Nigerian Government’s Steps To Finance Budgets

The Director General of the Budget Office, Ben Akabueze, yesterday, disclosed in Abuja at a public hearing that the Federal Government has concluded plans to sell key national assets in a bid to generate sufficient revenue to finance Nigeria’s annual budgets between 2018 and 2020.

The public hearing was organised by the House of Representatives joint committees on finance, appropriation, loans, debts and aids and legislative budget and research on the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

He explained that proceeds from sales of the key government assets, which include National Integrated Power Plant (NIPP) plants, National Parks, as well as the National Arts Theatre and Tafawa Balewa Square in Lagos are to be deployed as financing items for the 2018 budget.

Akabueze also told the Committee that the power generation plants constructed by the Niger Delta Power Holding Company (NDPHC) under the NIPP on behalf of the government would be sold.

Some of the NIPP expected to be sold include Alaoji Power Station in Abia State, a 1074 Mega Watts (MW) capacity plant; the 561MW capacity Calabar Power Station; the Egbema Power Station, a 338MW simple cycle gas turbine plant and Geregu II Power Station in Kogi State with 434 MW capacity.

Others include: the 450MW Ihovbor Power Station in Benin City; Olorunsogo Power Station, a 336MW plant located at Olorunsogo; Olorunsogo II Power Station with combined cycle gas turbine of 675 MW capacity; the Omoku II Power Station in Omoku with 225 MW capacity. Also to be sold are Omotosho II Power Station with 450 MW capacity and Sapele Power Station with 450 MW capacity.

Other items to be sold are non-core assets from the mines and steel sector, houses, and estates.

He said proceeds from privatisation of key government assets were factored in the 2018 budget, to finance especially the budget deficit of N2.005 trillion, much of which will be financed through domestic and foreign.

According to the Director General, the country was generating too little revenue; hence it was expedient to borrow.

He added that the reverse would be the case if actually there were more revenue collectibles.

“We are generating too little revenue, hence we are borrowing. If we generate enough, borrowing ratio will drop,” he said.

 

Buhari Presents 2018 Budget Today

President Muhammadu Buhari will today, Tuesday present the 2018 budget proposals to a joint session of the National Assembly.

The president had in a letter on November 2 formally informed the Senate and the House of Representatives of the presentation of the appropriation bill.

The president is billed to address the members of the National Assembly at 2 p.m. to present the N8.6 trillion Appropriation Bill for 2018.

“In pursuant to Section 81 of the 1999 Constitution, may I crave the kind indulgence of the National Assembly to grant me the slot of 1400 hours on Tuesday, November 7, 2017, to formally address a joint session and lay before the NASS the 2018 budget proposal,” the president said..

Mr. Buhari had earlier sent the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper to the National Assembly.

The submission of the documents usually precedes the presentation of the budget estimates to the National Assembly in pursuant to provisions of the Fiscal Responsibility Act, 2007.

Osinbajo Signs Executive Order To Aid Budget Submission By Agencies

In a swift response to the ultimatum given by the Senate asking the presidency to submit the budgets of revenue generating agencies within the next two weeks, acting President Yemi Osinbajo Thursday signed three executive orders aimed at revolutionising government operations.

The three orders, according to a statement by his spokesman, Laolu Akande, were intended to guarantee the timely submission of budgets by the respective federal government agencies, promote transparency and ease of doing business, and boost local content in public procurement.

The statement added that the acting president signed the orders after an interactive session with ministers, permanent secretaries and heads of government agencies in the Banquet Hall of the Presidential Villa, Abuja.
The executive orders also stipulated the sanctions and punitive measures meant to address violations, where necessary, Akande said in the statement.
“Ahead of the signing, the acting president held an interactive session at the old Banquet Hall of the Presidential Villa with all the relevant government officials, including ministers, permanent secretaries and heads of departments and agencies, among others.

“The session was meant to directly engage government officials who would be implementing the orders and the new instructions,” he added.
He said that Osinbajo signed three executive orders giving specific instructions on a number of policy issues affecting:

• The promotion of transparency and efficiency in the business environment designed to facilitate the ease of doing business in the country;
• Timely submission of annual budgetary estimates by all statutory and non-statutory agencies, including companies owned by the federal government; and
• Support for local content in public procurement by the federal government.
Akande noted that the executive orders will significantly change some of the ways government business and operations are conducted in the country forthwith.

