The Nation Newspaper

Tag: budget

  • NNPC faults Sanusi on fresh $20b allegation

    The Group Managing Director (GMD) of the Nigerian National Corporation (NNPC), Mr. Andrew Yakubu on Tuesday denied allegations that the $10.8billion outstanding from $49.8billion alleged mission oil revenue has risen to $20billion.

    Central Bank Governor, Sanusi Lamido Sanusi had told the Senate Committee on Finance probing the $49.8billion unremitted funds to the Federation Account, that the apex bank still has $20billion unaccounted for.

    But Yakubu told reporters after the meeting that Sanusi does not understand the intricacies of petroleum engineering issues.

    The GMD said the misunderstanding arose from Sanusi trying to do an auditing job instead of concentration on his banking duties.

    Yakubu said: “Gentlemen, you heard the Chairman very well! The issues that were raised are not new at all. You see, we came out in details because we don’t have anything to hide and we gave a detailed breakdown of the so called $49billion and we came out clearly to state the various streams that are associated with what he was talking about.

    “Now, we also made in clear that NPDC, if we had anything to hide we would not have made it clear that NPDC was part of the stream, because NPDC which is NNPC’s upstream operation, is a limited liability company registered the Companies and Allied Matters Act (CAMA) to do upstream business jus like any other independent company.

    “Now, if you are in your business, will you take your gross revenue and pass it on? What we simply said was to account for the streams that the CBN Governor erroneously captured. Now let me make this point very clearly: CBN is a banking outfit, so I really, really understand why they will not understand some petroleum engineering issues and the are not also an auditing outfit.

    “Now what they try to do is to audit and I heard some statements made here that they do not have this document, they don’t have that document. They are not the auditors. We have certified bodies and arms of agencies that are charged with the responsibility of auditing.

    “They are banking right? So what he said was not really new. We said clearly that we stated an amount that went to NPDC and that amount was the gross lifting. But there are other streams that go back to government in terms of taxes just like any other business player.

    “So we have Royalties, we have Petroleum Profit Tax and so on and so forth. Now these are subject of other detailed discussions and investigations and they are open.

    “We give access to the Auditor General of the Federation, we give access to Accountant-General, we give access to agencies that have business to do with auditing our own business.

    “And at the Federation Account too we render this report as you are told on monthly basis and these are issues that are subject of reconciliation on monthly basis.

    “So really for issues like this to come to the public glare again becomes worrisome that we throw away numbers, we throw away allegations that at the end of the day we clarify but then the damage would have been done,” Yakubu stated

  • A budget for more

    A budget for more

    Oba Local Council Development Area, Lagos, has passed a budget of over N2 billion, which council chairman, Hon Ramota Adeyeri Oseni said is aimed at providing more infrastructure and welfare for residents of the area.

    The Oseni administration has tackled pressing challenges, some of which are roads, health facilities and school infrastructure among others. The council leadership rehabilitated the once problematic Oba Ayoka Road in Iba town as well as the Iba Estate Road. Drainages and culverts have been built in water-logged places, just as flood plain areas have been landscaped for appropriate infrastructural remedies. The health profile of the area was also boosted with the completion of public health centres at Ijagemo and Kemberi in addition to the provision of first aid boxes in all public schools in the development area.

    The administration equally moved to enhance sanitation and healthy living by building prototype public toilets in the area, with a borehole attached.

    Pupils are regularly assisted with free aids, including uniforms and classroom furniture in all 14 primary schools in the area. Every year, free GCE and JAMB forms are given to candidates who perform excellently in their school certificate exams. Also, four plots of land have been acquired for the building of a secondary school in the council.

    But, Hon. Oseni said that the “budget of consolidation”, as she called it, will be her financial instrument to further improve the living standards of the people in the LCDA in the 2014 fiscal year.

    Part of the expenditure estimates, she said, will be devoted to recruitment bills, overheads, personnel wages and school salaries, among others, but the LCDA chairman added that her administration is determined to do more for the people this year.

  • How we spent our N2b budget, by VC

    The Solomon Lar University (formerly called Plateau State University), Bokkos, used most of its N2billion subvention for last year from the Plateau State Government to upgrade its infrastructure ahead of accreditation of its programmes.

