Members of the House of Representatives, Wednesday, picked holes in N16.39 trillion 2022 budget, saying it is riddled with unrealistic projections that could further hurt Nigeria’s economy.
The lawmakers, who spoke on Wednesday during budget debate at the plenary, expressed deep worry over deficit and borrowings incurred by the Federal Government, saying N3.9 trillion for debt servicing was disturbing, adding that by 2022, the total debt could hit N5 trillion.
While however asking for increase in the hazard allowance of doctors, the parliamentarians also sought upward review of crude oil benchmark per barrel.
This was as the members also noted that the allocation to Works Ministry should be increased by additional N500 billion.
Those who expressed this opinion included Hon. Onofiok Luke, Hon. Kabir Abubarkar, Hon. Leke Abejide, Hon. Mohammed Jega, Toby Okechukwu, Hon. Serguis Ogun amongst others.
In his contribution to the debate, Like said “Following from the above, there are plausible recommendations by the FG in the 2022 proposals which my constituents have asked me to share and then appreciate and look at it and commend it. One of them is the provision of about N50 billion for hazard allowance for medical personnel. We would recall that as part of the issues that led the medical personnel to go on strike is the hazard allowances which were not paid and even as of now those hazard allowances are quite very minimal.
“We commend this effort of the Federal Government to capture this. I believe that this would stem the tide of industrial action in the health sector in 2022.
“It is also commendable in the sense that we are still fighting COVID 19, we know that the Federal Government had paid for about three months Covid-19 allowance, and after that those allowances have not been paid. We know what medical personnel are exposed to daily, so there is need for them for to be paid these allowance so it can be a morale booster.
“We have had a lot of brain drain in the last few years, because our eggheads have been pushed to go into other climes because of the challenges we have here. So while we are commending Mr. President for this, there is need for us to up that hazard allowance from N5,000 which has been for over 20 years to something that will boost the morale of those medical personnel. So this is commendable but we can equally look at how we can increase the hazard allowance for medical personnel.
“We also commended Mr. President for approving First Line Charge for National Agency for Science and Engineering Infrastructure. The world is going technology and we need to be in pace with how the world is moving and I want to commend Mr. President and commend the FEC for looking at this perspective to try to have a statutory transfer for the agency.
“The investment in Defence against the backdrop of the insecurity we are facing today is quite commendable, but what we would urge is that let there be a judicial use of these finances. We see in reportage every of our security personnel being hacked down by bandits in numbers. The question is what have we done to take care of their families and boost their morale. I believe the much funding in the 2022 proposed budget would take care of these issues.
“Before now, we have been crying for increased and improved welfare for Judicial officer and we have asked the Federal Government to try to increase the Statutory Transfer to the National Judicial Council so our Judges and Judicial Officers can be taken care of, our Courts can be equipped and then we can make provision for technology in our courts so that we can be at par with others and adopt best practices and be at par with advanced democracies that we see. The increase of statutory transfer by 10 billion to the National Judicial Council to take up the judiciary is quite commendable.
On Debt Service
“Another source of concern is that the proposal before us has a deficit of N6.2 trillion and government is proposing new borrowings to finance this deficit. What this implies is that then total public debt of Nigeria is expected to rise to N5 trillion in 2022 fiscal year. This is worrisome not only for today but generations unborn and the future of Nigeria.
“Let us do what we can to try to reduce the deficit and how we can reduce borrowing. Now to the next point on the issue so borrowing. There is nothing wrong with borrowing provided we borrow and put it for production not for consumption. So as we begin to look at it let us take the future generations of Nigeria into consideration while we get to borrow and make sure the borrowing are being put into productive ventures.
“While we put the money borrowed to infrastructure, three clear things come to mind. We have looked at security. We need to invest in power. Let us borrow to invest in power and roads. We have road challenges across the country. Let me use for instance Mr. Speaker, the Calabar-Itu road that area is being cut-off. People spend 8 hours on the road. And we have seen something less than a billion naira allotted to that road in the different lots that have been given. That is quite inadequate. We have to invest in our road and in our public transportation.
“We are talking about recoveries of loot and misappropriated funds, if we apply these it can help in reducing our deficits and borrowings. I don’t know whether these loots are still in the stomach of snakes or rats or animals. But if we apply these loots it would be to the better of the country.
“The pegging of oil price at $57 per barrel is totally quite very low. It is not sustainable. Permit to add that in the last three years since 2018, we have had a year high at an average of about $60 per barrel. So we should be advocating that there should be the upping of the pegging of $57 per barrel to $60 per barrel.