The Senate on Wednesday had given the executive a two-week ultimatum to submit the 2017 budget proposals of at least 36 agencies of the federal government for consideration and passage by the National Assembly, in line with the Fiscal Responsibility Act (FRA).

It also barred the agencies, which are revenue generating, from further capital and non-essential expenditure, pending the submission and approval of their budgets.

Some of the affected agencies include the Nigerian National Petroleum Corporation (NNPC), Central Bank of Nigeria (CBN), Bureau of Public Enterprises (BPE), Federal Inland Revenue Service (FIRS), Nigerian Immigration Service (NIS), Nigerian Electricity Regulatory Commission (NERC) and Nigerian Customs Service (NCS).

The ultimatum was issued to the presidency because the heads of several of the agencies are autonomous and do not report to any ministers.

Why Budgets Fail in Nigeria By Luke Onyekakeyah

The 2017 budget passed by the National Assembly has dwarfed the 2016 budget that was thought to be a super budget. That budget of N6.08 trillion has been outstripped by the 2017 appropriation of N7.441 trillion, which again is another super budget. The idea is to infuse enough money to leverage an economy in recession.

The Buhari administration has turned out to be trading on high stakes that require huge financial outlay. Actually, the huge budgets are not unconnected with the precarious economic situation that has manifested in recession. The most effective way to tackle recession, according to experts, is to plough huge money into the economy for productive ventures.

Ordinarily, some may think that the budget ought to have towed a low profile in view of the prevailing economic downturn. The optimism in the budget is expected if the country must come out of the biting recession. It underscores a move towards building a new Nigeria, borne out of ingenuity and creative thinking hitherto lacking in this sphere.

Having said that, I would like to state that our problem is not in proposing budgets; our problem is in their implementation. It is one thing to roll out a budget, yet it is another thing to implement it and achieve positive results. National development is predicated on effective implementation of national budgets.
It might be necessary, at this juncture, to ask how far did the 2016 budget go to alleviate some of the endemic problems in Nigeria. When I say the 2016 budget, I don’t just mean the federal budget but all the state budgets put together. As a matter of fact, every year, 38 budgets are rolled out including the Federal Government, 36 states and the Federal Capital Territory (FCT), Abuja.

To what extent did the budgets alleviate the problem of poor electricity, water supply, healthcare, education, dilapidated roads, unemployment, insecurity, etc? Are Nigerians faring better now compared with last year when the 2016 budget was passed? What systematic changes have occurred? What systematic solutions have been provided or on-going? What difference has occurred in the life of an average Nigerian?

That brings me to the issue of budget failure, which is the subject of this discourse. The failure of budgets across the country is heart-breaking. That is why pessimists call budgeting in the country annual ritual. That has been the case since 1999, when the present democratic dispensation began and it was thought that the era of military impunity was over. Indeed, our rogue budgets are merely rituals; they seem not to be made to change anything.

And really, how can there by change when on average, every year, 70 per cent of our budgets go for recurrent expenditure while only 30 per cent is for capital expenditure. How can an underdeveloped country like Nigeria develop when only a fraction of the annual budgets is put for capital projects? Faced with corruption, neither the recurrent budget nor the capital spending achieves its target. The inability of many state governments to pay salaries, pension benefits and other entitlements to workers underscores the failure of recurrent expenditure. Sadly enough, the Federal Government is gradually contracting the disease and is no longer able to pay workers’ salaries as at when due.

The issue of national development, which budgets are meant to address is out of the question. Looking at the embarrassing underdevelopment quagmire of the country, one can safely say that all the budgets made in the country since independence in 1960 put together, may not have recorded 40 per cent success. That is why the country stinks with pangs of underdevelopment. Quadrillions of naira has been appropriated since independence but there is little to show for it.

Every year, budgets are rolled out at the federal and 36 states and Abuja FCT. Each level prepares budget based on what suites its purpose. There is no common ground for integrated national development. Nigerians hear about the trillions of naira earmarked for expenditure but hear nothing again about how the money was spent. The same governments that announced the budgets with fanfare at the beginning won’t utter a word at the end about what happened to the money.

Rather than hear anything on accountability, what is heard is another round of budget preparation, announcement and passage in the various houses of assembly. The whole thing is a vicious cycle of deceit and corruption. Nobody talks about this huge fraud that has been going on for decades, the impact of which is the woeful state of affairs in the country.

There seems to be no law that compels governments to account for the previous budget before announcing a new one. As a way out, there is need for a law that would compel leaders, at all levels, to make public, at the end of each financial year, how the previous year’s budget was spent, what was achieved and what is left, which would form the basis for making a new budget.

