The Nation Newspaper

Tag: Budget 2017

Budget 2017: MDAs generate only N120b of N807b revenue target

•Minister, AGF praise JAMB’s N5b remittance. NIMASA gets kudos

Barely three months to the end of the year, Ministries, Department and Agencies have generated only about N120 billion out of the N807 billon revenue target set for them.

The Accountant-General of the Federation (AGF), Mr. Ahmed Idris, broke the news yesterday at a workshop in Abuja on compliance with the Fiscal Responsibility Act (FRA). He asked the MDAs to sit up.

But the AGF and the Minister of Finance, Mrs. Kemi Adeosun, singled out the Joint Admissions and Matriculations Board (JAMB) and the Nigerian Maritime Administration and Safety Agency(NIMASA).

Idris said JAMB remitted over N5 billion into the Consolidated Revenue Fund (CRF).

It is also the first time in recent years that NIMASA has remitted huge revenue into the government’s coffers.

The AGF said the low revenue yield was hampering the release of votes from the 2017 budget.

He said with the poor revenue performance, budget releases to MDAs might not be 100 per cent.

He said: “We only realised 35 per cent of the N1.3 trillion revenue estimated for 2016.

“For 2017, it has been lowered to about N807 billion and we are now in the third quarter of the year. But what we have been able to realise to date is about N120 billion.

“We are now in September, which means we have not even gone half way, we are just hovering around 25 per cent of the estimated revenue for this year as far as Internally Generated Revenue (IGR) for this year is concerned.’’

“We must go back and see what we can use to enhance our revenue generation, otherwise, the budget would not be funded and that is why we have gaps in terms of releases.

“Agencies wonder why certain components of the releases are not made 100 per cent, but this is partly the reason.

“The estimated revenue is not really achieved as expected and therefore the releases could not be made as expected’’

Idris urged MDAs to sit up by being “more creative in revenue generation efforts so that they could meet the individual targets of agencies and collectively meet the estimated revenue to fund the budget.”

Mrs. Adeosun urged the MDAs to block loopholes and be more transparent.

She asked them to “recognise the current financial priorities of the nation and therefore cut their costs, eliminate wastages and block revenue leakages”.

The minister went on: “The issue of transparency and accountability in the management of government resources would not be compromised.

“Many agencies are operating in such a manner that returned minimal funds to government. A circular has been issued restricting allowable expenses in line with reforms occurring across government businesses.

“Compliance checks would be undertaken regularly to ensure that all agencies adhere to the new requirements. We may soon publish the revenue performance of agencies.”

She also lauded JAMB and NIMASA for the high revenue yield and remittances to the CRF

She confirmed remittance of N5 billion into the CRF by the examination board.

September 13, 2017
How to fund Budget 2017, by AMCON
•350 men owing enough to finance N2.3t deficit

THOSE ON THE DEBTORS’ LIST AS AT DECEMBER 2016
- Rockson Engineering Company Limited (N105 billion)
- Capital Oil-Gas Industries Limited (N102.4 billion)
- MRS Holdings Limited (N83.8 billion)
- Dansa Oil & Gas/Bulk Pack (N41 billion)
- Bi-Courtney Limited, (N35.5 billion)
- Home Trust Savings & Loans Limited (N27.2 billion)
- National Clearing & Forwarding Agency (N20 billion)
- Roygate Properties (N24.6 billion)
- Suru Worldwide Ventures Limited (N25.8 billion);
- Tanzila Petroleum (N52 billion);
- Multi-Trex Investment Limited, (N3.8 billion)
- Resort International Limited (N38.4 billion)
But many of the debtors have taken AMCON to court. Some are either contesting the figures or denying owing the corporation a penny.

IT is no longer news that the Federal Government will be going cap in hands to raise N2.3 trillion loans from local and international sources to fund this year’s Appropriation of N7.44 trillion.

What is news is that the cash trapped in the hands of some 350 Nigerians is more than the deficit in the Budget of Economic Recovery and Growth.

The Asset Management Corporation of Nigeria (AMCON) yesterday described as unacceptable the bleeding of the economy when the indebtedness of 350 Nigerians could reflate the economy.

It described the debtors as economic saboteurs who should be made to fulfill their obligations for economic growth.

But it would no longer be business as usual for the debtors as the agency has concluded plans to uses every means within the ambit of the law to recoup the cash.

AMCON’s Managing Director/Chief Executive Officer Ahmed Kuru spoke of the corporation’s plan to be hard on such debtors with a view to freeing some money for the economy to grow.

Kuru spoke yesterday in Enugu at a retreat between AMCON and members of the House of Representatives Committee on Banking and Currency.

He said that the obligors owed the corporation to the tune of N2.5 trillion, adding that the prevailing situation had hampered business models in the country.

According to Kuru, it was more intriguing that the debtors had sued in various courts across the country, either by disputing the debt or claiming damages against AMCON.

He said: “Our recent assessment of obligors identified 350 accounts that represent about 80 per cent of AMCON’s current exposure of N2.5 trillion as at December 31, 2016.

“Consequently, we have repositioned our debt recovery approach to strengthen legal and credit restructuring units to collaborate on the aforementioned accounts termed defaulters.”

He said that the corporation was established in 2010 to intervene in the banking sector to maintain economic and social stability in Nigeria due to the unprecedented rise in nonperforming loans.

Kuru said: “AMCON acquired over 13, 000 of such loans worth N3.7 trillion from 22 banks and injected N2.2 trillion as financial accommodation to 10 banks in order to prevent systemic failure.

“This intervention helped stabilise the financial system as about N3.66 trillion of depositors’ funds and interbank takings were protected and approximately 14,000 jobs were saved.”

AMCON, according to its managing director, had so far recovered N716.1 billion from obligors of which cash and assets accounted for 45 per cent and 55 per cent respectively.

He called for legislative intervention to enable the corporation overcome the bottlenecks militating against debt recovery.

