Tag: budget

• President to present  N27.5tr Appropriation Bill tomorrow

Tomorrow’s presentation of the N27.5 trillion Budget 2024 to the National Assembly by President Bola Ahmed Tinubu will put senators and representatives under pressure to pass the Appropriation Bill before end of next month.

The Federal Executive Council (FEC) approved the bill for presentation at its meeting yesterday, Budget and Economic Planning Minister Atiku Bagudu told reporters at the State House in Abuja.

He put the targeted revenue at N18.32 trillion.

According to him the N27.5 trillion proposal is an increase of over N1.5 trillion when compared to the earlier projection of N26.01 trillion.

He also said that the deficit was lower than that of the outgoing year.

The lawmakers would have to work round the clock to screen the figures and pass the Bill it for the President’s assent expected to be by December 31.

This is line with the objective of keeping the January-December Budget Cycle.

A source said: “Don’t forget that the Senate President, who is the Chairman of the National Assembly, had vowed the commitment of the 10th National Assembly to keep to the January-December cycle.

“Also, don’t forget that the President had warned ministers and heads of Ministries, Departments and Agencies (MDAs) to always honour the summons of the National Assembly Committees as a matter of duty.

“Gone were the days when heads of MDAs will travel out of the country to evade appearing before relevant committees.

“After the presentation of the budget on Wednesday (tomorrow), the National Assembly will still have a clear one month period to consider and pass the budget.”

Another source said the Chairman of the Senate Committee Appropriation, Solomon Adeola has demonstrated to be a goal-getter on critical national assignments.

The source said: “When he was the chairman of the Finance Committee during the 9th Senate, he ensured that important Bills like the Finance Bill were passed in record time even if he had to work for 24 hours to get the job done.

“He has equally said that apart from MDAs appearing before relevant committees, he will summon any head of MDAs that has issues to explain their allocations.”

But another senator said that getting the budget ready might be tedious for the lawmakers going by the enormous work involved.

The President will tomorrow present the Appropriation Bill to a joint session of the National Assembly.

The Appropriation Bill will contain the estimated income and expenditure of the Federal Government for the next fiscal year.

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It is the first full-year budget to be presented by Tinubu, who assumed office on May 29.

The Nation learnt that Tinubu conveyed his intention to address the joint session of the legislative chambers through the Senate President and House of Representatives Speaker Tajudeen Abbas.

The two leaders are expected to read the letter to senators and members of the House of Representatives during today’s plenary.

Speaking at a retreat for Chairmen and Deputy Chairmen of the House Standing Committees yesterday, Speaker Abbas said that the budget will be presented in a few days.

The House notice paper containing activities for plenary for the week sighted by The Nation left tomorrow blank without any activity unlike today and Thursday.

But when contacted, spokesman of the House, Akin Rotimi, confirmed that the budget will be presented this week. He was however silent on the date.

He merely said “it will be presented this week”.

Last week, the National Assembly passed the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

The passage of the MTEF/FSP usually heralds the presentation of the appropriation to a joint session of the federal legislature by the President.

In the MTEF/FSP report, the National Assembly approved proposals by the executive for the 2024 Budget which include the sum of N26 trillion aggregate expenditure for 2024, N10.2 trillion Recurrent Expenditure, made up of Personnel Costs (MDAs) of N4.49 trillion; Capital Expenditure (exclusive of Transfers) of N5.9 trillion; Special Intervention (Recurrent) of N200 billion; and Special Intervention (Capital) of N7 billion comprising the aggregate FGN Expenditure of N26 trillion.

It also approved a revenue projection of N16.9 trillion; N9 trillion budget deficit; N7.8 trillion borrowings and statutory transfers of N1.3 trillion.

Others are N8.2 trillion for debt service, N243.6 billion for sinking fund and N1.27 trillion for Pension and gratuities.

It also approved the N26.1 trillion proposed as 2024 budget and other parameters as proposed by President Tinubu.

The oil price benchmark for next year was pegged at $73.96 and oil production at 1.78 million barrels per day.

Other parameters approved are: Gross Domestic Product (GDP) growth rate of 3.76 per cent; inflation rate of (21.40 per cent); suggested benchmark exchange rate at N700/$ and projected budget deficit of N9.04 trillion.

The report reads in part: “FGN recommended spending N26trillion with N16.9trillion as retained revenue. N9 trillion budget deficit (including GOEs), N7.8 trillion in new borrowings (including borrowing from foreign and domestic sources).