The main causes of budget failure in Nigeria include:
Budgets are made with no clear objectives. Since the demise of national development planning in the early 70s, Nigerian budgets are prepared with bogus, high-sounding epithets, such as budget of consolidation; budget of transformation; budget of change. There is no clear-cut objective in these kinds of budgets.

No plan or strategy. Again with the demise of national development planning, budgets are prepared without plan or strategic framework. It is like building a huge edifice without architectural drawing.

No transformational ideology. There is no national ideological focus. Countries may make budgets to ensure mass education; infrastructural development; agricultural cum industrial development, etc. There is no ideological underpinning in our budgets; no thinking for the future.
Mono-cultural economy. The Nigerian economy is about 98 per cent dependent on oil revenue. Consequently, the budgets are dependent on the fluctuations of oil prices in the international market. The economy should be diversified to create more sources of revenue and less dependent on oil.

Discord, rancor and acrimony. Budget preparation, presentation, passage and implementation are associated with disagreements and display of selfish interests by politicians. Releasing approved budget funds is a battle in which selfish interest and nepotism override.

There are several other factors but we are constrained by space to discuss. It is baffling that at the end, funds which should have been utilised may be returned as unspent budget, while the country is in ironic embarrassment.

#OpenNASS: National Assembly Opens Its Budget For The First Time In History

Nigeria’s National Assembly for the first time in recent history has made public, its yearly budget.

This was revealed during the passing of the 2017 appropriation bill by the Nigerian Senate.

Recall a special assistant on New Media to the Senate President, Bankole Omisore has stated penultimate last week that he would resign his job if the national assembly fails to open its budget in 2017.

Recall the National Assembly had budgeted N125,000,000,000 for 2017, but failed to reveal details of its spending to the public.

See a copy of the line by line distribution of the 2017 national assembly budget below:

 

National Assembly 2017 budget
2017 National Assembly budget

In a copy of the proposed budget seen by this paper, the House of Representatives got the largest chunk with a personnel cost of 4,923,743,127, an overhead cost of 39,635,756,179 and capital budget of 4,493,244,677.

The total budget of the House of Representative led by Rt. Hon. Yakubu Dogara equals 49billion naira.

In a similar vein, the Nigerian Senate which got the second largest vote, had a personnel cost of 1,856,510,517, an overhead cost of 25,111,332,147 and capital budget of 4,430,923,222 making a total of 31,398,765,886 budget for 2017.

Credit: The Paradigm

2017 Budget Is Ready But We Are Delaying To Avoid Padding – Faleke

A member of the House of Representatives, James Faleke while speaking with journalists at the All Progressives Congress (APC), national secretariat in Abuja said all committees had finished working on the budget. He also said the delay in the passage of the 2017 budget was to avoid padding.

He also revealed that the meeting was held to discuss the issues affecting the state chapter of the party.

“Budget process takes some time, unlike what we had before where you talk about budget padding or no padding.
What the national assembly tried to do this time is to do the needful once and for all with the budget details being submitted,” Faleke said.

“The budget is ready, only to be considered on the floor as all committees have finished their work, probably this week.

“It is not about delay but doing the right things; if we hurriedly do it and get things wrong, Nigerians will condemn us.”

Faleke confirmed that there was crisis in the Kogi chapter of the party, but declined further comment on the issue.

He commended the Buhari-led administration for its effort in combating corruption and insecurity.

Faleke said Nigeria would have collapsed if President Muhammadu Buhari did not win the 2015 presidential election.

“It is true that this government will be two years by May 29. I can tell you sincerely that the country has moved forward from what we used to have,” Faleke said.

“We have done a lot in terms of re-organising our income, especially with regards to what the federal government gets as revenue.

“You cannot imagine how much has been recovered from individuals. If the looting had continued, this country would have collapsed and I want to give kudos to the president for having done that.

Poor Budgeting, Implementation, Identified as Bane of Development

By

Sola Jacobs

Poor budgeting culture and absence of the best practices in budget preparation, as well as implementation have been identified as the bane of development in Nigeria.

This was the conclusion at the two-day Training and Capacity Building for Local Government officials on Participatory Governance and Citizen engagement, organized by a non-governmental organization, Community Life Project (CLP) also known as Reclaim Naija at Ijebu-Ijesa on Monday.

The leading resource person, Mrs Ngozi Iwere said, poor oversight of the legislature to fulfill its constitutional obligation on the budget and non-inclusion of citizens in budget preparation were some of the indices of poor budgeting and non-implementation in Nigeria.