In an opening remark, the Chairman, House Committee on Banking and Currency, Jones Onyereri, said such retreats fell within the legislative oversight ambit of his committee.

Onyereri said that the exercise enabled the National Assembly to be duly informed on how to straighten the operational efficiency of the corporation through legislative instruments.

He said that AMCON was created to assist the Nigerian financial sector to achieve stability by buying toxic assets of Eligible Financial Institutions.

“I find it troubling that while some of these obligors frustrate AMCON recovery efforts by exploiting the court system, they continue to do business with the Federal Government,” the committee chair said.

Onyereri assured that the report of the retreat would receive the support of the committee with a view to amending AMCON Act for greater efficiency.

In a presentation, AMCON’s General Manager, Credits, Joshua Ikioda, said it was unfortunate that 350 people were holding the country to ransom.

Echoing Kuru, he said the N2.5 trillion owed by the 350 obligors was enough to fund the 2017 budget deficit.

“We have a budget gap of N2 trillion while 350 Nigerians are owing us more than that. The Federal Government will have no need to borrow in order to finance part of the budget if they pay the debts”, he said.

He said that it was unacceptable that a few people would mortgage the future of the country, adding that everything would be done to get the obligors pay the debts.

“The challenge now is for Nigerians to see the benefit in getting a loan and paying. If nothing is done to the people owing us, we might be indirectly passing a wrong message to younger generations. This is a national call,” Ikioda said.

Enugu State Governor Ifeanyi Ugwuanyi, who opened the retreat, called for efficient debt control and recovery system.

He described the retreat’s theme: “Enhancing debt recovery efforts as a tool for growing the nation’s economy’’ as apt.

No more acquisition of toxic debts

Onyereri said lower chamber of the National Assembly would stop AMCON from further purchasing new bad debts from Deposit Money Banks (DMBs).

He noted that since the national economy was already on the path of recovery from recession, it would no longer be advisable for AMCON to take on that responsibility now.

The lawmaker said: “We are aware that some economists are clamouring for AMCON to buy more toxic assets from the Eligible Financial Institutions (EFIs). We wish to sound a note of warning that this committee will not, I repeat, will not support any such move.

“At least, not at a time like this in the history of our economy, the very high-level of non-performing loans in the country are worse than the 2009 experience and far above the regulatory threshold.”

Commending AMCON for performing above board as a federal interventionist institution, Onyereri expressed worry that the corporation often faces institutional and legal constraints to achieving optimum results.

In 2015, Onyereri noted, the House decided to amend certain aspects of the AMCON Act to further strengthen the corporation, including taking a resolution on the establishment of a Sinking Fund to support its operations.

The lawmaker traced the legal and institutional bottlenecks to lack of co-operation from EFIs; issues relating to claw-back on EFIs and intervened banks, and wrong interpretation of the AMCON Act, resulting in conflicting decisions by the courts, especially where it relates to possessory and freezing orders.

The other challenge, he said, has to do with disingenuous acts of the obligors, who exploit court processes and the shortcomings in the extant statutes to frustrate the efforts of the corporation to recover the loans from obligors.

He said: “I find it troubling that while some of these obligors frustrate AMCON recovery efforts by exploiting the court system, they continue to do business with the federal government and get paid.

“These issues contribute a lot in hampering the efforts of the corporation and must be nipped in the bud through proactive legislative instruments.

“We have to find ways to ensure better cooperation from the EFIs to enable AMCON effectively recover these loans. Where they are not willing to cooperate with AMCON, then AMCON must and should enforce its right of claw-back on the EFIs.

He said AMCON must be empowered to recover the public funds used to buy these bad loans that helped prevent the EFIs from going under.

Onyereri also stressed the need to sensitise the courts to speed up the process of resolving AMCON cases before it, by streamlining the processes and preventing obligors from using technicalities to circumvent the process.
June 20, 2017
Budget 2017: Our fears, hopes, by stakeholders

Despite signing the 2017 Appropriation Bill into law six months behind schedule, stakeholders believe the real issue is with the implementation of the Appropriation Law, report SIMEON EBULU, LUCAS AJANAKU, OKWY IROEGBU-CHIKEZIE, EMEKA UGWUANYI COLLINS NWEZE and TOBA AGBOOLA.

NIGERIANS have been expressed their reservations over the the 2017 Appropriation Bill since it was signed into law on Tuesday. They speak of their fears and expectations of the N7.44 trillion Budget of Economic Recovery and Growth.

The Appropriation Bill was on Monday signed into law at the State House in Abuja by Acting President Yemi Osinbajo, about 25 days after it was passed at a joint session of the Senate and House of Representatives by the National Assembly.

Not a few of the stakeholders expressed concern that an Appropriation Law that should have started running since January was being signed almost halfway into the year.

The former Executive Director, Keystone Bank Limited, Richard Obire, said the delay in signing the budget was not good for the economy, pointing out that the Federal Government has barely six months to implement the document.

He, however, said that the delay may not affect the implementation of the recurrent expenditure, considering that the government has been paying salaries to workers. On the other hand, he said the capital expenditure remains the aspect adversely affected by the delay.

He said: “By delaying the signing of the budget, many projects that would have been initiated and scheduled for completiion within the period may not be completed within the fiscal year”, adding that the delay will rub off negatively on the budget implementation.

Noting that the N143 billion injected into the budget by the National Assembly is on the expenditure side, Obire said increasing the expenditure vote would trigger an increment on the deficit side of the budget, a development he said, would require more borrowing.

He argued that more cash would be required through borrowing, thus increasing the chances of the government competing with private sector operators in the debt market.

“That delay was not good at all for the economy. But now that it has been signed, the next approach will be to ensure it is well implemented for its positive impact to bear on the economy to be realised,” he said.

He said the recurrent expenditure was estimated at N2.99 trillion, capital expenditure (N2.18 trillion) and N2.36 trillion was allocated to fiscal deficit.

