Nigeria: Amid Rising Deficit, Debts – NASS Increases 2023 Budget By N1.3trn

Both chambers of the National Assembly yesterday increased the 2023 budget size from N20.51 trillion presented to them by President Muhammadu Buhari on October 7, 2022 to N21.82 trillion with a deficit of N10.782 trillion.

The N1.3 trillion increase in the budget size, as separately explained by chairmen of Appropriation Committees at both chambers, arose from additional funding earmarked for the National Population Commission (NPC) ahead of the planned 2023 Census, N173 billion for the Independent National Electoral Commission (INEC) ahead of the 2023 general elections, the Nigerian Army, Navy, Nigeria Police Force, ministries of Agriculture, Health, Aviation and Science and Technology.

The National Assembly also increased the oil price benchmark proposed for the budget from $70 to $75 per barrel.

They however retained other parameters as earlier proposed by the President, like 1.69-million-barrel oil production per day, N435.57 to the US dollar, 3.75 percent GDP growth rate and 17.16 percent inflation rate.

Presenting the report in the Senate, the chairman of the Appropriation Committee, Senator Barau Jibrin (APC, Kano North), said out of the N21.827 trillion, N967.486 billion is for statutory transfer , N8.329 trillion for Non-debt recurrent cost, N5.972 trillion for capital expenditure N6.557trillion for Debt servicing.

Under the N967.48 billion statutory transfers, the National Assembly Office has N30.492billion, Senate N33.267 billion, House of Representatives, N51.994billion, National Assembly Service Commission, N10.555 billion; Legislative aides, N16.520 billion; General Services N11.307 billion and National Institute for Legislative and Democratic Studies (NILDS), N7.411 billion.

Others are N30.173 billion for Severance/Inauguration of outgoing and incoming 9th and 10th Assembly Legislators, N10 billion for construction of NASC building, N2.5 billion for completion of NILDS Headquarters, etc.

Outside the National Assembly, N165 billion is earmarked for the National Judicial Council, N119.9bn for Niger Delta Development Commission (NDDC) and N103 billion for Universal Basic Education.

Of the N5.972 trillion proposed capital expenditure, the Ministry of Works and Housing has the lion share of N398.275 billion, followed by Ministry of Defence with N285.045 billion, Ministry of Agriculture and Rural Development, N248.358 billion, and Ministry of Education, N153.735 billion

Others are Ministry of Health, N134.909 billion, Federal Ministry of Science and Technology, N132.572 billion, Ministry of Finance, Budget and National Planning, N166 747billion, Office of the National Security Adviser (NSA), N70.331 billion, Presidency, N20.115 billion, Ministry of Interior N45.622billion, Federal Ministry of Water Resources N83.256billion, etc.

After the passage of the budget the President of the Senate,Ahmad Lawan urged Buhari to assent to it before the year runs out in sustaining the January to December budget cycle implementation.

Senate In Rowdy Session Over PMB’s N22.7trn Request

There was, however, an uproar in the Senate over a request from President Muhammadu Buhari for restructuring of N22.7 trillion Ways and Means advances collected by the federal government from the Central Bank of Nigeria (CBN) within the last ten years.

President Buhari had, in a letter read on the floor of the Senate on Wednesday last week, sought the restructuring of the N22.7 trillion Ways and Means advances collected from CBN within the last ten years in addition to N1 trillion to be collected as fresh domestic loans.

Buhari in the letter said Ways and Means are advances from the CBN to the federal government for emergency funding of delayed receipt of fiscal deficits.

The president in the request said: “The ways and means advances by the Central Bank of Nigeria to the federal government has been a funding option to the federal government to cater for short term or emergency finance to fund delayed government expected cash receipt of physical deficit.

“The ways and means, balances as at 19th December 2022 is N22.7 trillion. I have approved the securitisation of the ways and means balances along the following terms: amount, N23.7 trillion; tenure, 40 years, moratorium on principal repayment, three years, pricing interest rate, nine percent.”

He, therefore, the senators Your concurrence and approval is sought to allow for the implementation of the same.”

