what Zimbabwe did when its economy was in a crisis. At a stage, one Zimbabwe billion dollar was equal to US$1. What the government did was paying workers in dollars. Prices of essential commodities are also paid in equivalent of US dollars. That was how Zimbabwe was able to get out of its economic crisis and stem the spiral inflation.

    What are the likely dividends of the liberalised foreign exchange market you are advocating?

    The main dividends to be derived from the adoption of a liberalised foreign exchange market is the quick evolution of a realistically priced naira that will infuse the positive multiplier effects inherent in a free market economy dictated by the dynamics of demand and supply. Indeed, the defects of the current system —lack of transparency, parasitic chain, price distortion and economic dislocation— would be cleansed by a liberalised market. The inherent features and desirable benefits include a new improved CBN. The CBN would emerge unencumbered by the distraction of foreign exchange hawking and intrigues and assume its role as a patriotic custodian of the naira and a nimble and effective policeman of the money market in line with national aspirations.

    The mirage of excess liquidity whenever the federal pool is disbursed and the regressive reflex of mop-up activity inherent in the current system will disappear forever. In other words, the CBN would not have to plead with beneficiaries of the federation pool to desist from spending their income even when the economy is crying for a dose of public expenditure to stimulate demand and investment.

    The bulk of all foreign exchange earnings will be expended in its original form for the nation’s total import needs, that is, industrial goods, finished goods, contractors’ imports and services. This insulates the economy from a deluge of naira with extensive money creation possibilities by banks as at present. Foreign exchange not it is required for domestic transactions by the governments, public agencies and private sector operators will remain in the owner-establishments’ domiciliary accounts with the CBN and will not be regarded as part of commercial banks’ liquidity base. A substantial proportion of foreign exchange converted into naira for domestic transactions is likely to be taken up by economic operators utilising the naira already in the system. Thus only a small portion of foreign exchange earnings would translate into injection of fresh money.

    Last year, President Jonathan promised that the pains of subsidy removal will disappear within few weeks or months. What can you make out of the president’s pledge?

    President Jonathan made a political statement to assuage anxiety in the land. If we are not careful, subsidy value will exceed 60 per cent of total expenditure in 2013. In 2011, there were underhand dealings in the subsidy arrangement; about N2 trillion was paid off. The government has indicated that approved audited claims exceeded one trillion naira in July 2012. By December 2012 audited subsidy claims would be two to three trillion naira leaving two trillion for both capital and expenditure. There is no way you can resolve fuel subsidy imbroglio unless you re-arrange payment in the country and confront the factors responsible for depreciation of naira.

    The problem of subsidy is not caused by crude oil price, but the exchange of naira. If you spend N3 trillion on subsidy and debt services, where will you get money to improve on the living standard of the people?

    Mr President would have made that promise with the belief of his advisers. Blame the economists in the team for not properly advising him. Reducing capital expenditure by one or two per cent is nothing to celebrate in an economy where corruption consume 30 to 45 per cent of the total value. Increasing Internally Generated Revenue (IGR) to N5 trillion and evolving a mechanism that would plug loopholes are worthy of celebration.

    The President also promised that the economy will be repositioned within a short time. What is your take on this?

    Jonathan is not an economist. Because of his inadequacy, he hired world class economists to advise him. If they don’t tell Mr President that the problem in the economy is excess liquidity, what do you expect of him? If the experts failed to tell the President the truth, he should ask what causes excess liquidity. The total money for spending by the government is N5 trillion. It is not a lot of money. The excess is the result of subsisting naira allocation for dollar derived revenue. The government spends money to encourage increase in investment and payment. It makes it possible for people to buy more and create demands for goods. Excess liquidity is counter-productive. We can’t get out of the problem unless the President says enough is enough.

    Government officials say the economy is growing at seven per cent. Do you agree?

    Yes, it is possible for the economy to grow at seven per cent. Crude oil provides 80 per cent or more of the national revenue. If the price of crude continues to rise and production increases, the gross domestic product (GDP) will also increase. But when it is infused into the economy in obtuse manner, it becomes destructive to the real sector. Our income is dollar derived. There is growth in external reserve and ability to pay. When dollar increases, it creates more excesses in liquidity.