    Its Vice Chancellor, Prof Doknan Danjuma Sheni, said the money went various building projects that dot the campus.

    “The fund was spent basically on infrastructural development of the new university in preparation for accreditation of our courses by the national university commission (NUC),” Sheni said while inspecting project at the university campus in Bokkos.

    The projects include perimeter fencing of the university, multipurpose auditorium as well as the administrative block.

    Sheni urged the contractors at the various sites to speed up work as the timely completion of the projects was expected to boost the accreditation of programmes later this year. He said any delay in completion of the projects will adversely affect the academic activities of the school.

    “Apart from the state government projects being carried out with the 2013 budget, there are other project going on simultaneously in the school and sponsored by the Federal Ministry of Education through the Tertiary Education Trust Fund (TETFund). Such projects are lecture halls and offices for the faculty of Management Sciences, the entrepreneurial center etc,” he said.

    The VC applauded the state government for allocating over N4 billion to the university in the 2014 budget proposal, saying whatever kobo allocated to the university will be spent judiciously to enable the school realise set objectives.

    He said: “The state government of Governor Jonah Jang is determined to nurse this young university to maturity through the provision of necessary funds for the running of the school.”

    He called on staff and students to reciprocate the gesture through absolute dedication to work and academic activities.

     

  • GDP rebasing to raise budget deficit by N400b, says RenCap

    Chief Economist, Renaissance Capital (RenCap), Charles Robertson has said the Federal Government’s plan to rebase the Gross Domestic Product (GDP) by next month could raise this year’s budget deficit by N400 billion to N1.3 trillion.

    In an emailed report, the economist said the GDP revision may affect the 2014 budget, too. “It does nothing to improve budget revenues or expenditure. It does mean, however, that a nominal Federal Government budget deficit of N912 billion could be raised by about N400 billion to N1.3 trillion and still remain at 1.9 per cent of GDP, using the new 2014 GDP estimate we have. This may be very tempting to politicians in pre-election mode,” he said.

    Robertson said the wider budget deficit would then require additional borrowing, via either Eurobonds which Nigeria’s debt office is trying to move towards, or domestic debt. Higher supply might offset the benefit to debt holders of the improved debt ratios and a possible rating upgrade.

    “We must emphasise that while per capita GDP would appear to rise from around $1,700 to $2,400, in fact the NBS is just doing a better job in measuring the output that is already happening. No one in Nigeria should suddenly find 53 per cent more naira in their pocket,” he said.

    Robertson said the GDP re-basing could cut the public debt ratio from 20 per cent of GDP to 13 per cent, and cut public external debt below two per cent of GDP, while the current account surplus may still be five per cent of GDP.

    “We suspect the rebasing is supportive of a possible upgrade in Nigeria’s Ba3/BB- ratings over 2014 to 15,” he said.

    He said on the production side, agriculture is expected to revised down from nearly 40 per cent of GDP to about 30 per cent; while on the expenditure side, consumption may be increased from 70 to 80 per cent to 80 to 90 per cent of GDP,” he said.

    Speaking further on the rebasing, Managing Director, Financial Derivatives Company, Bismark Rewane said Nigeria’s GDP, which currently stands at $283 billion are ranked 37 of 192 global economies.

    The financial analyst said GDP rebasing has been done by several countries such as Ghana, South Africa and Malaysia, and has significant implications on the structure of an economy.

    Nigeria, with a five-year average yearly growth rate of seven per cent, has been using a 1990 base year to calculate the growth of its real GDP. “In nominal terms, this is estimated to be $283 billion in 2013. Nigeria has a young and growing populace, estimated at 170 million, who have a per capita annual income of $1,624. Based on the above, Nigeria can be classified as a low-income economy that is heavily dependent on oil,” he said.

    Citing the World Bank, he said Nigeria falls within the category of lower middle-income economies based on certain criteria, such as the GDP and GNI per capita. Similar countries in this cadre include Senegal, Cote d‘Ivoire, Ghana and Cameroon.

    He said one of the aspirations of the Federal Government is for the country to become one of the top 20 economies by 2020 (Vision 20:20).

    Rebasing its GDP, he added, brings it one step closer to this goal.

