The Nation Newspaper

Tag: expenditure

  • MAN wants FG to reduce recurrent expenditure

    The Manufacturers’ Association of Nigeria (MAN) is seeking a cut down in Federal Government’s recurrent expenditure to check Nigeria’s rising debt profile.

    The president of the association, Dr. Frank Jacobs, said yesterday in a statement in Lagos that the savings could be channelled into sectors with multiplying revenue generation capacity like agriculture, production and manufacturing.

    Jacobs said the call became necessary because of the associated service charges and the future economic burden such debt would exert on the nation.

    The IMF on May 21 expressed concern over Nigeria’s capacity to repay its debt and urged the Federal Government to mobilize means of generating revenue domestically.

    IMF said the number of low-income economies in debt distress had increased and there was a need for Nigeria to curtail the debt.

    The Fund said that the number of low-income economies that were in debt distress had risen from eight in 2014 to 15 in 2016.

    “Nigeria’s debt stock figure, which is 20 to 23 per cent of the Gross Domestic Product(GDP), is still quite low by any standard, but the issue is the capacity to repay the debts. So interest payment to revenue is an issue,” IMF said

  • MAN wants FG to reduce recurrent expenditure

    The Manufacturers’ Association of Nigeria (MAN) is seeking a cut down in Federal Government’s recurrent expenditure to check Nigeria’s rising debt profile.

    The president of the association, Dr. Frank Jacobs, said yesterday in a statement in Lagos that the savings could be channelled into sectors with multiplying revenue generation capacity like agriculture, production and manufacturing.

    Jacobs said the call became necessary because of the associated service charges and the future economic burden such debt would exert on the nation.

    The IMF on May 21 expressed concern over Nigeria’s capacity to repay its debt and urged the Federal Government to mobilize means of generating revenue domestically.

    IMF said the number of low-income economies in debt distress had increased and there was a need for Nigeria to curtail the debt.

    The Fund said that the number of low-income economies that were in debt distress had risen from eight in 2014 to 15 in 2016.

    “Nigeria’s debt stock figure, which is 20 to 23 per cent of the Gross Domestic Product(GDP), is still quite low by any standard, but the issue is the capacity to repay the debts. So interest payment to revenue is an issue,” IMF said

  • Senate: N2.5tr capital expenditure’ll rejuvenate manufacturing sector

    The National Assembly has assured the Manufacturers Association of Nigeria (MAN) that significant portion of the N2.5 trillion set aside for capital expenditure in the 2017 budget will be injected into expanding the capacity of the manufacturing sector.

    Senate President, Bukola Saraki  said  this would be achieved through legislation  that will make it compulsory for the procurement of Made-in-Nigeria goods, by government Ministries, Departments and Agencies (MDAs).

    Saraki gave the assurance in Lagos during the 45th Annual General Meeting (AGM) of MAN.  He said economic growth can only be sustainment of the Public Procurement Act.

    According to him the Act makes made-in-Nigeria products, the first option of purchase in any government transaction. He noted that a strict application of this law will ensure that a substantial percentage of the N2.5 trillion set aside for capital expenditure in the budget is retained in the local economy for our manufacturers.

    Represented by the Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Adebayo Ibrahim, he  said: “I believe strongly that for Nigeria to maintain the path of economic growth, private sector investment must be encouraged to play a central role in our economic recovery efforts. After five consecutive quarters of contraction, the Nigerian economy grew by 0.55 per cent in the second quarter of 2017.  This is reflective of the improved performances of certain key aspects of our economy in response to concerted government policies and interventions.”

    He said legislature would ensure that the economy cease from being import dependent, design economic growth pathway, while it would ensure that Small, Medium, Enterprises (SMEs) have access to finance. He also pledged effective legislation to reduce importation and other challenges in the manufacturing sector.

  • Senate passes medium term expenditure framework

    The Senate yesterday passed the controversial 2017-2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

    The adoption of the MTEF and FSP followed the consideration of the report of the Committee on Finance, Appropriation and National Planning presented by Chairman, Senate Committee on Finance, Senator John Owan Enoh.

    Some of the salient recommendations of the report which the Senate adopted oil production figure of 2.2 million per day as proposed by the Executive, N305 to $1 exchange rate also as proposed by the Executive.

    The Senate however raised the oil benchmark from $42 per a barrel proposed by the Executive to $44.5 per barrel, an increase of $2.5.

    The committee said  daily oil production has been projected to the average of 2.2 bpd, 2.3mbpd and 2.4mbpd for 2017, 2018 and 2019 respectively.

    It said the government would expect a drastic increase in oil production and revenue generated through oil sources, with the meaningful and inclusive engagement of all stakeholders in the Niger Delta region towards bringing peace and stability in the region.

