*Pegs crude oil benchmark at $77.96 per barrel, 1.78m barrels daily output, exchange rate N800*Capital expenditure N9,995,143,298,028, recurrent expenditure N8,768,513,380, 852*Defence gets highest allocation of N1.308tn, police affairs N869.121bn, education N857.134bn, health N667.577bn
*NJC gets highest statutory transfer of N341.626bn, NDDC N338.925bn, UBEC N263.044bn, NEDC N131.836bn
*Senate okays Tinubu’s request to borrow $7.8bn, €100m*Lawmakers approve president’s proposal to securitise N7.3tn ways and means
The two chambers of the National Assembly yesterday passed the 2024 Appropriation Bill of N28.7 trillion, increasing it by approximately N1.2 trillion from the initial N27.5 trillion proposed by President Bola Tinubu.The passage of the budget is coming as the Senate also yesterday approved President Tinubu’s request to borrow $7.8 billion and €100 million as part of the 2022–2024 borrowing plan of the federal government, just as the lawmakers also approved the securitisation of the outstanding debit balance of N7.3 trillion of the Ways and Means Advance in the Consolidated Revenue Fund (CRF) of the federal government.The Senate passed the bill at a special plenary after the Chairman of the Senate Committee on Appropriation, Senator Solomon Adeola, presented his panel’s report, which was approved by the lawmakers.In presenting the report, Adeola said they adopted the Medium-Term Expenditure Framework and Fiscal Paper (MTEF/FSP) approved by the National Assembly in drafting the budget.
He stated that the committee adopted a $77.96 per barrel oil benchmark, 1.78 million barrels per day output, and an exchange rate of N800 to the dollar, deviating from the proposed N750 proposed by the executive.Major highlights of the bill include a total aggregate expenditure of N28.7 trillion, statutory transfers of N1.7 trillion, recurrent expenditure of N8.7 trillion, and a capital expenditure component of N9.9 trillion.The lawmaker explained that the N1.2 trillion increase in the appropriation was a result of a request for additional funding of items, which was not listed in the Appropriation Bill as submitted by President Tinubu.
He said the joint National Assembly Committee on Appropriation observed inadequate funding in the budgetary allocation of some Ministries, Departments, and Agencies (MDAs) of the federal government.Adeola, who noted the executive’s requests for additional funding for some previously unaddressed expenditures, pointed out that the 2024 Appropriation Bill was presented to the National Assembly late, in violation of the Fiscal Responsibility Act (FRA) that provides for its submission at least three months before the next financial year.
Adeola highlighted discrepancies in the revenues of certain Government-Owned Enterprises (GOEs) and the exclusion of some agencies’ personnel costs from the federal government payroll.To ensure a comprehensive review of the budget proposal, Adeola urged the executive to comply with the provisions of the FRA and relevant extant laws concerning government agencies.He urged the removed agencies to enhance revenue generation, fund themselves, and contribute more to the Consolidated Revenue Fund (CRF).The bill passed has aggregate expenditure pegged at N28,777,404,073,861; statutory transfers amounting to N1,742,786,788,150; recurrent expenditure of N8,768,513,380,852; capital expenditure of N9,995,143,298,028 and GDP at 3.88 per cent.After presenting the report, the Senate dissolved into the Committee of Supply, which considered and passed the budget.The Senate President, Senator Godswill Akpabio, announced the approval of the budget after the majority of the senators supported it through a voice vote at the special plenary.
Meanwhile, the House of Representatives also approved the sum of N28.777 trillion in expenditure for the 2024 fiscal year following the approval of the report by the Chairman of the House Committee on Appropriation, Hon. Abubakar Bichi.According to the breakdown of the report by the Speaker of the House of Representatives, Hon. Tajudeen Abbas, the N28.777 trillion approved was N1.2 trillion higher than the N27.504 trillion presented by President Tinubu during the joint session of the National Assembly on November 29, 2023.Bichi explained that the N1.2trillion increase was due to inflation and an exchange rate increase from N750 to N800, adding that Government-owned enterprises also agreed to increase their revenues.
He noted that the 2024 appropriation was the first time the capital expenditure was bigger than the recurrent expenditure.The breakdown of the N28.777 trillion approved budget showed that the sum of N1.743trillion is for statutory transfers; N8.271trillion is for debt service; N8.769trillion is for recurrent (non-debt) expenditure, while N9.995trillion is for capital expenditure for the year ending December 31, 2024.The N9.179 trillion fiscal deficit for the year under review is to be financed through asset sales/privatisation – N298,486,421,740; multilateral/bilateral project -tied loans – N1,051,914,486,314 and debt financing – N7,828,529,477,860.
For the total debt service of N8.271 trillion approved for the year 2024, the sum of N5.3 trillion is to be incurred through domestic debts – including Ways and Means; N2.748 trillion through foreign debts while the Sinking Fund for the retirement of maturing Promissory Notes stands at N223.662 billion.Under the Statutory Transfer, National Judicial Council (NJC) got the highest allocation of N341.626billion; followed by Niger Delta Development Commission (NDDC) with N338.925billion; Universal Basic Education Commission (UBEC) gets N263.044billion; North East Development Commission (NEDC) – N131.836billion; Basic Healthcare Provision Fund (BHPF) – N131.522billion; National Agency for Science and Engineering Infrastructure (NASENI) – N131.522billion; Public Complaint Commission (PPC) – N14.460billion; and N5billion for National Human Rights Commission (NHRC), respectively.