The highlight of the budget showed that the Ministry of Power, Works & Housing got the highest vote of N586.54 billion. The Transport Ministry got N256.52 billion and Education and Healt ministries were allocated N455.41 billion and N308.46 billion respectively.

A one-time president of the Chartered Institute of Bankers of Nigeria (CIBN), Okechukwu Unegbu, said that signing the budget was not as important as what the budget can do to the economy. “It is not about signing. The question is: will the budget help the economy?

Unegbu pitched his tent with the Acting President’s position that the National Assembly lacks the power to raise the budget, but that they can cut it, warning that the executive may not implement the additional projects ‘imported’ into the budget. He, however, said the budget passage and signing would reduce the level of unemployment in the country, even as he regretted the small allocation to education.

Unegbu said: “Education should have the lion’s share because of its importance in the socio-economic development of the country. Overall, the budget signing is good news for the economy and a great start.”

The President, Manufacturers’ Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, commended the N7.44 trillion Budget and expressed the hope that the implementation would commence soon to compensate for the nearly six-month lost.

He criticised the practice of rolling over development plans into another year, saying the practice makes planning difficult. Jacobs regretted that the uncertain nature of the country’s budget process has conditioned many to either plan outside the document, or take the initial figures mentioned during the budget presentation.

“The first half of the year is gone and the signing now kick-starts financial market’s strategy that is targeted at the country’s fiscal plans. Budget is about time and resources”, he said.

Responding to a question on whether the sectoral votes as exemplified by about 30 per cent of the budget going for capital expenditure is commendable, the MAN chief lauded the new development, hinging his commendation on the deplorable state of infrastructure, which affects business operations.

According to him, if the implementation is carried out judiciously, there would be a significant improvement on the national basic infrastructure.

The Director-General of the Lagos Chamber of Commerce & Industry, Mr. Muda Yusuf, welcomed the signing of the budget as a step forward.

He told The Nation that it would put an end to the suspense and uncertainty caused by the non-passage and signing of the budget.

According to him, the next level of expectation is its speedy and effective implementation so that the citizens can get the desired value from the budget.

Yusuf canvassed for a review of the entire budgetary process and to set timelines for every stage of the process.

He advised that specific time frame must be set for the presentation of the budget to the National Assembly, for the consideration of the Appropriation Bill by the National Assembly and for the assent by the President.

The LCCI director-general suggested the enforcement of discipline of timing into the budgetary process, stressing that delivering a budget halfway into the financial year does not augur well for the overall economy.

Yusuf said: “There is also an urgent need to define the limits of authorities of the executive and the legislature on the Appropriation Bill. A judicial pronouncement is imperative to determine the extent to which the National Assembly can make changes to the Appropriation Bill. This issue has become a recurring factor in the delay that have characterised our budgetary process.”

To labour unions, the delay in the assent to the 2017 Budget notwithstanding, its full implementation would have a positive effect and also take care of moving the economy out of recession.

The Secretary-General of the National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN), Mr. Issa Aremu, said urged the Ministries, Departments and Agencies (MDAs) to hit the ground running.

Aremu said: “Although the budget is coming very late, it is better for it to be late than never. The various agencies of the government should be allowed to do their job without undue interference or hindrances. The only way the budget can make a meaningful impact is for the government to ensure its full implementation.”

Applauding the N7.44 trillion Appropriation Act for focusing on reflating the economy through import substitution and patronage of made-in-Nigeria goods, he called for the immediate constitution of a tripartite committee by the government to agree on a new minimum wage, after which a supplementary budget should be sent to the National Assembly for its implementation.

He said: “Our union will support President Muhammadu Buhari to realise the vision of import substitution and jobs creation. We demand that the disbursement of this huge fund should revive local industry, reopen closed factories and should not be spent on financing frivolous imports and perpetuate unemployment.”

President of the United Labour Congress (ULC), Joe Ajearo, insisted that the full implementation of the budget should not be played down, saying that it is the only way Nigerians can feel the impact of the budget.

Reacting, former President, Association of Telecoms Companies of Nigeria (ARCON), Emmanuel Ekuwem, commended the huge capital component of the budget. He advised the Federal Government to ensure its effective implementation.

According to him, investment on infrastructure and construction would accelerate Nigeria’s exit out of recession, create massive job opportunities and ensure a boost in the national gross domestic product (GDP).

Dr. Ekuwem, who is also the chairman, Teledons Group, an information communication technology (ICT) firm, advised the government to lay emphasis on Nigerian content in the implementation of the budget.

He said local content involvement in the budget must be holistic, ranging from the use of local hardware, software and expertise, warning that the failure to do this will lead to capital flight and further worsen the already weakened Naira.

The Chief Executive Officer, Pinet Infomatic, Lanre Ajayi, urged the Federal Government to follow the blue print of the National Broadband Plan (NBP) outline by the previous administration.

According to him, there are milestones set in the yet-to-be met plan, which he noted, has been drawing the entire industry back.

He also urged the government to encourage the growth of the local ICT ecosystem by patronising products and services from the industry.

Ajayi, who is a former president of the Nigeria Internet Group (NIG), said the Federal Government, as the biggest spender in the economy, should, as a deliberate policy, patronise indigenous and Original Equipment Manufacturers (OEMs) to boost job creation and the economic growth.

Detecon International Client Partner Olusola Teniola urged the government to put control and monitoring procedures in place to ensure implementation of projects.

Detecon International is a subsidiary of Deutsch Telecom Group of Germany.

Teniola said: “If projects are successfully executed and delivered, the social dividend to the communities that need it most will be felt. Financial Year 2017 has only six months more to go and therefore expedient disbursement of funds by government is paramount at this critical time – these funds will fuel economic activity through government spending.”

An analyst and lecturer at the Pan Atlantic University, Lagos, Dr. Austin Nweze, described signing the budget into law halfway into the year as a challenge on its own unless the government hits the ground running with the implementation.

He noted that the delay has caused grave setback to economic activities. Companies and industrial concerns have been waiting for the budget for a long time.”