The Senate had, in line with parliamentary procedure, given the request expeditious consideration by passing it for second reading and mandating its committee on finance to work on it.

However, trouble started when the chairman of the committee, Solomon Olamilekan (APC, Lagos West), was called upon to present the report .

Senator Betty Apiafi (PDP Rivers) rose against it through constitutional point of order, by saying Ways and Means expenditure was not known to the Nigeria Constitution.

She was, however, ruled out of order by the president of the Senate, Ahmad Lawan, for allowing the report to be presented before kicking against it.

The anger of the senators, mainly from the opposition, against the report was expressed when it was being presented with a background noise against its presentation by Senator Olamilekan.

In a move to kill the report, Senator Thompson Sekibo rose through constitutional orders by citing sections 80, 83, Section1,13(1) of the 1999 Constitution and section 38 of the CBN Act to kick against the request.

He said: “Section 80 of the 1999 constitution, as amended, states that all revenues or other monies raised or received by the Federation, not being revenue and other monies payable under this constitution or any act of the National Assembly into any other public fund of the federation established for a particular purpose shall be paid into and for and form one consolidated revenue fund of the Federation

“No money shall be withdrawn from the consolidated revenue fund of the Federation except to meet expenditure that is charged upon the fund or where the issue of those monies have been authorised by an appropriation act, supplementary act or an act passed in pursuance of section 81 of the constitution

“No money shall be withdrawn from any account other than the consolidated revenue fund of the Federation unless the issue of those monies have been authorized by the Act of the National Assembly.

“Section 80 (4) states that no money shall be withdrawn from the consolidated revenue fund or any other fund of the Federation except by the approval of the National Assembly, except in the manner prescribed by the National Assembly.

“Section 38 of the CBN Act states that any money collected by the federal government as loan or emergency fund in the form of Ways and Means Advances must be refunded before collection of another one.

“Mr President, the relevant laws quoted clearly show that the N22.7 trillion Ways and Means Advances already spent by the federal government without informing the National Assembly was wrong and it will be unfair as representatives of Nigerians to approve this request,” he said.

Spirited attempt made by the Senate president to make Senators back down were futile as many of them left their seats and shouted No! No! which hurriedly made them go into a closed session for about one and half hours.

After the closed-door session, Lawan announced that the Senate had resolved to step down restructuring of N22.7 trillion Ways and Means but approved N819.5 billion from the fresh N1 trillion being requested for .

The approved N819.5 billion is for funding of the 2022 supplementary budget.

Meanwhile, the chief executive officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, yesterday said he expects Nigeria’s debt profile to hit N70trillion next year, following the N1.3 trillion increase by the Senate.

Dr Yusuf, a former director general of Lagos Chamber of Commerce and Industry(LCCI), explained that, “in all probability, the deficit will be much bigger by year end because of the track record of revenue under performance over the last couple of years.

“We are also likely to see an acceleration of Central Bank of Nigeria (CBN) financing of fiscal deficit given the revenue performance trajectory. The public debt stock is growing and currently at N42 trillion.

He noted that a number of issues need to be addressed to achieve the nation’s fiscal sustainability aspiration, saying, government owned enterprises managing huge economic assets need to justify the value of assets at their disposal; and oil revenue performance should be much better given the prevailing global oil price.

He pointed out that the foreign exchange policy regime is adversely impacting on business environment and needs to be urgently addressed, saying, weak private sector performance would naturally affect non-oil tax revenues.

He also said there is a need for budget reforms, adding that, the budgetary appropriations must reflect urgent national economic priorities.

Budgetary Allocations Cannot Sustain Public Varsities – Osinbajo

On her part, the director-general of LCCI, Dr. Chinyere Almona, stated that, “the unprecedented damage inflicted on some of our infrastructures due to flooding in most parts of the country requires urgent financing action by the government.

“We expect the supplementary budget to be used totally on repairing damaged infrastructure, but also very important is that we expect the government to invest more in building infrastructure to prevent future disasters.”

According to her, a deeper look at the figures showed that the supplementary budget will raise the budget deficit for 2022 from N10.78 trillion to N11.6 trillion and about 4.43 per cent deficit to GDP ratio.