    It added that “though, the oil production target of 2.2mbpd is achievable, it is dependent on the ability of the Federal Government to curtail the Niger-Delta militant activities in order to halt the drop in crude oil production which declined from 1,912mbpd in January 2016 to 1,818mbpd in June 2016 and thereafter, to 1,721mbpd in October, 2016.”

    On oil price benchmark, the committee said the price of crude oil in the international market fell to as low as about $25 per barrel in mid-January with an increase to more than $50 per barrel in October last year.

    It noted that recent bumpy oil price variations were driven principally by international oil market dynamics such as the decline in the Organisation of Petroleum Exporting Countries (OPEC) output, US oil shale and temporary supply disruptions to Countries like Kuwait, lraq, Libya, Canada and Nigeria. However, while global oil demand growth has proved slightly better than expected, a weaker US dollar and improving sentiment on broader financial markets have also boosted crude oil price.

    “Against this backdrop, the international oil industry watchers forecast oil prices heading slowly towards an average of over $60pb in the near term,” it said.

    The joint committee therefore recommended the adoption of $44.5 per barrel as benchmark price for 2017 Budget.

    On exchange rate, it said that the 2017-2019 MTEF and FSP projects an exchange rate of N305 per dollar for the period of 2017 fiscal year. Notwithstanding, a judicious monetary fiscal policy mix and deliberate government policies to expand the productive base of the economy would be expedient to improve the exchange value of the naira relative to the dollar.

    The committee noted that it has become obvious that the fixed exchange rate regime as implemented in Nigeria was no longer useful.

    “The sustained and widening gap between the official exchange rate and the parallel market has created several loopholes in the system. However, the recent transition from fixed exchange rate regime to flexible exchange regime appears commendable,” it said.

    The committee recommended the adoption of N305/US dollar as proposed by the executive for the 2017 budget.

    It said the CBN should initiate measures that will close the gap between the parallel market and the official exchange rate.

  • Why capital expenditure got 30% in budget

    The desire to reflate the economy through infrastructure development and ensure a more equitable distribution of wealth among the citizens is the reason for the 30 per cent allocation to capital expenditure in the 2016 budget.

    The Minister of Power, Works and Housing, Mr. Babatunde Fashola, who spoke on the sideline of the just concluded Third Ogun State Investors’ Forum in Abeokuta, said the plan of the President Muhammadu Buhari’s administration is to reflate the country’s economy through infrastructure renewal. This, he likened to the American President, Barrack Obama’s stimulus plans and China’s aggressive infrastructure renewal drive which has positioned those countries as a global economic power houses.

    “That is why the Federal Government has committed 30 per cent of its annual budget to capital expenditure. This is the way that economies have been sustained even in times of austerity, and also reflated in times of regression,” Fashola said.

    The minister noted that in an economy where a significant portion of public spending goes to recurrent expenditure, only a small percentage of the society that work in the public sector benefit. Therefore, he explained, that 30 per cent of the N6 trillion budget will come to the open market where artisans, traders, construction companies, and several others will benefit. This, he said, is a more equitable way of redistributing wealth whose impact on the economy will not only be rewarding but sustainable.

    “Every investment in infrastructure yields almost double or treble return in terms of jobs that will be created, and also income that will be generated,” he said.

    But given the financial state of the country, it has become imperative that for these infrastructural projects to be realised, the government would have to either go into a public private partnership (PPP) arrangement or do outright borrowing. The latter option has not really gone done well with Nigerians who are sceptical about the option believing that it will lead the country into further debts.

    Fashola said while some economists have argued that the country should not borrow, in times when  resources are lean, he explained, it becomes imperative to borrow but not for recurrent expenditure like paying salaries, but to invest in infrastructure because infrastructure will ultimately last many more years and pay back.

    “The time value of money is that it will become more expensive to do that same thing it should have been used for as you go further down the lane. If you save in today’s economy and you do not borrow, will you stop complaining that the roads are bad or that there is no power? So borrowing is not the problem, it is just to know if the borrowing is to invest or to consume,” Fashola said.

    Citing an example of the benefits of building infrastructure, the minister said the Lagos-Ibadan express

  • Lagos seeks reduction in recurrent expenditure

    Lagos State Government has said for government to achieve efficient budget performance, government at all levels must reduce recurrent estimate and increase capital expenditure.

    This, government said, will give room for successful implementation of capital projects that will impact on the lives of the masses.