He, however, expressed doubt over the immediate implementation, as according to him, it would take at least one month to implement the budget.

Nweze also disagreed with Prof Osinbajo’s position that the budget would take the country out of recession. He identified faulty fiscal and monetary policies as hinderances. Nweze noted that if the economic fundamentals are wrong, it would be difficult to get the economy on the right track.

His words: “Signing the budget in the sixth month of the year is already a setback. Although, they (government) may extend the execution to May of 2018. Even if they extend the execution of the budget to May next year, it might be difficult to achieve its anticipated objectives.

“It’s also important to know that it would take at least one month before the execution of the budget. Remember that what the government has been spending illegally before the signing of the budget must be factored into the budget.

“Also do they have the money to execute it? Sourcing for the funds to execute the budget is a challenge. Although they can borrow from institutions such as the World Bank to fund the budget, to make the budget have positive impact on the economy, the government needs to start implementation immediately, deploy money into the system and ensure that at least 85 per cent of the capital appropriation is achieved and on the appropriate projects in addition to the recurrent appropriation.

“Also the political rhetoric that having signed the budget into law will get the country out of recession is untrue. That the budget is tied to Economic Growth and Recovery Plan (EGRP) is only an aspiration. The nation needs more than two budgets to get out of recession in addition to putting place proper fiscal regime and monetary policies. We need to have good policies in place before we begin to make meaningful and sustainable impact on the economy.

“Nigeria needs to have single exchange rate as against the current multiple exchange rates. Interest rate has to be brought down to boost economy. The government has to encourage domestic production, encourage growth of science and technology and focus less on oil and gas.

“Currently, inflation is 17.4 per cent, monetary policy rate (MPR) is 14 per cent and interest rate is 25 per cent or above. The Federal Government through the Central Bank of Nigeria (CBN) is only practicing inflation targeting, which is not good enough for our economy.

“Inflation targeting is the reason interest rate is high. The monopoly and undue control of the foreign exchange market by the government and dependence on importation doesn’t encourage growth of the economy.

“Power accounts for 65-80 per cent of cost of production underscoring the critical position of power in economic growth. All efforts to make the power sector work seem fruitless because the fundamentals are not right. The government has to focus on making the power sector work by getting the policies and actions right.

“The government should not focus on short-term plans as currently seen because it is not helping the economy. Local production has to be highly encouraged to enable the merger of inflation and local production at a point. This will mark the foundation of a stable economy.

“Currently, the fundamentals are not right. The future is science and technology and these should be highly encouraged to diversify the country from dependence on oil and gas to other sectors.”

June 15, 2017
Budget 2017: Our fears, hopes by stakeholders

•Govt urged to focuson implementation

Despite signing the 2017 Appropriation Bill into law six months behind schedule, stakeholders believe the real issue is with the implementation of the Approriation Law, report SIMEON EBULU, LUCAS AJANAKU, OKWY IROEGBU-CHIKEZIE, EMEKA UGWUANYI COLLINS NWEZE and TOBA AGBOOLA.

BARELY 24 hours after signing the 2017 Appropriation Bill into law, Nigerians yesterday expressed their reservations. They spokes of their fears and expectations of the N7.44 trillion Budget of Economic Recovery and Growth.

It was Appropriation Bill was on Monday signed into law at the Presidential Villa in Abuja by Acting President Yemi Osinbajo, about 25 days after it was passed by the National Assembly at a joint session of the Senate and House of Representatives.

Not a few of the stakeholders expressed concern that an Appropriation Law that should have started running since January was signed almost halfway into the year.

The former Executive Director, Keystone Bank Limited, Richard Obire, said the delay in signing the budget was not good for the economy, pointing out that the Federal Government has barely six months to implement the budget.

However, he said the delay may not affect the implementation of the recurrent expenditure considering that government has been paying salaries to workers. On the other hand he said the capital expenditure remains the one that is adversely affected by the delay.

He said: “By delaying the signing of the budget, many projects that would have been initiated and completed within the period may not be completed within the fiscal year”, adding that the delay will rub off negatively on the budget implementation.

Noting that the N143 billion injected into the budget by the National Assembly is on the expenditure side, Obire said raising the expenditure vote would trigger an increment on the deficit side of the budget, a development he said, would require more borrowing.

He argued that more cash would be required fund through borrowing, thus increasing the chances of government competing with the private sector in the debt market.

Obire said the deadline for signing the budget was Monday, after a 30-day window.

“That delay was not good at all for the economy. But now that it has been signed, the next approach will be to ensure it is well implemented for its positive impact to bear on the economy to be realised,” he said.

He said the recurrent expenditure was estimated at N2.99 trillion, capital expenditure (N2.18 trillion) and N2.36 trillion was allocated to fiscal deficit.

The highlight of the budget showed that the Ministry of Power, Works & Housing got the highest vote of N586.54 billion. The Transport Ministry got N256.52 billion and Education and Healt ministries were allocated N455.41 billion and N308.46 billion respectively.

A one-time President of the Chartered Institute of Bankers of Nigeria (CIBN), Okechukwu Unegbu, said signing the budget was not as important as what the budget can do for the economy. “It is not about signing. The question is; will the budget help the economy?

Unegbu pitched his tent with the Acting President’s position that the National Assembly lacks the power to raise the budget, but that they can cut it, warning that the executive may not implement the additional projects imported into the budget. He, however, said the budget passage and signing would reduce the level of unemployment in the country, even as he regretted the small allocation to education.

Unegbu said: “Education should have the lion’s share because of its importance in the socio-economic development of the country. Overall, the budget signing is good news for the economy and a great start.”

On his part, the President, Manufacturers’ Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, commended the N7.44 trillion Budget and expressed the hope that the implementation would commence soon to compensate for the nearly six-month lost.

He criticised the practice of rolling over of development plans into another year, saying the practice makes planning difficult. Jacobs regretted that the uncertain nature of the country’s budget process has conditioned many to either plan outside the document, or take the initial figures mentioned during the budget presentation.

