***As Executive budgets additional 2.557trn for petrol subsidy in 2022
The Senate has received a request from President Muhammadu Buhari to amend the 2022 Appropriation Act passed by the National Assembly in December, 2021.
The request was contained in a letter dated February 10, 2022, and read during plenary by the Senate President, Ahmad Lawan.
Accordingly, President Muhammadu Buhari in the letter said it was imperative to remove all capital projects that were replicated in the 2022 Appropriation Act.
He disclosed that 139 out of the 254 projects in the budget totaling N13.24 billion had been identified for deletion.
Buhari, therefore, requested the National Assembly to amend the Appropriation Act to provide for Capital Expenditures in the sum of N106,161,499,052 billion naira; and N43,870,592,044 billion naira for Recurrent Expenditures.
The President also requested that an additional provision for N2.557 trillion naira be appropriated by the National Assembly to fund the petrol subsidy in the 2022 Budget Framework which was revised to provide fully for PMS subsidy.
Buhari underscored the need to reinstate four capital projects totaling N1.4 billion in the Executive proposal for the Federal Ministry of Water Resources; and N22.0 billion cut from the provision for the Sinking Fund to retire mature loans needed to meet government’s obligations under already Issued Bonds.
The full text of the letter entitled, “SUBMISSION OF THE 2022 APPROPRIATION AMENDMENT PROPOSAL”, reads:
“As I indicated at the signing of the 2022 Appropriation Act, I forward herewith the Proposals for amendment of the 2022 Appropriation Act (as detailed in Schedules I-V), for the kind consideration and approval by the Senate.
“Let me seize this opportunity to once again express my deep gratitude to the leadership and members of the Senate for the expeditious consideration and passage of the 2022 Appropriation Bill as well as the enabling 2021 Finance Bill.
“It has become necessary to present this amendment proposal considering the impacts of the recent suspension of the Petroleum Motor Spirit (PMS) subsidy removal and the adverse implications that some changes made by the National
Assembly in the 2022 Appropriation Act could have for the successful implementation of the budget.
“It is important to restore the provisions made for various key capital projects in the 2022 Executive Proposal (see details in Schedule l) that were cut by the National Assembly. This is to ensure that critical ongoing projects that are cardinal to this administration, and those nearing completion, do not suffer a setback due
to reduced funding.
“It is equally important to reinstate the N25.81 billion cut from the provision for the Power Sector Reform Programme in order to meet the Federal Government’s commitment under the financing plan agreed with the World Bank.
“In addition, it is necessary to reinstate the four (4) capital projects totaling N1.42 billion in the Executive Proposal for the Federal Ministry of Water Resources that were removed in the 2022 Appropriation Act.
“Furthermore, there is critical and urgent need to restore the N3 billion cut from the provision made for payment of mostly long outstanding Local Contractors’ Debts and Other Liabilities as part of our strategy to reflate the economy and spur growth (see Schedule I).
“You will agree with me that the inclusion of National Assembly’s expenditures in the Executive Budget negates the principles of separation of Powers and financial autonomy of the Legislature. It is therefore necessary to transfer the National Assembly’s expenditures totaling N16.59 billion in the Service Wide Vote to National Assembly Statutory Transfer provision (see Schedule l).
“It is also imperative to reinstate the N22.0 billion cut from the provision for Sinking Fund to Retire Mature Loans to ensure that government can meet its obligations under already issued bonds as and when they mature.
“The cuts made from provisions for the recurrent spending of Nigeria’s Foreign Missions, which are already constrained, are capable of causing serious embarrassment to the country as they mostly relate to office and residential rentals.
“Similarly, the reductions in provisions for allowances payable to personnel of the Nigerian Navy and Police Formations and Commands could create serious issues for government. It is therefore imperative that these provisions be restored as proposed (see Schedule II).