     

  • Fed Govt slashes MDAs’ allocations

    Fed Govt slashes MDAs’ allocations

    The first victims of the signing of the 2013 Budget by President Goodluck Jonathan will be Ministries, Departments and Agencies (MDAs) with overlapping functions.

    The Federal Government has started implementing the Steve Oronsaye Report, which proposed the scrapping or merging of such MDAs. To this end, in the 2013 Budget, the Federal Government has reduced allocations to agencies with duplicate functions.

    The expected result of this budgetary slash for the affected MDAs will be a saving of about N100 billion in 2013, the Coordinating Minister for the Economy and Minister for Finance Dr. Ngozi Okonjo-Iweala said yesterday at the 2013 Budget briefing in Abuja.

    Mrs. Okonjo-Iweala said: “We are continuing the roll-out of Integrated Personnel Payment Information System (IPPIS)across all MDAs which will result in savings in personnel costs. In the spirit of the Oronsaye Report, we have started trimming down allocations to agencies with duplicate functions. For the 2013 Budget, this resulted in about N100 billion of savings, and we hope to have even greater savings in 2014.”

    However, since some of these agencies with duplicate functions were established legally, the minister said the executive “will require the support of the National Assembly in reviewing the relevant legislations before we implement the rationalisation exercises”.

    Giving a breakdown of the assumptions of the 2013 Budget, the minister said: “The gross federally collectible revenue is projected at N11.34 trillion, of which the total revenue available for the Federal Government’s Budget is forecast at N4.1 trillion, representing an increase of 15 per cent over the estimate for 2012.”

    Some key allocations in the controversial budget are: critical infrastructure (including power, works, transport, aviation, gas pipelines, and Federal Capital Territory) – N497 billion; human capital development(i.e. Education and Health) – N705 billion; and Agriculture/Water Resources – N175 billion.

    The minister said there was no tinkering with the over N950 billion allocated for national security purposes, comprising of: N320 billion for the Police, N364 billion for the Armed Forces, N115 billion for the Office of the National Security Adviser, and N154 billion for the Ministry of the Interior.

    For 2013, the minister said the “SURE-P programme has a projected allocation of N180 billion, augmented by the 2012 unspent balances of N93.5 billion. This amount will be used to make further progress in the provision of social safety net schemes, maternal and child healthcare, youth development and vocational training for Nigerians.”

    In the budget, fiscal deficit is projected to improve to about 1.85% of GDP compared to 2.85% in 2012. This, Okonjo-Iweala, said “is well within the threshold stipulated in the Fiscal Responsibility Act, 2007 and clearly highlights our commitment to fiscal prudence.”

    While non-oil revenue is projected to sustain its growth in 2013, the Federal Government appears not to be happy with the performance of the Federal Inland Revenue Service (FIRS), which it said only “worked hard to achieve a 20 percent growth rate in non-oil tax revenues between 2007 and 2012.”

    Though the minister commended the FIRS for this effort, she said she believed “that the gap between non-oil tax revenues currently collected and the full potential revenue remains significant.”

    Therefore, government, she said, “will support FIRS this year to embark on further reforms such as improving auditing checks, increasing controls on exemptions, and enforcing repayment of arrears. Similarly, we will also pay greater attention to increasing internally generated revenues, and work with government entities to increase their remittances to the treasury.”

    On debt management, Mrs. Okonjo-Iweala said the Federal Government is “committed to the implementation of a strong strategy for managing domestic debt which progressively scales down both the stock and flow of our domestic debts.”

    To this end, she disclosed that the Federal Government “recently paid down N75 billion of maturing debt obligations last week, and have also set aside N25 billion in a sinking fund to be used for retirement of maturing debt obligations in the future.”

    She added that “government has further reduced annual domestic borrowing to finance the budget deficit from N852 billion in 2011, to N744 in 2012, and now to N577 billion in 2013.”

    In addition, the government is “making concerted efforts to defray the debts of our foreign missions, by making provision of N13 billion in the 2013 Budget to help clear accumulated debts as at the cut-off date of June 2012.”

    Government has also established a committee under the Chairmanship of the Minister of Foreign Affairs, which will work out a system to better manage the assets of foreign missions, the finance minister said.