    The state’s Deputy Governor, Dr Idiat Adebule said this at the Institute of Chartered Accountants of Nigeria (ICAN) Symposium on the year 2015 budget with the theme: Come Back Nigeria – The Nation‘s Fiscal Challenges and The Way Forward For the New Administration.

    Adebule regretted that over the years, the structure of the nation’s budget has not favoured significant infrastructure developments because previous budgetary provisions have been in favour of recurrent at the expense of capital expenditure, stating that this ugly trend has been the major reason why the nation’s budgets performed below expectations in the last few years.

    According to her, lack of budget discipline over the years and its attendant consequences calls for decisive reforms that will reverse the direction in which the economy is heading to save the country.

    She urged all relevant government agencies on budget implementation to adhere strictly with the budgetary provision as approved in the fiscal year.

    She said: “A budget is meant to be implemented as approved. Lack of budget discipline as demonstrated in incurring expenditure in excess of the amount budgeted without following the due process is a recipe for budget failure.”

  • Lagos seeks reduction in recurrent expenditure

    Lagos State Government has said for government to achieve efficient budget performance, government at all levels must reduce recurrent estimate and increase capital expenditure.

    This, government said, will give room for successful implementation of capital projects that will impact on the lives of the masses.

    The state’s Deputy Governor, Dr Idiat Adebule said this at the Institute of Chartered Accountants of Nigeria (ICAN) Symposium on the year 2015 budget with the theme: Come Back Nigeria – The Nation‘s Fiscal Challenges and The Way Forward For the New Administration.

    Adebule regretted that over the years, the structure of the nation’s budget has not favoured significant infrastructure developments because previous budgetary provisions have been in favour of recurrent at the expense of capital expenditure, stating that this ugly trend has been the major reason why the nation’s budgets performed below expectations in the last few years.

    According to her, lack of budget discipline over the years and its attendant consequences calls for decisive reforms that will reverse the direction in which the economy is heading to save the country.

    She urged all relevant government agencies on budget implementation to adhere strictly with the budgetary provision as approved in the fiscal year.

    She said: “A budget is meant to be implemented as approved. Lack of budget discipline as demonstrated in incurring expenditure in excess of the amount budgeted without following the due process is a recipe for budget failure.”

    “The main yardstick for measuring a well designed and implemented budget is not its size but the amount of improvement it has brought into the people’s lives, regretting however that, the nation’s budgets over the years have fallen short of this expectation which has led to an increased poverty and infrastructure decay in the recent past. In most cases budgets are not approved early to address   the needs of the public, resulting to return of funds to the treasury at the end of the year when a lot of development projects are begging for implementation.”

  • Oshiomhole presents N156b budget proposal

    do State Governor Adams Oshiomhole presented yesterday a budget proposal of N156.551 billion for next year.

    The proposal was about N4billion lower than this year’s budget.

    Fifteen lawmakers elected under the platform of the All Progressives Congress (APC) were present at the ceremony.

    It was the first time the state’s budget was presented at the old hallowed chambers where the lawmakers relocated since July.

    Oshiomhole lamented that the 2014 revenue performance was affected by the drop in allocation from the federation account as the actual revenue realised in June was N43.256billion as against N117.48billion.

    Tagged Budget of Developmental Consolidation, the governor said the budget was informed by the compelling need to accomplish more for the people and accelerate the pace of work in the projects and programmes in all sectors of the economy.

    The budget proposal consisted of N 87.56 billion as Capital Expenditure representing 55.77 per cent.

    The proposed Recurrent Expenditure is N68.99 billion which represents 44.23 per cent.

    A breakdown showed that road construction got N16.95 billion, Agriculture N1.055 billion, Judiciary N2.955 billion, N18.1 billion for the education sector  and N9.29 billion for the health sector.

    Others are N18.5 billion for flood and erosion/environmental protection, N0.981 billion for water supply and N0.500 billion for rural electrification.

    The governor said: “As part of our continuous effort to entrench efficient and effective service delivery system, we will continue to encourage and promote the training and retraining of our civil servants, including teachers, to enable us build a highly skilled and vibrant work force that will always be alive to its responsibilities.”

  • Wasteful expenditure

    Wasteful expenditure

    • Soyinka is right; Maku’s tour is a scam

    When we thought the country was through with reckless deployment of resources, information minister Labaran Maku has reminded a bewildered nation that nothing has really changed in the 14 years of public affairs management by the ruling People’s Democratic Party (PDP). Since last year, a large party of journalists assembled by the information minister has been on an endless road show called the National Good Governance Tour.

    According to the minister who himself was a journalist, the tour was meant to showcase what the federal and state governments have achieved in recent times. So far, the tour has taken the 120-strong band to about 16 states where the minister led the group to inspect mainly projects executed by the state governments. In each state, he capped the tour with a town hall where he pontificated on what has been done, how they ought to have been done and what he thought has not been done well.

