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2021 budget: Senate approves President Buhari’s N2.343trn external borrowing request

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Chamber Senate
Senate chamber
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The Senate has approved President Muhammadu Buhari’s request for the authourisation of N2.343 trillion ($6.183 billion USD) as External Borrowing in the 2021 Appropriation Act.

This was just as it directed the Minister of Finance, Budget and National Planning, Zainab Ahmed, the Director General of the Debt Management Office, Patience Oniha, and the Governor of the Central Bank of Nigeria, Godwin Emefiele, to submit to the National Assembly within ten working days (excluding the day of close of trading), a letter containing the United States Dollars amount so raised and received as a result of the approval together with the applicable exchange rate.

The sum is expected to be sourced through the Issuance of Eurobond in the International Capital Market.

The approval by the upper chamber followed the consideration of a report by the Committee on Local and Foreign Debts.

Chairman of the Committee, Senator Clifford Ordia (PDP, Edo Central),  said that in considering the President’s request, the Committee noted the serious concerns of Nigerians about the level of sustainability and servicing of Nigeria’s External Borrowing.

According to him, “due to the short fall in our annual revenues in relation to our need for rapid infrastructural and human capital development, we had to pass deficit budget every year requiring us to borrow to finance the deficit in our budget.”

Ordia explained that the new borrowing was calculated at Exchange rate of USD1/N379, and raised from multiple sources – multilateral and bilateral lenders through the issuance of Eurobonds in the International Capital Market.

He emphasized that the proceeds of the USD$6.183 would be used to fund various specific capital projects specifically from priority sectors of the economy namely; Power, Transportation, Agriculture, and Rural Development, Education, Health, Provision of counterpart funding for Multilateral and Bilateral Projects, Defense and Water Resources.

The lawmaker disclosed that the final terms and conditions – the interest rate and tenors in the case of Eurobonds – can only be determined at the point of issuance of the Bonds in the International Capital Market and would be subject to market conditions prevailing at the time of issuance.

He added that the Primary listing of the Bond will be on the London Stock Exchange while the Secondary Listing will be on the Nigerians Stock Exchange and Financial Markets Dealers Quotations (FMDQ) Securities Exchange.

Ordia observed that, “multilateral and bilateral institutions operate on standard terms and conditions and Nigeria secures the best terms and conditions within the context of the market.”

Accordingly, the Senate while adopting the resolutions of the Committee on Local and Foreign Debt approved the issuance of $3 billion USD but not more than $6,183,081,643.40 Eurobond in the International Capital Market for the implementation of the new External Borrowing of N2,343,387,942,848, for the financing of part of the deficit authorized in the 2021 Appropriation Act.

It also approved that the amount authorized may be raised from multiple sources such as the International Capital Market and any other Multilateral or Bilateral sources as may be available.

In addition, the upper chamber directed the Minister of Finance, Budget and National Planning, the Director General of the Debt Management Office and the Governor of the Central Bank of Nigeria to submit to the National Assembly within ten working days (excluding the day of close of trading) a letter containing the United States Dollars amount so raised and received as a result of the approval together with the applicable exchange rate.

In his remarks, the Senate President, Ahmad Lawan, stressed that the approved external borrowing is not a fresh loan by the President Buhari administration but a request captured in the 2021 Appropriation Act passed by the National Assembly last year.

He, however, tasked Committees of the National Assembly to carry out strict oversight on how the loans are applied to the implementation of the 2021 budget.

Lawan urged Ministries, Departments and Agencies of Government entrusted with the management of the funds to ensure prudent application to projects across the country.

“Our committees should be alert on how the funds that will be borrowed will be used.

“No frivolous expenditures should be entertained. I imagine that everybody in the trust of public funds, especially this laws will be as prudent and economical as possible”, he said.

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Business & Economy

Tinubu To Present 2024 Supplementary Budget To NASS

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President Bola Tinubu Presenting 2024 Budget Proposal to the Joint Session of National Assembly
President Bola Tinubu Presenting 2024 Budget Proposal to the Joint Session of National Assembly
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President Bola Tinubu will soon present the 2024 Supplementary Budget to the National Assembly (NASS).

“I submitted the last budget to you,” the President said when he addressed a joint sitting of the National Assembly on Wednesday.

“You expeditiously passed it. We are walking the talk. I will soon bring the Year 2024 (Supplementary) Appropriation Bill. That is just for your information,” the President said in his terse speech at the joint sitting to mark the Silver Jubilee Of Nigeria’s 4th Republic.

In his response, Senate President Godswill Akpabio, said, “Thank you, Mr President, we will be expecting the Supplementary Appropriation Bill of 2024 as soon as possible.”