“The first half of the year has gone and the signing now kick-starts financial market’s strategy that is targeted at the country’s fiscal plans. Budget is about time and resources”, he said.

Responding to a question on whether the sectoral votes as exemplified by about 30 per cent of the budget going for capital expenditure is commendable, the MAN chief lauded the new development, hinging his commendation on the deplorable state of infrastructure, which affects business operations.

According to him, if the implementation is carried out judiciously, there would be a significant improvement on the national basic infrastructure.

The Director-General of the Lagos Chamber of Commerce & Industry, Mr. Muda Yusuf, welcomed the signing of the budget as a step forward.

He told The Nation that it would put an end to the suspense and uncertainty caused by the non-passage and signing of the budget.

According to him, the next level of expectation is its speedy and effective implementation so that the citizens can get the desired value from the budget.

Yusuf canvassed for a review of the entire budgetary process and to set timelines for every stage of the process.

He advised that specific time frame must be set for the presentation of the budget to the National Assembly, for the consideration of the Appropriation Bill by the National Assembly and for the assent by the President.

The LCCI director-general suggested the enforcement of discipline of timing into the budgetary process, stressing that delivering a budget halfway into the financial year does not augur well for the overall economy.

Yusuf said: “There is also an urgent need to define the limits of authorities of the executive and the legislature on the Appropriation Bill. A judicial pronouncement is imperative to determine the extent to which the National Assembly can make changes to the Appropriation Bill. This issue has become a recurring factor in the delay that have characterised our budgetary process.”

To organised Labour, the delay in the assent to the 2017 Budget notwithstanding, its full implementation would have a positive effect and also take care of moving the economy out of recession.

The Secretary-General of the National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN), Mr. Issa Aremu, said urged the Ministries, Departments and Agencies (MDAs) to hit the ground running.

Aremu said: “Although the budget is coming very late, it is better for it to be late than never. The various agencies of t government should be allowed to do their job without undue interference or hindrances. The only way the budget can make a meaningful impact is for the government to ensure its full implementation.”

Applauding the N7.44 trillion Appropriation Act for focusing on reflating the economy through import substitution and patronage of made-in-Nigeria goods, he called for the immediate constitution of a tripartite committee by the government to agree on a new minimum wage, after which a supplementary budget should be sent to the National Assembly for its implementation.

He said: “Our union will support President Muhammadu Buhari to realise the vision of import substitution and jobs creation. We demand that the disbursement of this huge fund should revive local industry, reopen closed factories and should not be spent on financing frivolous imports and perpetuate unemployment.”

President of the United Labour Congress (ULC), Joe Ajearo, insisted that the full implementation of the budget should not be downplayed, saying that is the only way Nigerians can feel the impact of the budget.

Reacting, former President, Association of Telecoms Companies of Nigeria (ARCON), Emmanuel Ekuwem, commended the huge capital component of the budget. He advised the Federal Government to ensure its effective implementation.

According to him, investment on infrastructure and construction would accelerate Nigeria’s exit out of recession, create massive job opportunities and ensure a boost in the national gross domestic product (GDP).

Dr. Ekuwem, who is also the chairman, Teledons Group, an information communication technology (ICT) firm, advised the government to lay emphasis on Nigerian content in the implementation of the budget.

He said local content involvement in the budget must be holistic, ranging from the use of local hardware, software and expertise, warning that the failure to do this will lead to capital flight and further worsen the weakened Naira.

The Chief Executive Officer, Pinet Infomatic, Lanre Ajayi, urged the Federal Government to follow the blue print of the National Broadband Plan (NBP) outline by the previous administration.

According to him, there are milestones set in the yet-to-be met plan, which he noted, has been drawing the entire industry back.

He also urged the government to encourage the growth of the local ICT ecosystem by patronising products and services from the industry.

Ajayi, who is a former president of the Nigeria Internet Group (NIG), said the Federal Government, as the biggest spender in the economy, should, as a deliberate policy, patronise indigenous and original equipment manufacturers (OEMs) to boost job creation and the economic growth.

Detecon International Client Partner Olusola Teniola said with every budget which is planned ahead, it’s imperative for the government to put control and monitoring procedures in place to ensure implementation of projects.

Detecon International is a subsidiary of Deutsch Telecom Group of Germany.

Teniola said: “If projects are successfully executed and delivered, the social dividend to the communities that need it most will be felt. Financial Year 2017 has only six months more to go and therefore expedient disbursement of funds by government is paramount at this critical time – these funds will fuel economic activity through government spending.”

An analyst and lecturer at the Pan Atlantic University, Lagos, Dr. Austin Nweze, described signing the budget into law halfway into the year as a challenge on its own unless the government hits the ground running with the implementation.

He noted that the delay has caused grave setback to economic activities. Companies and industrial concerns have been waiting for the budget for a long time.”

He, however, expressed doubt over immediate implementation, as according to him, it would take at least one month to implement the budget.

Nweze also disagreed with the Acting President’s position that the budget would take Nigeria out of recession, pointing at faulty fiscal and monetary policies as reasons. He noted that if the economic fundamentals are wrong, it would be difficult to get the economy right.

He said: “Signing the budget in half of the year is already a setback. Although, they (government) may extend the execution to May of 2018. Even if they extend the execution of the budget to May next year, it might be difficult to achieve the anticipated objectives of the budget.

“It’s also important to know that it would take at least one month before the execution of the budget. Do also remember that what the government has been spending illegally before the signing of the budget must be factored into the budget.

“Also do they have the money to execute it? Sourcing for the funds to execute the budget is a challenge. Although they can borrow from institutions such as the World Bank to fund the budget, to make the budget have positive impact on the economy, the government needs to start implementation immediately, deploy money into the system and ensure that at least 85 per cent of the capital appropriation is achieved and on the appropriate projects in addition to the recurrent appropriation.