    A lot is wrong with the concept and packaging of the jamboree. First, this is a federation. The Federal Government has no business assessing the performance of state governments. Worse still, there is very little to show by Abuja that gulps about 55 per cent of national resources. In most of the states, the tour is all about what the harassed state governments have managed to do with the little resources allowed them in the skewed federal fiscal system bequeathed the country by the military.

    Second, as Edo State Governor Adams Oshiomhole has pointed out, it is sickening that the Federal Government could be presenting a bill of millions to state governors. At a time that workers and the people are agitated that living wages are not being paid and infrastructure crying for attention, how could Maku be exerting such pressure on a meaningless project?

    It is also unfortunate that media houses could release journalists to join the train. How could men meant to keep the gate and keep their eyes on the national till be so myopic as to allow participation in such a futile exercise? Organisations in the media, including the Nigeria Union of Journalists, the Nigerian Guild of Editors and the Newspapers Proprietors Association of Nigeria should immediately withdraw participation from the tour and issue statements denouncing it as wrongful deployment of resources.

    Maku’s explanation that the governors were carried along in taking the decision is unhelpful. It is puerile and illogical. Again, Governor Oshiomhole’s explanation has answered him. If the group wanted to tour projects and applied to pay him a visit, it would have been accorded all respects due visitors. What is clearly unacceptable on the part of state governments is that they were required to pick the bill. But, whatever the source of the fund for such an unnecessary tour, it is regrettable that about 10 years after another information minister, Professor Jerry Gana, treated the public to such a show, we are back dancing on the same spot.

    The world is watching us. The fate of the black race is tied to the progress and choices made by Nigeria. When public affairs are handled by insensitive officials, such hopes are misplaced and the government would have disappointed the Nigerian people, the African continent, the black race and the entire global community. The country can take consolation in the fact that men like Nobel Laureate Wole Soyinka, Borno State Governor Kashim Shettima and Governor Babatunde Fashola of Lagos State, and, indeed, the Action Congress of Nigeria have roundly condemned the jamboree as a fraud.

  • Imoke advises councils on expenditure

    Imoke advises councils on expenditure

    The State Governor, Senator Liyel Imoke, has urged Local Government Councils in the state to wholeheartedly adopt the Medium Term Expenditure Framework (MTEF) given its numerous benefits.Imoke who was represented by his Deputy, Mr. Efiok Cobham, stated this in Calabar at a Budget Consultative Forum for the Cross River South Senatorial District.

    He noted that the adoption of MTEF Budgeting method had enabled countries worldwide with huge and material resource base to achieve significant strides in their economic development.

    The governor described MTEF as a method of budgeting which places premium on careful ordering of priorities and implementation of policies and programmes through accountable and transparent financial management.

    He further observed that the adoption of MTEF would improve relationship with the states development partners, as well as portray the State’s methods of accounting in good light to meet international standards.

    Senator Imoke assured chairmen of councils that the Consultative Forum would afford them the opportunity to address issues related to budgeting and revenue streams for the benefit of all their constituencies.

    He informed that the consultative process has been decentralized to enable the senatorial districts with peculiar resources and needs to make their inputs into the 2013 budget estimates.

    The State Governor, opined that the forum would generate ideas which would not only help in planning but enrich the implementation of the budgetary framework.

    In his address, the Special Adviser, Budget, Monitoring and Evaluation, Ntufam Peter Oti noted that the interface was in furtherance of the reformed agenda of this administration which has consistently placed premium on wide- spectrum consultations for the evolution of people- centered policies and infrastructural development.

    He noted that the Government of Senator Liyel Imoke made Due Process, Transparency and Accountability its focal points for which procurement processes and budgeting were tailored to ensure prudence and achieve value for every kobo spent by Government.

    In his address, the Commissioner of Local Government Affairs, Chief Peter Ojie disclosed that MTEF was introduced in 2007 with three pilot government agencies; Ministry of Agriculture, Ministry of Education and Forestry Commission, participating,  was scaled up in 2008 to all Ministries, Departments and Agencies (MDAs) and was replicated in all the eighteen Local Government of the State.

    He maintained that since then, there had been collaboration between the Local Government and the Budget, Monitoring and Evaluation Department to build the capacity of functionaries at the third tier to ensure efficient budgeting and implementation process.

    The event featured the presentation of a paper titled “Participatory Budgeting as a tool for Democratisation of the Budgeting Process in Cross River State, Nigeria” by a visiting Professor of Accounting, From Madona University, Okija, Professor Austin Nweze.