“It is also absolutely necessary to remove all capital project is that replicated in the 2022 Appropriation Act; 139 out of the 254 such projects totaling N13.24 billion have been identified to be deleted from the budget.
“Some significant and non-mandate projects were introduced in the budgets of the Ministry of Transportation, Office of the Secretary to the Government of the Federation and Office of the Head of Civil Service of the Federation (see Schedule III). There are several other projects that have been included by the National Assembly in the budgets of agencies that are outside their mandate areas. The Ministry of Finance, Budget and National Planning has been directed to work with your relevant Committees to comprehensively identify and realign all such misplaced projects.
“It is also necessary to restore the titles / descriptions of 32 projects in the Appropriation Act to the titles contained in the Executive Proposal for the Ministry of Water Resources (see Schedule IV) in furtherance of our efforts to complete and put to use critical agenda projects.
“The Appropriation Amendment request is for a total sum of N106,161,499,052 (One hundred and six billion, one hundred and sixty-one million, four hundred and ninety-nine thousand, and fifty-two Naira only) for Capital Expenditures and N43,870,592,044 (Forty-three billion, eight hundred and seventy million, five hundred and ninety-two thousand, and forty-four Naira only) for Recurrent Expenditures. I therefore request the National Assembly to make the above amendments without increasing the budget deficit. I urge you to roll back some of the N887.99 billion of projects earlier inserted in the budget by the National Assembly to accommodate these amendments.
“However, following the suspension of the PMS subsidy removal, the 2022 Budget Framework has been revised to fully provide for PMS subsidy (see Schedule V). An additional provision of N2.557 trillion will be required to fund the petrol subsidy in 2022. Consequently, the Federation ACCOunt (Main Pool) revenue for the three tiers of government is projected to decline by N2.00 trillion, while FGN’s share from the Account is projected to reduce by N1.05 trillion. Therefore, the amount available to fund the FGN Budget is projected to decline by N969.09 billion.
“Aggregate expenditure is projected to increase by N45.85 billion, due to additional domestic debt service provision of N102.5 billion net of the reductions in Statutory Transfers by N56.67 billion, as follows: NDDC, by N12.61 billion from N102.78 billion to N90.18 billion; NEDC, by N5.90 bilion from N48.08 billion to N42.18 billion; UBEC, by N19.08 billion from N112.29 billion to N93.21 billion; Basic Health Care Fund, byN 9.54 billion from N56.14 billion to N46.60 billion; and NASENI, by N9.54 billion from N56.14 billion to N46.60 billion.
“Total budget deficit is projected to increase by N1.01 trillion to N7.40 trillion, representing 4.01% of GDP. The incremental deficit will be financed by new borrowings from the domestic market.
“Equally, it is imperative that Clause 10 of the 2022 Appropriation Act which stipulates that the Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU) are authorized to charge and defray from all money standing in credit to the units as revenues, penalties or sanctions at 10% for technical setup and operational cost at the units in this financial year be repealed.
“This clause is in conflict with the Act establishing these Agencies, as well as some other laws and financial regulations of the government. These are neither Revenue Generating Agencies nor Regulatory Bodies that generate revenue or charge penalty fees. They are fully funded (Personnel, Overhead and Capital) by Government through Budgetary provisions.
“The Fiscal Responsibility Act 2007, as well as the Finance Act 2021, require these Agencies to remit fully any recovered funds to the Consolidated Revenue Fund (CRF). This clause may lay a dangerous precedence, and spark clamours for similar treatment by other anti-corruption agencies.
“Also, the Clause 11 which stipulates that “Notwithstanding the provisions of any other law in force, Nigerian Embassies and Missions are authorised to expend funds allocated to them under the Capital components without having to seek approval of the Ministry of Foreign Affairs” should likewise be repealed. It too is inconsistent with extant Financial Regulations and the Public Procurement Act, which set thresholds for approving officers and Parastatal / Ministerial Tenders Boards for awards of Contracts for the procurement of goods and Services. This also amounts to an intrusion of the Legislature into what is an executive function.