 “N1.3 trillion worth of statutory transfers, an estimated N8.2 trillion in debt service, N234.6 billion in the sinking fund, N1.27 trillion in pension, gratuity and retiree benefits.

“Total recurrent (non-debt) of N10.2 trillion and N4.49 trillion as capital expenditure.

The Senate yesterday passed the 2024 – 2026 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP). 

It followed the Senate’s consideration and adoption of the report of the Joint Committees on Finance, Appropriations, National Planning and Economic Affairs and Local and Foreign Debts on the MTEF/FSP.

The report was presented by the Committee Chairman on Finance and Chairman of the Joint Committee, Senator Sani Musa (APC – Niger East).

The Senate approved N26 trillion aggregate expenditure for 2024.

The sum comprises N10.2trillion for recurrent expenditure, including personnel costs for ministries, departments and agencies (MDAs) of N4.49 trillion; capital expenditure (exclusive of transfers) of N5.9trillion; special intervention (recurrent) of N200 billion; and special intervention (capital) of N7billion.

The Senate also approved a revenue projection of N16.9 trillion, N9 trillion budget deficit, N7.8 trillion borrowings and statutory transfers of N1.3 trillion.

Others are N8.2 trillion for debt service, N243.6 billion for sinking fund and N1.27 trillion for pension and gratuities. 

The committee, in its other recommendations adopted by the Senate, called for the winding up and probe of NIPOST.

It said: “Having discovered that the subsidiaries of NIPOST so created are irregular and illegal, we therefore recommend for them to be wound up and deregistered immediately.

“The sum of N10 billion released by the Ministry of Finance for the proposed NIPOST restructuring and recapitalisation be investigated and the funds fully recovered if established to be injudiciously utilised by the relevant committee of the Assembly charged with the responsibility of fiscal prudence.

“All tax waivers not directly linked to non-governmental/ non-profit organisations should not be granted.”

It also said all tax waivers from 2015 to date should be investigated by the relevant committees of the Senate. 

It further recommended that the oil price benchmark of USD$73.96, $73.76 and $69.90 per barrel be approved for 2024, 2025, and 2026.

Other recommendations include: “That the daily crude oil production of 1.78 mbpd, 1.80 mbpd, and 1.81 mbpd, for 2024, 2025, and 2026 respectively be approved subject to NNPC confirmation of actual and verifiable deliveries.

“The Exchange Rate of N700, N665,61, and N669.79 to US$1 proposed by the Executive for the periods 2024-2026 be considered for approval with Federal Government’s vigorous drive to enhance local production (both oil and non-oil) for increased foreign reserve growth.

“That all items locally produced should be outrightly banned from importation and customs tariffs amended accordingly.

“That CBN should ensure that banks have access to FOREX in order to provide funds to importers and other users to prevent patronage of the parallel market.

“That, in light of the Federal Government’s response of fiscal measures to stimulate the economy by significant investment in infrastructure, SMEs, and the agricultural sector, the GDP growth rates of 3.76 per cent, 4.22 per cent, and 4.78 per cent during the years 2024, 2025, and 2026 be approved.

“That the inflation rate of 21.40 per cent in 2024, 20.30 per cent in 2025, and 18.60 per cent in 2026 be approved.

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“That the Federal Government’s target-setting approach and its determination to enhance the major revenue-generating agencies collection efficiency will support the fiscal deficit estimate of N9 trillion (including Government Owned Enterprises (GOEs) is noted and hereby approved.”

The committee urged the Federal Government to continue to enforce the Performance Management Framework for GOEs by ensuring that they operate in a more fiscally responsible manner while reviewing their operational efficiencies and declared costs-to-income ratios.

It added: “That the N7.8 trillion in new borrowings (both domestic and foreign) be supported as well, given the country’s current effective debt management strategy, which has moderated borrowing costs and decreased the amount of short-term debt in the portfolio and refinancing risk.

“That the National Assembly begin the process of amending the Fiscal Responsibility Act (FRA, 2007) in order to enhance the agencies ability to enforce fiscal responsibility and impose sanctions on erring corporations.”

The Senate adopted the recommendation that the National Assembly Standing Committees should review the laws governing the activities of all revenue-generating agencies.

This, it said, is to identify specific sections or clauses that need to be amended in order to plug waste and increase the government’s capacity to generate revenue.