Senate Asks CBN To Extend Deadline For Old Naira Notes To June

Meanwhile, the Senate yesterday urged the Central Bank of Nigeria (CBN) to extend the cash withdrawal limit policy to June 30, 2023.

The Senate’s appeal followed the adoption of a motion sponsored by Senator Ali Ndume from Borno South.

Leading the debate on the motion, Senator Ndume said that ending circulation of old Naira in January will impose serious hardship on Nigerians.

Ndume went on: “For example, in Borno and Yobe states, we don’t have many banks for effective implementation of the new policy. We have 27 local government areas and only five banks in those LGAs and we are known for trading and going from market to market to buy cash crops and other things. There are no banks, nor POS outlets in those areas and the operational ones don’t even have network.

“The new currency in circulation is not seen anywhere and I only saw the new note today in the chamber, And so, I am calling for an extension of the exercise to 30 of June 2023.”

NASS Extends 2022 Budget To March 2023

Following a request by President Muhammadu Buhari, the National Assembly yesterday extended the implementation period for the N18.12 trillion 2022 budget to March 31, 2023.

The budget is in line with provisions of clause 12 of the Appropriation Act and section 318 of the 1999 constitution which stipulate 12 calendar months for implementation of budget in any fiscal year, and is supposed to have ended on December 31, 2022 , having started on January 1, 2022.

But President Muhammadu Buhari, in a letter read in plenary yesterday, sought amendment on the Act for extension of the implementation period .

President Buhari in the letter read by president of the Senate, Ahmad Lawan , said: ” I write to request your consideration for an amendment into the 2022 Acts expression clause 12,as passed and assented to.

“The 2022 Appropriation Acts states, in line with the provisions of section 318 of the constitution of the Federal Republic of Nigeria, this Bill expires after 12 months starting from January, 1 to the December, 31, 2022, one assented to.

“The proposed 2022 appropriation supplementary budget submitted to the National Assembly for consideration as well as recent 2022 capital releases to MDAs are likely to be utiliszed before December, 31, 2022 due to the late release of the funds which will lapse if the capital implementation is not extended beyond December, 2022.

“In the light of the above, the National Assembly is requested to amend the 2022 Acts expression clause to reflect March 31, 2023 for the capital components only”.

The Senate accordingly gave the request expeditious consideration and passage by making it pass the required legislative processes within 30 mins .

President of the Senate in his remarks , said extension given implementation period of the 2022 budget to March 31, 2023 , will provide the required time for implementation of the N819.5billion 2022 supplementary budget raised by the President .

But Senator Muhammad Ali Ndume ( APC Borno South) , during a brief debate on the request , called for caution in view of the shortness of available time .

“Mr President, my worry about this extension and supplementary budget is the reality of what we are doing .

“N819.5billion 2022 supplementary budget targeted for implementation during the extended period, should have been merged with the 2023 budget which will also be passed today.

“Is not possible for the N819.5billion supplementary budget to be implemented within 90 days from now .Let no deceive ourselves but if the Senate wants to go ahead, so be it “, he said .

The Senate however went ahead with passage of extension of implementation period for 2022 budget .

Meanwhile, the Senate yesterday passed the 2022 Supplementary Budget of N819.536 billion earlier forwarded to it by President Muhammadu Buhari.

The supplementary budget according to the President is for the 2022 fiscal year to fix critical infrastructure destroyed by floods across the various states in the country .

The supplementary budget is meant for the capital expenditure component of the 2022 budget with attendant increase of deficit to N8.17 trillion.

President Buhari added that the N819.5billion supplementary budget will be financed by additional domestic borrowings.

The breakdown of the supplementary budget as passed by the Senate shows that a sum of N69 billion is earmarked for Agriculture and Rural Works and Housing; N15.5 billion for Water Resources while N30 billion is earmarked for FCT to address critical infrastructures destroyed by floods.

Meanwhile, a cross section of senators spoke their minds on the budget before passage with Senator Ali Ndume suggesting that the Supplementary budget should be incorporated into the 2023 budget to allow more room for implementation of identified projects.

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