“Given the urgency of the request for amendments, I I seek the cooperation of the National Assembly for expeditious legislative action on the 2022 Appropriation Amendment Proposal in order to sustain the gains of an early passage of the budget.
“Please accept, Distinguished Senate President, the assurances of my highest consideration.”
Senate Gives Kyari, NUPRC Boss 24 Hours To Appear For Budget Defense
The Chairman of the Senate Appropriation Committee, Senator Adeola Olamilekan, on Wednesday, directed the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, to appear before the committee in 24 hours.
Olamilekan, who asked Kyari to appear in company of the Executive Secretary of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), warned that failure to appear undermines the legislature and sabotages the process.
They are required to present the list of all individual companies operating with OML licenses in Nigeria as well as total production output approved on a daily basis.
The lawmaker expressed concerns that some of the revenues required to drive the 2024 budget was attributed to the NNPCL, which according to him, was owned by the Federal Government and responsible to it, and by extension the three arms of government.
The NNPCL, had earlier shunned for a second time, summons by the Senate to appear before its committee probing over N11trn expenditure on turn around maintenance of refineries in the country between 2010 and 2023.
The absence of Kyari, whose entity is at the centre of the investigation, stalled efforts by the Senate panel to make progress on the matter.
Economic: IMF Wrong On Nigeria’s Projections – Budget Office
The Director-General of the Budget Office of the Federation, Ben Akabueze, says the International Monetary Fund (IMF) has been wrong in its projections of the Nigerian economy in the last four years.
“In the last four years, IMF has got it wrong about our projections,” Akabueze said on Channels Television’s Politics Today programme on Wednesday. “Our actual growth have always beat their projections.”
Akabueze spoke on the economic projections of the President Bola Tinubu government for 2024.
On November 29, 2023, the President presented his maiden budget estimates of N27.5trn for the year 2024 to the National Assembly (NASS).
According to the President, the economy is expected to grow by 3.76%, while “inflation is expected to moderate to 21.4 percent in 2024”.
“Budget deficit is projected at 18 trillion naira in 2024 or 3.88 percent of GDP (Gross Domestic Product (GDP),” the President had added.
The President’s projection was at variance and “ambitious” to the prediction of IMF earlier in October. The Washington-based lender had projected that the country’s economy would grow at 3.1% in 2024.
However, the Budget Office boss said IMF’s projections “do not represent the holy grail on economic growth”, adding that the organisation “can’t get it right better than the people who have direct responsibility for managing their individual economies”.
Akabueze said the growth rate projected by the Tinubu government in its maiden budget “doesn’t even yet reflect the ambition of the government”, adding that the incumbent administration “wants to double the GDP before the end of the first term”.
He said the 2024 budget estimates awaiting approval at the National Assembly was “way too small” to Nigeria’s need but the government had to cut its coat according to its cloth.
The Budget Office director general insisted that despite the criticisms against the 2024 budget estimates, the appropriation bill caters for the poor in terms of healthcare, security, education and the economy.
TINUBU: SECURITY, JOB CREATION, POVERTY REDUCTION TOP PRIORITIES OF 2024 BUDGET
President Bola Tinubu says Nigeria’s national defence and internal security, local job creation, macro-economic stability, investment environment optimization, human capital development, poverty reduction, and social security are some of the top priorities of the 2024 Budget of Renewed Hope.
Addressing a joint session of the National Assembly on the 2024 Federal budget proposal on Wednesday in Abuja, President Tinubu said the nation’s internal security architecture will be overhauled to enhance law enforcement capabilities with a view to safeguarding lives, property, and investments across the country.
He said the proposed budget prioritizes human capital development, with particular attention given to children, because human capital remains the most critical resource for national development.
“To improve the effectiveness of our budget performance, the government will focus on ensuring value for money, greater transparency, and accountability. In this regard, we will work more closely with development partners and the private sector.