“Also the political rhetoric that having signed the budget into law will get the country out of recession is untrue. That the budget is tied to Economic Growth and Recovery Plan (EGRP) is only an aspiration. The nation needs more than two budgets to get out of recession in addition to putting place proper fiscal regime and monetary policies. We need to have good policies in place before we begin to make meaningful and sustainable impact on the economy.

“Nigeria needs to have single exchange rate as against the current multiple exchange rates. Interest rate has to be brought down to boost economy. The government has to encourage domestic production, encourage growth of science and technology and focus less on oil and gas.

“Currently, inflation is 17.4 per cent, monetary policy rate (MPR) is 14 per cent and interest rate is 25 per cent or above. The Federal Government through the Central Bank of Nigeria (CBN) is only practicing inflation targeting, which is not good enough for our economy.

“Inflation targeting is the reason interest rate is high. The monopoly and undue control of the foreign exchange market by the government and dependence on importation doesn’t encourage growth of the economy.

“Power accounts for 65-80 per cent of cost of production underscoring the critical position of power in economic growth. All efforts to make the power sector work seem fruitless because the fundamentals are not right. The government has to focus on making the power sector work by getting the policies and actions right.

“The government should not focus on short term plans as currently seen because it is not helping the economy. Domestic production has to be highly encouraged to enable the merger of inflation and local production at a point. This will mark the foundation of a stable economy.

“Currently, the fundamentals are not right. The future is science and technology and should be highly encouraged to diversify the country from dependence on oil and gas.”

June 14, 2017
Budget 2017 and Recovery and Growth Plan’
After the infamous and rather ridiculous drama that characterized the 2016 budget, President Muhammadu Buhari presented the 2017 Budget Proposals, tagged ‘Budget of Recovery and Growth’ to the joint session of the National Assembly on Wednesday, December 14, 2016. The proposed total was N7.3 trillion, of which N5.06 trillion was for recurrent expenditure, while N2.24 trillion was for capital expenditure; representing 69.31 percent and 30.69 percent respectively. In the words of the President, “We propose that the implementation of the Budget will be based on our Economic Recovery and Growth Strategy. The Plan… provides a clear road map of policy actions and steps designed to bring the economy out of recession and to a path of steady growth and prosperity.”

A glance at the budget proposals would make one adjudge it a fantastic one! For instance, there’s an increase of 4.6 percent of the capital expenditure from the 2016 Appropriation Bill. That is, from 26.12 percent in 2016 to 30.69 percent in 2017. I think this is the first time we’re having capital expenditure up to 30 percent since 1999. Because it’s the capital projects that have direct impact on the masses. Kudos to the president!

Another take-away from the 2017 Budget is that proceeds from oil revenue will be used to resuscitate agriculture and industries. Hear him: “You may recall that oil itself was exploited by investment from agricultural surpluses. We will now use oil revenues to revive our agriculture and industries.” This, in my opinion, is a fantastic idea! I’ve always asked, “Why can’t we use money from our oil boom to develop other sectors of our economy?” To this end, I think the President was on point! However, the implementation is a different ball-game altogether.

Again, the President acknowledged the bureaucratic bottle-necks that usually hamper the speedy execution of projects and the ease of doing business. Consequently, he declared, “I will be issuing some Executive Orders to ensure the facilitation and speeding up of government procurements and approvals. Facilitation of business and commerce must be the major objective of government agencies.” This promise has already being fulfilled with the recent signing of three Executive Orders (the Ease of Business, Budget Submissions and Made in Nigeria Products) by the Acting President, Prof. Yemi Osibanjo.

But having gone through some key areas of the budget, juxtaposing it with the inconsistent economic policies of the present administration, and the realities on ground, one is tempted to ask, “Is the 2017 Budget really a Recovery and Growth Plan?

One sticking point is the financing of the N2.36trillion Budget Deficit through borrowings. But will the borrowings be done for capital expenditure or recurrent expenditure or for both? Where the borrowings will be channeled to wasn’t spelt out in the budget. If the borrowings are to finance recurrent expenditure, it’ll be an unwise economic decision. Because borrowing should be done to invest in ventures (capital projects) that’d bring returns, and not the other way round. Robert Kiyosaki, a financial guru opined that if money is borrowed for Consumption, it’s a Bad Debt, while the one borrowed for Production is a Good Debt.

The disparity between the budget deficit and the capital expenditure is another area of concern to me: N2.36 trillion was budgeted for the deficit while capital expenditure is 2.24trillion, representing 32.34 percent and 30.69 percent respectively. I’ve no problem with the deficit per se, because it has become an incurable disease in Nigerian budgetary system. But why should the deficit be 1.65 percent higher than the capital expenditure?

At the President’s budget presentation, he said, “We will increasingly grow and process our own food, we will manufacture what we can and refine our own petroleum products.” I’m attracted to the phrase, ‘refine our own petroleum products.’ At what capacity are the four refineries working? According to the NNPC, as at January, the capacity utilization of the four refineries was 36.73 per cent. Again, Does the President have the political will to clip the wings of the ‘oil cabal’ that’re bent on perpetual importation of petroleum products?

In the 2017 budget, the total allocation for the Ministry of Petroleum Resources was N69.55 billion. Out this amount, N62.46 billion is to be used for recurrent expenditure, representing 89.8 percent of the total, while N7.093 billion was earmarked for capital expenditure, representing 10.2 per cent of the total allocation. And of course, it’s practically impossible to build a new standard refinery even with the total budget of N69.55billion; let alone with a paltry sum of N7.093billion of capital expenditure! So, how do we ‘refine our own petroleum products’ with the present (almost moribund) four refineries? At present, Nigeria is importing about 80 percent of petroleum products. And so long as we continue to import, the pressure will be on the naira. This will make economic recovery and growth somewhat difficult since the budget is based largely on oil revenue.