Also, at the joint sitting which coincided with the first anniversary of the Tinubu administration, the President confirmed ‘Nigeria, we hail thee’ as the “latest national anthem”.

Tinubu said, “You sang out the latest national anthem, ‘Nigeria, we hail thee’. This is our diversity, representing all characters and how we blend to be brothers and sisters.”

The President pleaded with both the Senate and the House of Representatives to continue to collaborate and work together with the administration to build the country on the path of sustained progress and development.

“We have no other choice; it is our nation. No other institution or personality will help us unless we do it ourselves. No amount of aid from foreign countries or any other nation (will fix us), they take care of themselves first. Let us work together as we are doing to build our nation, not only for us but for generations unborn,” he said.

 

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We Have No Magic Wand, Tackling Inflation Will Take Time — Cardoso

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Yemi Cardoso,CBN Governor
Yemi Cardoso,CBN Governor
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The Governor of Central Bank of Nigeria, Mr. Olayemi Cardoso has urged the citizens to be patient over the fight against current inflation and hike in food items in the country.

Cardoso disclosed this while briefing journalists at the end of the Monetary Policy Committee, MPC, meeting in Abuja.

The CBN governor mentioned that there was no magic needed to solve inflation in Nigeria but rather patience.

Also, Cardoso noted that despite pressure from food inflation, the general inflation rate was “moderating”, pointing out that “the tools the Central Bank is using are working”.

He stated, “I have several times and I will say again, there is no magic wand. These are things that need to take their time.

“I am pleased and confident that we are beginning to get some relief and in another couple of months we will see the more positive outcomes from the Central Bank have been doing.”

He added, “The committee thus reiterated several challenges confronting the effective moderation of food inflation to include rising costs of transportation of farm produce, infrastructure- related constraints along the line of distribution network, security challenges in some food producing areas, and exchange rate pass-through to domestic prices for imported food items.

“The MPC urged that more be done to address the security of farming communities to guarantee improved food production in these areas.

“Members further observed the recent volatility in the foreign exchange market, attributing this to seasonal demand, a reflection of the interplay between demand and supply in a freely functioning market system.”

The Central Bank of Nigeria has also blamed the recent volatility of the country’s foreign exchange market on seasonal demand for dollars.

“Members further observed the recent volatility in the foreign exchange market, attributing this to seasonal demand, a reflection of the interplay between demand and supply in a freely functioning market system,” a communique issued by the committee on Tuesday stated.

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Port Harcourt Refinery Begins Full Operations Next Month

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Port Harcourt Refinery
Port Harcourt Refinery
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The 210,000-barrel-per-day Port Harcourt refinery is expected to commence operations by the end of July, following multiple delays.

National Public Relations Officer of the Independent Marketers Association of Nigeria, Chief Ukadike Chinedu, revealed this new timeline on Monday. He noted that the refinery’s operation would boost economic activities, reduce petroleum product prices, and ensure an adequate supply.

In December last year, Minister of State for Petroleum Resources, Heineken Lokpobiri, announced the mechanical completion and flare start-off of the Port Harcourt refinery, the largest in the region.

The refinery consists of two units: an older plant with a 60,000-barrel-per-day capacity and a newer plant with a 150,000-barrel-per-day capacity. The refinery was shut down in March 2019 for the first phase of repairs after the government enlisted Italy’s Maire Tecnimont as a technical adviser and appointed oil major Eni as a technical adviser.

On March 15, 2024, NNPC Limited’s Group Chief Executive Officer, Mele Kyari, announced that the Port Harcourt refinery would begin operations in about two weeks. He made this statement during a press briefing following his appearance before the Senate Ad hoc committee investigating the various turnaround maintenance projects of the country’s refineries.

“We achieved mechanical completion in December,” Kyari stated. “We now have crude oil stocked in the refinery and are conducting regulatory compliance tests. The Port Harcourt refinery will start within two weeks.”

However, two months later, the refinery had yet to commence operations.

In an interview, IPMAN’s Ukadike emphasized that the work done on the refinery represented a complete overhaul rather than mere rehabilitation. He assured that every effort was being made to meet the July deadline.

Ukadike said, “When we visited, the MD informed us that the refinery was nearly ready and would start production by the end of July. The overhaul is extensive, with all the armoured cables replaced and everything almost brand new. The maintenance turnaround is massive, with work being done day and night. All hands are on deck to meet the target. By the end of July, the refinery should be operational.”

When asked about the government’s previous unfulfilled promises to restart the refinery, Ukadike acknowledged the delays but noted that no reasons were given for missing the last deadline in April

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