The Senate urged Federal agencies to deploy ICT in the collection of all revenues, including stamp duty activities, in order to block leakages.

The report adds: “The Budget Office of the Federation and the Ministry of Finance Budget, and National Planning (should) re-evaluate the underlying assumptions for all Federal Government agencies’ income targets in order to confirm the veracity of those assumptions and the effects.

“The Federal Government should continuously assess the qualifications and performance of agency heads in order to guarantee that the government’s total income target as stated in the MTEF/FSP and the yearly budgets are consistently met with adequate sanction where necessary.

“That all MDAs pay for services provided by other government agencies on time and in full unless it is determined that the beneficiary agencies are statutorily exempt from such payments.”

“That Ministry of Finance Incorporated (MOFI) examine the activities of all government agencies currently operating under the partial and full commercialisation arrangement allowing them to compete with their peers in the private sector and thereby making a more meaningful contribution to the Federal Government’s revenue generation drive.

“That the Bureau of Public Enterprises Act be amended to remove the clause(s) that create conflict between BPE and MOFI where MOFI should be the authorised custodian of all Federal Government assets, both liquid and physical.

“That the Nigeria National Petroleum Corporation Limited (NNPCL) should work towards reducing its cost of production and operational costs with the view of increasing available government revenue.”

Necessary sacrifices must be made to generate enough revenue and reduce Nigeria’s high deficit financing, the Minister of Finance/Coordinating Minister for the Economy, Mr. Wale Edun, submitted yesterday.

He foreclosed government’s reliance on borrowing to fund the next year’s 2024 Budget, saying the cost of taking foreign loans would be too heavy for developing nations to shoulder.

Edun spoke when he appeared before the Senator Sani Musa-led joint Senate Committee scrutinising the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) in Abuja.

The minister made the assertions before the panel in the company of the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Zacch Adedeji and the Director-General of the Debt Management Office (DMO), Ms. Patience Oniha before lawmakers called for a closed session.

Edun insisted that the best was for Nigeria to fund its annual budgets was to invest more money on revenue-generating infrastructure.

According to him, advanced countries have raised their interest rates to bring down inflation rate and to stabilise their economies, adding that accessing foreign loans will be very expensive for a developing countries to cope with.

Edun said: “Clearly the environment that we have now, internationally as well as nationally we are in no position to rely on borrowing.

“We have an existing borrowing profile. Our direction is to reduce the quantum of borrowing or intercepting deficit financing in the 2024 Budget.

“Simply put internationally there is focus among rich countries on bringing down the inflation rate to stabilize the economies and give them opportunity for investment growth.

“They are in the process, sacrificing that immediate goal for compacting their economies, or at least contracting the money supplies and pushing up the interest rates and of course high interest rates and investments don’t go together.

“What is left for us to access those funds are expensive. So, it is the last thing that we must rely on. “As we know we have all the figures on debt servicing and cushioning 98 per cent of government revenue.

“The last thing you can think of is to pile up more debts. The government needs to not just maintain its activity, it needs to spend more.

“If you look at government spending, if you look at the budget as a percentage of GDP, ours is one of the lowest being 10 per cent. Even Ghana is at 25 per cent while rich countries are at 50 per cent.

“The very rich countries have to be most advanced in terms of social safety nets and its social security system at 70 per cent of GDP. Government spending definitely will lead to increase.

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“The number one source of revenue especially in short term, even in the medium term is all revenue.”

Musa earlier fears that the revenue projections of the ministries, departments and agencies of the Federal Government that have so far appeared before his panel were far less than what the Federal Government has proposed as income in the 2024 fiscal year.

He noted that going for external interventions would definitely not be an option because it would further push the country into deficit financing.

Musa said: “Currently there are lots of leakages in the use of government resources. A lot of funds being generated as revenues by most MDAs are not being remitted as at when due. Some even remit funds a year after they collected the money.

“The office of the Accountant General of the Federation should look properly in that direction. The current practice of delaying the remittances of revenues by the MDAs had created a room for the misappropriation of those funds.

“After meeting with the Nigerian Customs Service officials yesterday, we realise that there were lots of shortfalls they are experiencing as a result of incidences of waivers.

“We want to know who is issuing those waivers. Is it the FIRS or the Ministry of Finance? We are also interested in knowing details of the Customs modernization project, known as e-customs.

“The Senate Committee on Finance is interested in knowing the type of agreement that was signed on behalf of the Federal Government of Nigeria.