“To address long-standing issues in the education sector, a more sustainable model of funding tertiary education will be implemented, including the Student Loan Scheme scheduled to become operational by January 2024,” the President affirmed.
Speaking on the economy, President Tinubu said a stable macro-economic environment is crucial in his administration’s bid to catalyze private investment and accelerate economic growth; hence, his government shall continue to implement business and investment friendly measures for sustainable growth.
“We expect the economy to grow by a minimum of 3.76 percent, above the forecasted world average. Inflation is expected to moderate to 21.4 percent in 2024. In preparing the 2024 Budget, our primary objective has been to sustain our robust foundation for sustainable economic development. A critical focus of this budget and the medium-term expenditure framework is Nigeria’s commitment to a greener future.
“Emphasizing public-private partnerships, we have strategically made provisions to leverage private capital for big-ticket infrastructure projects in energy, transportation, and other sectors. This marks a critical step towards diversifying our energy mix, enhancing efficiency, and fostering the development of renewable energy sources. By allocating resources to support innovative and environmentally conscious initiatives, we aim to position Nigeria as a regional leader in the global movement towards clean and sustainable energy.
“As we approach the COP28 climate summit, a pivotal moment for global climate action, I have directed relevant government agencies to diligently work towards securing substantial funding commitments that will bolster Nigeria’s energy transition. It is imperative that we seize this opportunity to attract international partnerships and investments that align with our national goals. I call upon our representatives to engage proactively to showcase the strides we have made in the quest to create an enabling environment for sustainable energy projects.
“Together, we will strive for Nigeria to emerge from COP28 with tangible commitments, reinforcing our dedication to a future where energy is not only a catalyst for development but also a driver of environmental stewardship,” he said.
The President said a conservative oil price benchmark of 77.96 U.S. Dollars per barrel and a daily oil production estimate of 1.78 million barrels per day were adopted after a careful review of global oil market trends, and that a Naira to U.S. Dollar exchange rate of 750 naira per U.S. Dollar was adopted for 2024 as well.
Giving a breakdown of the 2024 Appropriation Bill, the President said: “Accordingly, an aggregate expenditure of 27.5 trillion naira is proposed for the Federal Government in 2024, of which the non-debt recurrent expenditure is 9.92 trillion naira while debt service is projected to be 8.25 trillion naira and capital expenditure is 8.7 trillion naira. Nigeria remains committed to meeting its debt obligations. Projected debt service is 45% of the expected total revenue.
“The budget deficit is projected at 9.18 trillion naira in 2024 or 3.88 percent of GDP. This is lower than the 13.78 trillion naira deficit recorded in 2023, which represented 6.11 percent of GDP. The deficit will be financed by new borrowings totaling 7.83 trillion naira, 298.49 billion naira from Privatization Proceeds, and 1.05 trillion naira draw down on multilateral and bilateral loans secured for specific development projects.”
President Tinubu said his administration remains committed to broad-based and shared economic prosperity, adding: “We are reviewing social investment programmes to enhance their implementation and effectiveness. In particular, the National Social Safety Net project will be expanded to provide targeted cash transfers to poor and vulnerable households.”
He also said efforts will be made to further contain financial leakages through the effective implementation of key public financial management reforms.
The President commended the patriotic resolve of the 10th National Assembly to collaborate with the Executive on the mission to renew the hope of Nigerians and deliver on the promises made to Africa’s largest population.
“As you consider the 2024 Budget estimates, we trust that the legislative review process will be conducted with a view to sustaining our desired return to a predictable January-December fiscal year. I have no doubt that you will be guided by the interest of all Nigerians. We must ensure that only projects and programs with equitable benefits are allowed into the 2024 Budget. Additionally, only projects and programs that are in line with the sectoral mandates of MDAs and those which are capable of realizing the vision of our administration should be included in the budget,” the President declared.
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