     

  • Budget: Govt votes N712b for debt servicing

    Budget: Govt votes N712b for debt servicing

    TThe Federal Government will spend N712 billion on debt servicing this fiscal year.

    The amount is over N100 billion higher than the N591.8 billion voted for the facility last year.

    Analysing the budget, Managing Director, Financial Derivatives Limited (FDL), Bismarck Rewane, said the percentage of aggregate expenditure to be spent on capital expenditures decreased from 31.34 per cent last year to 27 per cent this year, while recurrent expenditures increased from 68.66 per cent in 2013 to 73 per cent.

    This, he said, was contrary to the fiscal strategy adopted over the past two years, geared to-wards correcting the lopsided imbalance between recurrent and capital spending.

    “The strategy has succeeded in lowering recur-rent spending from 74.4 per cent in 2011 to 68 per cent in 2013, while raising capital from 25.6 per cent to 32 per cent within the same time span.

    Capital spending is set to bear the brunt, albeit temporarily, of the projected significant reduction in revenues in 2014 as it is essentially being crowded out by personnel cost which is projected to in-crease from N1.718 trillion in 2013 to N1.723 trillion this year.

    Notwithstanding the decrease in aggregate expenditure, the fiscal deficit is projected to increase, although marginally to 1.9 per cent from 1.85 per cent in 2013. The increased deficit is, however, still within the threshold stipulated by the Fiscal Responsibility Act, 2007.

    In addition, the budget projects a 0.86 per cent reduction in domestic borrowing to N572 billion from N577 billion in 2013, implying an increase in external borrowing.

    Rewane said the noticeably more conservative budget is based on lower bench mark oil price and production projections, and places more emphasis on recurrent spending which is in slight contradiction with the budget theme, given the direct link between infrastructural development and jobs.

     

  • Budget without human face

    SIR: Animals appear to have gained more recognition and attention from the Presidency in the 2014 Appropration Bill, even as the breakdown of the budget shows the wastefulness and insensitive nature of the President Goodluck Jonathan-led regime towards the populace. The provisions of the budget have once more exposed the government non-readiness and lack of foresight in terms of positioning the country’s economy to meet the standard of the developed countries. It is, indeed, appalling that while ordinary Nigerians could barely afford a three square meal a day, our big man in the Villa is busy thinking of how to feed his pets in 2014 with the taxpayers’ money.

    The N4.6trn budget estimate presented before the National Assembly by President Jonathan through the Minister of Finance and the Cordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, shows that the Federal Goverment will be spending 73 per cent of the proposed budget on recurrent expenditure, while a meagre 27 per would be spent on capital projects. The impication of this is that Nigerians are not likely going to witness any improvement on our dilapidated roads or see any change in the education sector, health and other critical sectors of the nation’s economy.

    A glance at the budget shows that a whooping N2.4bn has been allocated for the President and his deputy’s foreign and local trips in 2014, while another N1.6bn is earmaked for a new presidential jet and yet another N362m for meals and refreshment. And to further show that the government lacks confidence on her so-called transformation in the power sector, it plans to spend N836.6m on fuelling of generators in the Presidency, its ministries and agencies. These frivolous allocations clearly show that the federal government is not keen at pursuing developmental policies that would drive our economy and put food on the average Nigerian’s table.

    The most outrageous is the proposed N38m for Aso Villa’s zoo. The money would be used to buy more “wild animals” and feed some other animals in the zoo. All this is aimed at satisfying the pleasures of the president and his co-travellers in the Villa amidst the growing poverty and pangs of hardship in the country. Sincerely, one does not know how the maintenance of this private zoo will add to the productivity of the president towards delivering on his promised transformation agenda. Similarly, the Nigeria Police is to spend N125.6m on its dogs in 2014, even as the government plans to spend a huge sum of  N7bn on the proposed jamboree called “National Dialogue”, an exercise which outcome is bound to gather dust on the presidential archive like other ones. The impact of the World Economic Forum which would be hosted in Abuja in 2014 at the expense of the country’s budget estimate of N4bn remains to be seen.