Delving on the topic, “International Principles in Budgetary Governance, she stated that lack of synergy in budget formulation between governments and their departments, as well as gross imbalance between capital and recurrent expenditure, in favour of recurrent expenditure was a major problem.

Iwere then recommended that budget should be managed within clear, credible and predictable limits for fiscal policy.

She also stated that budget should closely aligned with the medium term strategic priorities of the government, and must promote alignment with multi-year planning and goal setting function of the government.

On accessibility and transparency, the Civil Liberty Organization executive said, the budget documents and data should not only be made available, but it must be clear and factual to state key stages of policy formulation, consideration as well as its debate on implementation and review.

Some of the participants at the workshop agreed that the Nigeria budgetary culture was poor and appropriate mechanism must be adopted to change the trend.

One of the participants, Mr Ojetayo Benson from Ifedayo Local Government commended the effort of Osun State government for engaging  the citizen in participatory government by involving civil servants at  the newly-created Local Council Development Area and Local governments to formulate policies for incoming local government executives.

 

Also Mrs Akinade Motuntayo from Ede North Local Government said, the workshop has sensitized the Community Development officials in the local government in both budget matters and participatory governance.

She added that the workshop had impacted the government officials to put the citizens first in their dealings and considerations.
Another participant, Mr Gideon Odesanmi said, there is need for a change of mindset in the entire polity, for the people to participate in governance, by asking questions from their leaders on how their resource is utilized.

February Allocation Rises To N456.149bn – FAAC

The Federation Account Allocation Committee( FAAC) yesterday said that the sum of N456.149 billion was available for sharing as February allocation.

That was against last month’s figure of N400 billion . The total amount approved for sharing to three tiers of government indicated an increase of N65.149 billion above January allocation.

Addressing the media yesterday after closed door session by FAAC, Permanent Secretary in Ministry of Finance, Dr. Mahmoud Isa- Dutse, put the gross statutory revenue of the month under review at N324.990 billion, a figure he said was also higher than N248.635 billion of the previous month by N76.275 billion.

“There was revenue increase of $ 74.91 million in federation export sales due to a rise in crude oil export volume by 1.490 million barrels and an increase in the average price of crude oil from $47.30 to $49.57 per barrel during the period under review”.

However, the permanent secretary noted the federation account recorded increase in funds flow despite declaration of force majeure declared at Forcados, Qua Iboe and Brass terminal for repairs and maintenance due to leakages and sabotage.

Tax collection increased significantly while revenues from Companies Income Tax, Value Added Tax, import duty and royalty decreased slightly. For February, the distributable statutory revenue is N282.406 billion, the sum of N6.330bn refunded by NNPC to the Federal Government while the balance in Excess Crude Account ( ECA) stood at $2.458 billion.

Of the statutory revenue, Federal Government got the highest allocation in the sum of N133.192billion, states got N67.557billion while local government councils are to share N 52. 083billion . Oil producing states have sum of N20.620 billion as their 13 per cent derivation.

 

Source:New Telegraphy

Government withholds Ekiti’s January Allocation- Fayose

Governor of Ekiti State, Ayo Fayose, has cried out against what he termed an attempt by the Federal Government by victimize the people of the state by withholding the January allocation to the state.

He said the action of the Federal Government was to get back at him over his consistent criticism of the President Muhammadu Buhari’s government.

Mr. Fayose also alleged that the Federal Government was using the Economic and Financial Crimes commission, EFFC, to frustrate ongoing projects in the state through “frivolous” investigations.

“In the last three, four weeks, after the Federal Allocation Committee meeting, it is sad that Ekiti Federal Allocation for January has not been released,” Mr. Fayose said, while briefing journalists in Ado-Ekiti on Tuesday.

“Secondly, the budget support, for which we signed an ISPO for all states in Nigeria, Ekiti remains the only state not paid for the month of January. And it seems this is deliberate because up till now, no excuse or explanation has been given.

“I have written to the Federal Ministry of Finance, my Commissioner has been there, as well as the Central Bank of Nigeria, nobody is ready to talk to us.”

Mr. Fayose said he had to bring to the notice of the people alleged efforts by the Federal Government to harass and intimidate the people and government of Ekiti.

“We contacted the Honourable minister, all the directors at the Ministry of Finance, everybody is shying away from talking to us for the last 10 days now,” Mr. Fayose said.“It is important to note that the allocation and budget support from Abuja is our legitimate right. We have done the needful on our part and nobody from their end has queried the process.