The breakdown of the National Assembly budget revealed that the sum of N78.624billion is for House of Representatives; N49.145 billion is for Senate; N36.727billion for National Assembly Office; N30.807 billion for General Services; N20.388billion for legislative aides; N15.189billion for Service Wide Vote; N15billion for National Assembly hospital project; N12.326 for National Assembly Service Commission (NASC); N12.123 billion for National Assembly Library Complex (Take-off Grant); N10billion for ongoing construction of NASC headquarters; N9.008 billion for National Institute for Legislative and Democratic Studies (NILDS); N4.5billion for completion of ongoing NILDS building; N4billion for National Assembly Recreation Centre; N4billion for design, construction, furnishing and equipping of NASS Budget & Research Office (NABRO); N3billion for procurement of books for NASS Library; N3billion for Senate Car Park; N3billion for House of Representatives’ Car Park; N3billion for upgrade of NASS key infrastructure; N3billion for design, construction, furnishing and equipping of NASS ultramodern printing press.
The appropriation bill also shows that N2.7 billion was earmarked for the furnishing of committee meeting rooms and other offices within the Senate building; N3 billion for the furnishing of committee meeting rooms for House of Representatives Part I & II); N2.5billion for NASS Pension Board (Take-off Grant); N1.230billion for Office of Retired Clerks & Permanent Secretaries; N1billion for Constitution Review; N130million for Public Accounts Committee (Senate); N150million for Public Accounts Committee (House); N200million for Senate Appropriation Committee and N200million for House of Representatives Appropriation Committee, respectively.However, from the total sum of N50.451trillion approved for recurrent (non-debt) expenditure, Ministry of Defence got the highest allocation of N1.308trillion, followed by Ministry of Police Affairs – N869.121billion; Ministry of Education – N857.134 billion; Ministry of Health & Social Welfare – N667.577 billion; Ministry of Interior – N362.552 billion; Ministry of Youth – N201.467billion; National Security Adviser (NSA) – N199.763 billion; Ministry of Foreign Affairs – N140.456 billion; Ministry of Agriculture & Food Security – N110.248 billion; Secretary to the Government of the Federation (SGF) – N100.248 billion and Presidency – N97.913 billion.
According to the Appropriation Bill, FGN’s Share of Gross Federation Revenues amounted to N12,.739,069,984.307, deductions, N1.502,632.513,940, while FGN’s share of net federation revenues is N11,236.437,470,367.Independent revenues are estimated at N1,907,775,748,763, while other dividends amounted to N357,923,133.707.The bill also showed that aid and grants are pegged at N685.632.294.000; social Fund/Accounts-Receipts N300,000,000,000; Government-Owned Enterprises (Net of operating, Surplus), 3,645.080,469.662, and others- N1,465,624,571,448.President Tinubu had on November 29, presented a total of N27.5 trillion budget proposal to a joint session of the National Assembly.The president pegged the budget deficit for the 2024 fiscal year at N9.18 trillion.He said the deficit represents 3.88 per cent of Nigeria’s gross domestic product (GDP).Tinubu had said: “The N9.18 trillion deficit is lower than the N13.78 trillion deficit recorded in 2023, which represents 6.11 per cent of GDP.”
Senate Okays Tinubu’s Request to Borrow $7.8bn, €100m
Meanwhile, the Senate yesterday approved President Tinubu’s request to borrow $7.8billion and €100million as part of the 2022 – 2024 borrowing plan of the federal government.The request was approved after the Senate considered and adopted the report of its committee on Local and Foreign Debt during yesterday’s plenary.Tinubu had said that the Federal Executive Council (FEC) under former President Muhammadu Buhari approved the loan facility on May 15, 2023, to finance infrastructure, health, education, agriculture, insecurity, and other sectors.He further explained that the foreign loan has become necessary to bridge the financial gap and return the economic activities of the country to normalcy.The funds, he said, would be used to develop infrastructure, agriculture, health, education, water supply, security, and employment as well as financial management reforms.
Senate Approves President’s Proposal to Securitise N7.3tn Ways and Means
In another development, the Senate yesterday approved the securitisation of the outstanding debit balance of N7.3 trillion of the Ways and Means Advance in the Consolidated Revenue Fund (CRF) of the federal government.This followed the consideration of President Tinubu’s letter, addressed to the Senate President, Akpabio.Tinubu’s request was subsequently considered at the Committee of Supply and approved at plenary due to its urgency.Ways and Means is a loan facility through which the CBN finances the government’s budget shortfalls.The letter by the President is titled, “Securitisation of the debit balance of ways and Means in the consolidated revenue fund of the Federal Government of Nigeria.”
It read: “I would like to call the attention of the Senate to the provisions of section 38 of the subsisting CBN Act 2007.“It stipulates that the apex bank may grant temporary advances to the federal government in respect of temporary deficiency of budget revenue provided such overdraft do not surpass five per cent of the government revenue from the previous year.“The Senate is invited to note that from available information by the CBN the Consolidated Revenue Fund (CRF) account of the Federal Government of Nigeria (FGN) stood at N7.3trillion as of December 11, 2023, that is due to domestic debt servicing, Principal and interest.
“While the federal government is considering various measures to forestall the use of Ways and Means advances for domestic debt servicing, it has become highly imperative to securitirise the outstanding Ways and Means Advance of the Federal Government of Nigeria before the end of the year 2023.“The securitisation of the Ways and Means will lead to the realisation of the following benefits amongst others:“Reduction of debt service costs as the interest rate for the securitise Ways and Means advanced is lowered at 9 per cent per annum compared to MBR which is 0.3 per cent“The savings arising from the much lower interest rate will have to reduce the deficit in the budget.“The improvement in debt transparency as securitised Ways and Means Advances are included in the public debts statistics.“In view of the foregoing, the senate is invited to kindly consider and approve the securitisation of the outstanding debit balance of N7.3 trillion in the same order as at December 2023.”
THISDAY