    It is instructive that while these frivolities received huge allocations in the proposed budget, key sectors of the economy like education, health, judiciary among others are left with meagre allocations. For instance, under the proposed budget, the judiciary received a paltry N4.7bn which is a sharp decline when compared with the N5.5bn it was budgeted for in the 2013 Appropriation Act. A serious government interested in exterminating corruption and quick dispensation of justice in the country ought to have equipped this sector and empower the fund strapped anti-corruption agencies.

    The federal government should borrow a leaf from the Kano State governor, Rabiu Kwankwaso, whose 2014 budget of N219.2bn would see the capital project receiving a large chunk of N148bn representing the 68 per cent of the budget, while the recurrent expenditure would only receive N70.6bn, that is the 32 per cent of the proposed Appropriation Bill.

    The National Assembly would be doing a great injustice and diservice to the fatherland and the people of this country if it goes ahead to approve these outlandish reckless, anti-peopleallocations. The lawmakers should, therefore, teach the president the principle of frugality and prudent management of our commonwealth by rejecting or altering some of these frivilous estimates.

    • Barrister Okoro Gabriel,

    Lagos.

  • Okonjo-Iweala presents budget today

    Okonjo-Iweala presents budget today

    After weeks of negotiations, the Senate and the House of Representatives yesterday agreed on $77.5 crude oil benchmark for 2014 budget.

    The budget will, however, be presented to the National Assembly today by the Coordinating Minister for the Economy and Minister of Finance, Dr. (Mrs.) Ngozi Okonjo-Iweala.

    Some governors of the Peoples Democratic Party (PDP) were also alleged to have secretly directed their Senators and members of the House of Representatives to support the $77.5 benchmark.

    The governors said budget benchmark was more of economic interest than political issue.

    The consensus benchmark was a departure from the position of the Presidency, which has been unyielding on $74 benchmark.

    Investigation by our correspondent showed that the affected governors are from the North-East, South-South, North-Central.

    According to a member of the Joint Conference of the National Assembly on the benchmark, the $77.5 per barrel oil benchmark was a consensus position.

    It was learnt that while the House of Representatives had insisted on $80 per barrel, the Senate opted for $77.5

    The source said: “When we met on Wednesday, we decided that $77.5 per barrel benchmark is a fair deal. So, the budget will be based on this benchmark.

    “The executive arm also prevailed on us to reach a reasonable consensus on the benchmark. I can tell you that this $77.5 will be acceptable to the executive too.

    “With this, the 2014 budget will be given accelerated consideration by the National Assembly.”

    When contacted, a Principal Officer of the House said: “Well, when we had our Executive Session on Wednesday, the Speaker, Hon. Aminu Waziri Tambuwal announced to us that the Joint Conference had decided on $77.5 per barrel benchmark.

    “All Representatives commended the decision of the Joint Conference and agreed that it was time to move forward.

    “At this with jack up, states would be able to meet up with some financial challenges.”

    A top source said: “The curious thing to note is that governors friendly to Mr. President have also prevailed on their members in the National Assembly to accommodate the 2014 Budget within either $79 or $77.5 benchmark.

    “According to some of the governors, they have been unable to pay salaries in their states as a result of piece-meal release of the allocations from the Federation Account.

    “A few other PDP states are backing the $79 or $77.5 benchmark because after managing to pay salaries, they have little left for capital projects and payment of debts.

    “What they have done is to mount campaign secretly for $79 or $77.5 benchmark in order not to offend President Goodluck Jonathan, who is the national leader of the party.”

    There were indications that President Goodluck Jonathan might not be physically present based on security reports.

    There were fears that the President may be heckled at following the increased strength of the opposition in the National Assembly.

    A member of the House said: “We have been told that Okonjo-Iweala may lay the budget before the National Assembly instead of the President.

    “To us, it does not matter whoever is making the budget presentation to us.”

     

  • ‘Agric budget implementation low’

    ‘Agric budget implementation low’

    The Senate Committee on Agriculture has lamented that the performance of capital expenditure approved in the 2013 budget fell below the expectations of Nigerians and the National Assembly.

    Its chairman, Barr. Emmanuel Bwacha made the remarks in Jos yesterday while on oversight function at the National Veterinary Research Institute (NVRI) Vom, Plateau State.