“I don’t know why the average civil servant in Ekiti State should be made to suffer because of politics, it is not my salary, it is the salary of the Ekiti civil servants.

“Doing this in the name of politics and to destabilize this state is not in line with the Constitution of the Federal Republic of Nigeria.”

He recalled that the statutory allocation for Local governments in Lagos State was stopped by the Federal Government under former President Olusegun Obasanjo and it was fought until the money was paid back.

“I want to appeal to the Federal Government, I want to appeal to the Ministry of Finance not to allow themselves to be used to oppress and suffer the civil servants in Ekiti,” he said.

“If this is a political attempt to cause chaos in the state, it will not stand. I will not
also be cowed from saying the truth.”

News reaching our desk says that the governor stormed the headquarters of the Finance Ministry on Wednesday to further press for the release of the funds or get explain actions while the allocation was not released.

It was also learnt that he was in Abuja for a banquet of governors at the presidential villa over the outgoing and incoming governors of Ondo State, Olusegun Mimiko and Rotimi Akeredolu, respectively, but used the occasion to pursue the release of the funds.

Festus Akanbi, media aide to the Minister of Finance, Kemi Adeosun, said on Wednesday that he was not aware of such action by the ministry.

He however confirmed that Governor Fayose visited the ministry earlier in the day, but did not meet the minister, Kemi Adeosun, who was attending the Federal Executive Council meeting.

“An official of the ministry attended to him when he came, but I am not aware that allocation to the state was withheld,” Mr. Akanbi said.

He however promised to get the full details of the matter on Thursday when the minister would be present in the office.

2017 Budget: Osun Assembly Holds Bilateral Talks

The Osun House of Assembly said on Wednesday that it would organize bilateral talks on the 2017 budget in order to ensure its full implementation.

Mr. Laide Lawal, the Head of Information in the assembly, said in a statement in Osogbo that the talks would hold between Feb. 20 and Feb. 24

He said the talks became imperative to enable stakeholders in the state to come together and brainstorm on how to get revenue to finance the budget.

Gov. Rauf Aregbesola had on Dec. 21, 2016, presented the 2017 budget estimate of N138.2 billion to the assembly.

The budget tagged, “Budget of Recovery,’’ was presented on behalf of the governor by Mr. Segun Olorunsogo, the Permanent Secretary in the Office of Budget and Economic Planning.

 

Again, Education Tops Sokoto’s Budget Allocation

For the second year running, education got the highest sectoral allocation after Governor Aminu Waziri Tambuwal presented Sokoto’s 2017 budget estimate to the state House of Assembly.

Laying the budget before lawmakers Thursday, Tambuwal said education will consume N38,426,266,193, representing 27.3% of the budget’s N204,288,364,741 total outlay.

Of the estimate, 69% was dedicated to capital projects, while 31% has been dedicated to recurrent expenditure.

According to Tambuwal, the policy thrust of the budget is to ensure sustainable economic development through substantial investment in critical sectors like education, agriculture, healthcare delivery, exploration of mineral resources, investment in renewable energy and infrastructure.

“We will prioritise effective resource management and seek intervention in areas with high potentials to create job opportunities, generate income and improve revenue generation,” the Governor said.

He added that though the financial state of affairs in the country is facing huge challenges, the state’s 2017 budget will address key policy issues which include promotion of peaceful coexistence and protection of lives and properties.

“We will work to strengthen capacity building of scheduled ministries to ensure they perform better in their tasks.

“Of great importance to us is the promotion of partnership with the private sector in areas of strategic importance to our development objective.

“We will promote value chain through agro-processing and diversification by way of incentivizing farmers and producers, and creating backward and forward linkages between and among institutions, partners and other stakeholders to accelerate economic growth,” he said.

Allocation to other sectors show that ministry of works and transport got N16.2 billion; ministries of water resources and environment got N10.7 billion, the health sector got N7.7 billion while ministry of housing, lands and survey got N8.2 billion.

Others include ministry rural and community development (N5.6 billion), ministry of solid minerals and natural resources development (N1.7 billion) while the sum of four billion Naira was set aside for ministry of commerce, industries and tourism.

While urging the lawmakers to do a diligent job in handling the budget document, Tambuwal said his administration, as shown since it came to power, will prioritise meeting the aspirations of the people of the state.

“I want to emphasise the need for us to work as a team so that together we can move our dear state forward,” he added.