Furthermore, the 2017 Budget proposals still retain the allocation of N500 billion to the Special Intervention programme consisting of the Home-grown School Feeding Programme, Government Economic Empowerment programme, N-Power Job Creation Programme, Conditional Cash Transfers to the poorest families and the new Family Homes Fund. The N-Power programme is laudable, but I’ve problem with the School Feeding programme and the Conditional Cash Transfers to the poorest of families! We need to ask some pertinent questions here: should feeding of the pupils be top priority? Will it eradicate poverty from their families? What criteria will they use to determine the poorest families to ‘transfer cash’ to?

If we must recover from the recession and expedite growth in the economy, the President must appoint the right people into positions. Nigeria is in dire need of philosopher-kings (technocrats) more than ever before in this present economic crunch!

As I said earlier, the Government Economic Empowerment programme (GEEP) and the N-Power Job Creation programmes are good. On Democracy Day, May 29, I listened to the live broadcast on radio, the Scorecard of the Social Investment Programme; and I heard the testimonies of those who have benefited from the programme. The Special Adviser to the President on Social Investment Programme, Mrs. Mayam Uwais gave a detailed step-by-step process on how they selected the contractors and the beneficiaries of the programme. Also, Alhaji Lai Muhammed, the Minister for Information and Culture, said that about 12,000 cooks were empowered, 25 million meals served for over one million pupils, and so on.

However, I’m still not convinced of the Home-grown School Feeding programme and the Conditional Cash Transfer Programme. What the government would’ve done is to economically empower the parents of the pupils so they can cater to the needs of their children. By so doing, for instance, the children can eat their fill. This conforms to the Chinese proverb which says, “If you give a man fish, you feed him for a day. But if you teach him how to fish, you feed him for life.” Also, the money allotted to the two programmes would’ve been used to build more factories or revive the moribund industries, and increase the agricultural sector allocation. This, of course, would create more jobs and boost food security. Because, according to the President, “the proposed allocation to the [agricultural] sector this year is at a historic high of N92billion.”

Finally, we’re now 24 months into the administration, and there are no indicators of economic recovery, soon. Though the government said that the moment the 2017 Budget is signed into law by the president, we’d witness massive developments. And that the economy will come out of the recession by the third quarter of this year. Well, as a positive-minded Nigerian with an unbiased but open-mind, I look forward to seeing the realization of the ‘Recovery and Growth Plan’.
- Chijioke is of the Faculty of Law, University of Nigeria, Enugu Campus.
June 5, 2017
Infographics: NASS increased budget

The National Assembly has raised its 2017 budget allocation by N10 billion, from the initial N115 billion to N125. What does this mean for the country? Is the increase a welcome development at a time that the masses are demanding a reduction in the cost of running the National Assembly?

May 11, 2017
‘Budget 2017 ready after Easter’

IF feelers from the House of Representatives are anything to go by, Nigerians should not expect the passage of the N7.3 trillion Budget 2017 until after Easter.

The Green Chamber, through the Chairman of its House Committee on Media and Public Affairs, Abdulrasak Namdaz, said the “Budget of Recovery and Growth” will be ready after the Easter celebrations.

Namdaz told reporters at a news conference on the weekly activities of the House yesterday said there is no way the budget can be ready before the resumption from the three- week impending Easter holiday.

The Easter break begins on April 11.

Namdaz said: “Hopefully, we will pass this budget when we come back from the Easter break. Even the Federal Government is taking advantage of the non-passage of the 2017 Budget.

“You were in the plenary today when the Minister of Budget and National Planning said if they’re able to reconcile some figures, they are likely to approach us (for inclusion in the budget).

“And I want to assure you that they will approach, this is the House of the people, we will certain be on the side of the people and see how we can include whatever they want to bring.

“But in any case, that will not stop us from passing the budget. But that will, by the special grace of God, be when we return from the Easter break.”

However, the spokesman declined response to questions on if or not the House will first approve the $29.6 billion 2016-2018 infrastructure loans request from the federal government before passing the budget.

April 7, 2017
March 8 deadline to pass budget 2017 fails

The March 8 deadline fixed by the National Assembly to pass budget 2017 may no longer be feasible, it was learnt yesterday.

Senate President, Bukola Saraki, has however tasked standing committees to expedite action on the budget process to ensure its speedy passage.

The leadership of the upper chamber yesterday met with chairmen of committees in a closed session to obtain update on how far they have gone with the budget.

Findings showed that most of the committees blamed Ministries, Departments and Agencies (MDAs) for their inability to conclude work on the budget preparatory for its passage.

The MDAs were said to have failed to provide necessary details to the committees while some of the details provided were said to have been littered with inconsistencies.

For instance, the Social Intervention Fund of N500 billion was said to have been proposed without details of how the funds will be disbursed.

February 22, 2017
Budget 2017: How to avoid borrowing

A former Special Adviser to the President on Niger Delta, Chief Timi Alaibe yesterday said if efforts are stepped up to restore peace, safety and security in the Niger Delta, the nation may not resort to borrowing to fund the 2017 budget.

He spoke in Abuja as a guest on Thisday Live, a breakfast programme on Arise Television, Chief Alaibe who was also the Managing Director of the Niger Delta Development Commission (NDDC) blamed the continuing restiveness in the Niger Delta on the failure of successive Federal Governments to follow through with the Niger Delta Master Plan that was commissioned by the Olusegun Obasanjo administration.

He said: “There is really nothing new to be said about the situation in the Niger Delta. All that needs to be said and all that we need to do and where we need to do them are succinctly captured in the Niger Delta Master Plan. If you have massive infrastructure, if you have good roads and bridges to open up the Niger Delta, you will not have the recurrence of incidences of militancy in the region.

“After President Obasanjo left office, I had the opportunity of briefing President Yar’Adua severally on the Master Plan and part of the briefing led to the Amnesty Proclamation and the Presidential Amnesty Programme for the Niger Delta but unfortunately, Yar’Adua died and the processes were not followed through after his death.”

The former NDDC chief said the Amnesty Programme derailed when the administration of President Goodluck Jonathan curiously stopped at the implementation of just one component of the Amnesty Programme.