    He said:“The world is aware of assurances given by the Federal Government that it will give the agricultural sector serious attention through the implementation of strategic reform programmes.

    “But it has become obvious that we are not matching words with action considering the poor performance of annual budgets.

    “The performance of capital expenditure in the 2013 budget falls below 50 per cent, how then can we turn around the agricultural sector in this way? We are not matching words with action.”

    According to him, if the nation is interested in making any head way in the agric sector, there is the need to increase funding so that the sector could be active by making it private investor driven. He called for the commercialisation of the sector.

    “That is the position of the Senate, more money should be injected into the sector,” he insisted.

    In a welcome address, Executive Director of NVRI, Dr. Muhammed Sani Ahmed lamented that the research institute got only 43 per cent of it’s approved estimates.

    He said: “Due to the shortage of funding, the institute has to plough back it’s internally generated revenue to augment. So far the institute is indebted to several contractors.”

  • All just for budget presentation?

    SIR: President Goodluck Jonathan was billed to present the 2014 budget to the two chambers of the National Assembly on Tuesday. Unfortunately, the presentation was put on halt after all the necessary arrangements were put in place to receive the number one citizen. There were conflicting reports on why the presentation was put on halt; some says it was as a result of plan by the members of the nPDP to boo the President as retaliation for the humiliation suffered by their leaders when they visited the National Assembly sometime in September. Others say it was due to the disagreement between the two chambers on the appropriate benchmark for the crude oil.

    Whatever the reason may be is irrelevant to me. What puzzled me on the issue was that, as part of the arrangement for the President’s visit, a circular was promptly released by the Head of the Personnel Management of the National Assembly directing all staff on grade level 1-14 not to come to their offices until 2:00pm when it was believed that the program must have been over. In other words, only those on the Directorate cadre should avail themselves for their duties. The question I want to ask here is, is there a dignity in labour if workers are barred from their offices just because the President is coming? Are they not serving the same government? If they are no longer trusted, let them all be sacked and replaced with others who are assumed to be more loyal to the system. Thanks to unemployment grinding the land, you would have seen mass exodus today.

    I am saying this without any fear of contradiction; the action taken by the National Assembly management to bar their staff from their offices as part of preparation for the President’s visit is not only objectionable, it is a disgrace. It does not happen anywhere else in the world; not even in war-ravaged countries! Let us learn to attach dignity to labour.

     

    • Muhammad S. Adamu Auta

    Badariya, Birnin-Kebbi

    Kebbi State

  • Experts want citizens participation in budget monitoring

    The need to ensure government at all levels, particularly the grassroots are held accountable for activities within their jurisdiction necessitated the recent two-day capacity building seminar organised by the Human Development Initiatives (HDI) in Lagos. The seminar, which is the second in the series, focused on budgeting at the local government level which is the first step of planning needed for any feasible change.
    Participants comprising coordinators of watch group, local government budget officers and head of departments, National Orientation Agency (NOA) and media practitioners, were trained on how to get involved fully in order to ensure transparency and accountability in governance.
    The opening day had Professor Bolaji Owosanoye, Executive Director, HDI, explain the reason behind the project to participants. In his remarks, he emphasised the prominent position of local government in ensuring social services are delivered to the people at the grassroots even as he stressed active participation of citizens in the budgeting process.
    Taking participants on the tools and laws for citizens’ participation in the budget process was Mr. Victor Abel of the Centre of Social Justice.
    Abel stated “that the exclusion of the people from the budgetary process of the county will not only lead to a short-term apathy, but a near long run revolution that will cripple the entire economy.”
    In her presentation entitled: ‘Using the Freedom of Information Act for budget tracking and reporting’ Deputy Director, Media Rights Agenda, Jennifer Onyejekwe, observed that “The Freedom of Information (FOI) Act 2011 gives any person the right to ask any public institution for any record, data or information that is held in the institutions, custody. It is a proactive disclosure as a means to promote transparency in governance.”
    Proffering solution on how to monitor and track budgets and its implementation, Mr. Femi Adesina, Deputy Managing Director, The Sun Publishing Company, publishers of The Sun Newspaper titles, called on media houses to involve figure-oriented persons in their rank to ensure proper scrutiny and tracking.