    Government’s strategy in 2013 towards addressing the nation’s crippling infrastructure is to prioritise infrastructure investments in the budget, and also to leverage additional external financing for infrastructure investments in the country. As a result, Budget 2013 has some important infrastructure projects in the transportation sector, such as the second Niger Bridge.

    Mrs. Okonjo-Iweala said government plans “to augment our domestic resources with a proposed $1 billion EuroBond as well as a Nigeria Diaspora Bond which will harness savings from Nigerians abroad”.

    These additional financial resources will be invested in various infrastructure projects such as building the country’s gas to power infrastructure. The government also plans “to use Public Private Partnerships (PPPs) aggressively, working with the Sovereign Wealth Fund which will attract co-investors from home and abroad such as pensions funds, institutional investors and so on.”

    To energise the construction sector, the minister stated that the Federal Government has decided to develop “a private sector led Nigerian Mortgage Refinance Company to help provide long-term mortgages to help kick-start our housing and construction sectors.”

    On the performance of the 2012 Budget, the minister disclosed that her ministry “succeeded in releasing N1,017 billion for the implementation of various capital projects, and successfully cash-backed N739 billion. By the end of 2012, MDAs had utiliSed N686 billion or 92.8 per cent of the total amount cash-backed.”

    The reason for this performance, she said, was because “the 2012 Budget was approved late, and so implementation occurred over a compressed time schedule.”

    The budget, she said, has buffers against external shocks, such as the Excess Crude Account rising on the back of prudent oil revenue management and currently stands at about US$9 billion; and an external buffer for foreign reserves, which increased by $12 billion since 2011 and is now at about US$47.56 billion as at 4 March, 2013, the highest level for almost 3 years.

  • Bayelsa account for monthly allocations

    The Bayelsa State Government has accounted for its federal allocation for September and October.

    It said it received the N25 billion for both months.

    Deputy Governor Gboribiogha John Jonah spoke in Yenagoa, the state capital, during the Transparency Initiative Briefing.

    Jonah said in September, the state got N2 billion from statutory allocation and N12 billion from gross, including over N8 billion from derivation and N532 million from Value Added Tax (VAT).

    Flanked by Governor Seriake Dickson and other members of the State Executive Council, Jonah said the state government got N311 million refund from the Nigeria National Petroleum Corporation (NNPC) and N768 million from augmentation.

    The deputy governor said the state got N509 million refund from excess crude savings and N187 million refund from the revised 13 per cent deduction from August, 2008 to 2009.

    He said the deductions amounted to N3 billion after Federation Accounts Allocation Committee (FAAC) deductions.

    Of this figure, Jonah said Bond deductions stood at over N1 billion while foreign loans came up to N12 million.

    He said the state paid N83 million as its Commercial Agricultural Credit Scheme obligation.

    The deputy governor said N86 million was refunded for overpayment and the Net inflow from FAAC after deductions amounted to N9 billion.

    He said IGR from August increased to N479 million, leaving a balance of N903 million.

    Jonah said the total fund available is N9 billion.

    On expenditure, he said bank loan repayment gulped over N1 billion and the Federal Inland Revenue Service deductions N200 million.

    Jonah said over N3 billion was spent on salaries of civil servants; over N249 million on that of political appointees.

    He said N1 billion was paid as monthly overhead.

    Jonah said monthly standing approvals stood at N194 million with gratuity payment coming up to N250 million, totaling N6 billion.

    Giving N26 billion as balance brought forward from August, 2012, the deputy governor said total funds available to the government as at September 30 was N22 billion.

    In October, Jonah said the state got N2 billion from the FAAC; N9 billion from derivation; N564 million from VAT, N1 billion from the SURE-Programme and N311 million from NNPC.

    He said the gross inflow was N13 billion and a deduction of N3 billion was made, including bond deduction of over N1 billion.

    Jonah said foreign loans recovery was N12 million; refund from Domestic Crude Savings Account, N509 million; and refund of overpayment of derivation, N187 million.

    He said over N3 billion was paid as salary to civil servants and N304 million to political appointees.

    Jonah said monthly overhead payments cost N1 billion and the total fund available at the end of October was N23 billion.