“What is the value of the e-customs agreement? How much is Nigeria expecting? We are tired of judgement debts all over the place. We need to know the plans on ground to collect excise duties and other tariffs so that we won’t run a deficit budget again next year.”

The Senate yesterday explained why the National Assembly accelerated its passage of the 2023 Supplementary Appropriation Bill of N2.17trillion within 48 hours.

It said the budget needed to be passed to allow for speedy implementation in view of the limited lifespan of the budget which terminates on December 31, 2023.

The budget was submitted to the National Assembly by President Bola Ahmed Tinubu on Tuesday and both the Senate and House of Representatives suspended their relevant rules to ensure that the bill was passed for both first and second reading.

It was referred to the Committees on Appropriation in the two chambers who worked on it on Wednesday and presented their reports on Thursday which was considered and approved.

The Vice Chairman, Senate Committee on Appropriation, Senator Mohammed Ali Ndume, gave the explanation while responding to questions from reporters in Abuja on Saturday.

Ndume told journalists that the National Assembly accelerated the budget passage because of certain national interest.

He said, “There have been increases in the price of fuel, costs of essential services and food items have gone up in the country following the withdrawal of fuel subsidy.

“Workers embarked on strike many times as a result of this and there were negotiations between the organised labour unions and the Federal Government.

“At the end of the negotiations, the Labour and the Federal Government agreed that workers would be paid N35,000 in addition to their minimum wage.

“If N35,000 is paid to each of the over 1.5 million workers, the amount is huge. The money was captured in the supplementary budget.

“There were also agitations among parents of students in tertiary institutions following the increment in tuition fees and the Federal Government came up with a wonderful idea of giving loans to students in tertiary institutions hence provision of N5.5 billion was made in the supplementary budget for that purpose also.

“The two chambers of the National Assembly met on it and we both agreed to jerk it up to N10billion. This is because our members from the House of Representatives argued that the provision of N5billion made for the procurement of the Presidential Yacht was not necessary at the moment.

“It was the yacht money that we added to the initial N5billion allocated for students’ loan which jerked it up to N10billion.

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“We had already acted on the N5billion provided for the presidential yacht and removed it from the budget before the public outcry.

“It is not true that the Senate was silent on the N5billion provided for the yacht. We had harmonised with the House of Representatives before the joint appropriation committee of both chambers prepared and presented their reports. It was even signed by the two chairmen.

“The only thing was that the Navy asked us to forget about the yacht and pleaded with us to allow them have the N5billion so as to enhance their operations especially in the areas of fighting oil bunkering and crude oil theft in the Niger Delta and we immediately told them to utilise their operational funds for that purpose.”

Ndume commended President Tinubu for ensuring that every state of the federation would benefit from the capital projects captured in the supplementary budget.

“There is also the N300billion allocated to the Federal Ministry of Works. It is not for the construction of new roads but to make the existing roads motorable. This is the opportunity to do so now that we are already in the dry season.

“There is no single provision for the National Assembly and we ensured that each geopolitical zone in the country got N8billion to fix roads in their areas,” he said.

He added: “There is also the provision of N8billion for the takeoff of the new ministries that were created by the President Bola Tinubu-led administration. It is very important for them to get certain things put on ground to start working.

“A particular amount of money was also provided in the Ministry of Agriculture which was meant for the purchase of grains as palliatives to encourage farmers to engage in dry season farming so as to guarantee food security.

“Apart from this, the Senate considered that since the Independent National Electoral Commission has its off-cycle elections in Bayelsa, Imo and Kogi states on November 11, the sum of N18billion was captured for that purpose in the supplementary budget, they needed to access the funds for proper conduct of the polls.

“The Nigeria Police Force is supposed to supervise the election and it would need more personnel hence the sum of N20billion was earmarked for that purpose.

“The Nigerian Army would also need additional money to pay special duty allowances to the soldiers on the field who are currently engaged in all the states of the federation. Each of them is being paid a minimum of N5, 000 per day. It is not a small amount of money at all.”

“Another item captured in the budget is housing sector which got N100billion. The thinking of the government is that it will tackle the challenge of housing deficits in most urban areas in the country.

“The sum of N28billion was allocated to the State House. The funds allocated for the presidential fleet was for the maintenance of the aircraft which are serviced abroad in dollars. President Bola Tinubu did not buy a single aircraft.

“He inherited all of them and he has to maintain them otherwise if he skips their maintenance the aircraft would all be grounded.