According to him, the Amnesty Programme was modeled to focus on five main areas.

Aliabe said: “What you refer to as the Amnesty Programme today was originally designed to have five broad areas of focus, namely the Disarmament, Demobilisation and Reintegration (DDR) of ex-agitators who accepted the offer of Amnesty.”

February 14, 2017
Budget 2017: What senators frowned at

ON Tuesday the Senate began the debate of the general principles of the 2017 budget proposal.

The debate offers the Senate the opportunity to open up the fiscal document as presented by the president.

It also presents the Senate the chance to highlight areas of strength and weakness in the budget.

It is an opportunity most senators look forward to make their input into the budget process. The snag however is that more often than not, contributions and suggestions of the lawmakers are taken for granted by the executive arm.

The impression is that debate of the general principle of the budgets is an annual ritual to “fulfill all righteousness,” since the suggestions of the lawmakers are not binding on the executive.

The debate of the general principles of N7.298 trillion budget President Muhammadu Buhari presented to a joint session of the National Assembly for the 2017 fiscal year may be different.

It was, for all intents and purposes, a no hold bared debate. Senators across party lines exposed the shortcomings in the budget with the hope that government will do the needful.

Senate Leader, Senator Ahmed Lawan, flagged off the debate with the presentation of the overview and projections of the budget.

He recapped by underscoring the fact that the Appropriation Bill is for an Act to authorize the issue from the consolidated revenue fund of the Federation the total sum of N7, 298,507,709,937 only, of which N419,020,648,000 only, is for statutory transfers, N1,663,885,430,499 only, is for Debt Service, N177,460,296,707 only, is for sinking fund for maturing bonds, N2,979,151,756,196 only, is for recurrent (Non-Debt) expenditure while the sum of N2,058,,989,578,536 only, is for contribution to the Development fund for capital expenditure.

For him, with the 2017 budget of recovery and growth, the future of the country looks bright as the year to year growth in capital expenditure demonstrates government’s desire to make the country more competitive in order to bring the economy out of recession, into steady growth and prosperity for Nigerians.

The Yobe North senator said the 2017 capital budget was designed to align expenditure to long-term objective, sustainable development as well as fiscal consolidation, inclusive growth and job creation, stabilization of the welfare of Nigerians by focusing more on micro-economic stability, consolidating structural reforms and enhancing governance and institutional goals.

Based on key assumptions of the budget, Lawan said aggregate revenue available to fund the budget will be N4.94 trillion. This is 28percent higher than the 2016 full year projection.

The 2017 Budget of N7.3 trillion with a revenue projection of N4.94 trillion, he said, will result to a deficit ofN2.36 billion, the deficit, which is equivalent of 2.18% of our GDP will be financed mainly by borrowing which is projected to be about N2.32 trillion. The intention, according to him, is to source about N1.067 trillion from external sources while the balance of N1.254 trillion will be sourced from the domestic market.

In the delivery of critical infrastructure, he said N100 billion has been provided in the Special Intervention Fund that will underpin a new Social Housing Programme that is expected to stimulate construction activities throughout the country.

Former Senate Leader, Senator Mohammed Ali Ndume, was more concerned about engendering open and transparent budget process.

He specifically asked the leadership of the Senate to open up the budget of the Senate and indeed, the National Assembly for the sake of transparency and openness.

Ndume who was removed as Leader of the Senate on January 10, 2017 insisted that a situation where details of the budget of the National Assembly are not disclosed to members should no longer be accommodated.

The trappings of the management of the N115 billion budget of the National Assembly, may have informed Ndume’s outburst.

Although Ndume may have merely re-echoed the demand of the larger Nigerian society about the need for openness in the disbursement of resources, some of his colleagues were quick to ask why the Borno senator did not make the demand before his removal.

Ndume said, “We come here to pass the budget without seeing the details. This is government of change and this must change. The details of the budget report should and as required, must be considered holistically.

“Last year we had several issues with the budget, in fact to some extent very embarrassing and that is because some of us are even innocent. We don’t know what was in the budget because the details of the budget were not provided and that should be done this year.

“The budget of the Senate is not known to the Senators, it should be known this year. This is very important because we cannot be taking blames or hold credit for what we don’t know. Mr. President if you look at 2016 budget, yes we have been given the budget performance but what budget 2016 contained in relation to 2017 budget is not available.

“There should have been a column where 2016 budget is enumerated and detailed so that we know because we end up having uncompleted projects.

“We end up having projects that are new that will never be executed because we provide them desperately in other to answer the call of our colleagues, yet they will not be done or for technical reasons they will say they will not do it,” Ndume said.

“But if the budget of 2016 column is there and we know what has been released for that particular subheads, then we know what is budgeted for this year or proposed, then we know how to do actual budget work. The committee on appropriation should do that and know the right thing.”

Ndume had protested that he was not recognised to contribute to the debate even when he wrote his name after Senator Dino Melaye’s name who had spoken.

Through a Point of Order, Ndume said, “When you (Saraki) announced the debate on the budget you asked us to write our names and I wrote my name and my name is listed after Distinguished Senator Dino Melaye. I was prepared and I was following but I didn’t hear you call my name after Dino spoke. So, I don’t know when I will contribute.”

Saraki responded: “Senator Ndume, as I sit down here I didn’t write this list. I take the order in directing the affairs of the chamber. And the list I have is the list I am going by and I don’t know which list you are talking about.

“So follow my list and you will be called in due time. So, I don’t know the list you are talking about. The only list that matters is the list I have in front of me and I am going with that list.”

What happened the day Ndume was removed as Leader of the Senate, also played out.

When Saraki eventually called Ndume to make his contribution, Ndume was not in the chamber.

Where has Ndume gone again, a senator was overheard asking?

Few minutes later, Ndume returned to the chamber to take his turn. Realizing that he had been called while he was away, Ndume told his colleagues that he went to pray. Ndume also went to pray on January 10 when he was sacked by his colleagues.

January 29, 2017