“In 2018, the year high was $77.41 cents per barrel. 2019 it was $66.24 cents. In 2020 it was $63.23 cent. As of today, the Brent is $83.27 cents. Bonny bright is $82.30 cents. So we can have an average of 60 dollars per barrel and that would be sustainable for us.
“The target of 13 percent inflation is not feasible, but what is achievable is that we should try to have a mechanism that would address the cost of food, cooking gas, and electricity bill. In this case, there should be provision for meters and we should make sure we cater for Nigerians in this regard”.
Increase allocation to Works
The Chairman, House Committee on works on Kabir Abubakar urged for upward review of proposed fund for road projects.
“The Tax Credit Scheme, where companies are allowed to develop road infrastructure and they are giving tax holidays to the tune of the cost of the project. An example is the Apapa – Oworoshoki Expressway in Lagos and the Kabba – Obajana road in Kogi state by Dangote. Other companies like LNG, Flour Mills, MTN and recently NNPC have all indicated their interest to participate in the Tax Credit Scheme.
“And also, the HDMI, where major highways are given as a concession to Investors to maintain and rehabilitate the roads and also, invest in the assets along the roads.
“Mr Speaker, over 800 contracts for roads and bridges are currently being executed across the nation by this Government, covering over 13,000 Kilometres of the 35,000 plus Kilometres of Federal Highways and Bridges. Every state in the federation has either a road or bridge project going on. To complete these projects, the Federal Government will need over 7 trillion Naira.
“But the 2022 budget provision for the Works sector in the Federal Ministry of Works and Housing from my sources at the Ministry is less than N300 billion Naira for capital allocation. While the federal government is owing road contractors over N400 billion.
“Mr Speaker, this allocation is grossly inadequate and a child’s play. Critical road projects in the 2022 budgets, in some cases, are allocated less than N400 million while the contract sums are above N40 billion and the contractors are owed billions of Naira”, he said.
$57 oil benchmark per barrel very low – Abejide
In his contribution, Hon. Leke Abejide said that the oil price benchmark should be reviewed.
“I have a little concern about the issue of borrowing. Once the capital projects are executed which will lead to economic growth and subsequently economic development; once it is channelled through these capital projects, we are going to achieve results. Where I have little worry is about the key assumptions and parameters of the budget. Not all assumptions but majorly the figure of crude oil per day which is put at 1.8million. During our MTEF hearing, the GMD of NNPC appeared before us -House Committe on Finance-he said that average production ranged between 1.6 to 1.7 million barrels per day. In projection, it is always good to be realistic. If you take the average of 1.7.mbpd, I think it is more realistic than going higher, because once there is a shock, it will be difficult for us to remedy it. It is always good not to be too ambitious. And I am talking about the production per day. These are areas I think we should look at. I think it is over ambitious to put it at 1.8mbpd.
“Secondly, the benchmark of $57 per barrel, if you look at the world market today, it is above $80. So, I think this is a bit low. If you can look at it, not to be too over ambitious also, may be we should take it above $60 per barrel. I think th is a bit realistic. If you look at the trend in the last two years, it has never gone down below this price”, he said.
Budget deficit my concern- Jega
Also speaking, Hon. Mohammed Jega said that his concern was on the budget deficit.
“I am concerned most especially on how to reduce the deficit. We will advise our colleagues in the House Committee on Finance to engage the revenue generating agencies to be more effective and account for every revenue collected so that we will be able to reduce deficit”, he said.
We can’t overcome with N3trn debt servicing – Okechukwu
Similarly, the deputy minority leader of the House, Hon. Toby Okechukwu also decried over N3 trillion allocated to debt servicing.
“This budget of economic growth and sustainability as presented by Mr President, it will appropriate to say that in 2020 there was complete implementation of the budget. We in 2014 had a budget of about N4.8 trillion , in 2022 we have a proposed bill of N16.3 trillion. If we do the mathematics as per the exchange rates of the Naira, those same money in spite of the quantum of 16 trillion as against the 4 trillion all get down to 40 billion dollars. It’s all motion no movement. It’s very instructive that in subsidy regime which is being baptized as under recovery is hurting the economy big time. We need to deal with it. It’s a matter of living in denial to continue to subsidize petroleum.
“We have over 3 trillion for debt servicing and more than 6 trillion for recurrent expenditure, this means that whatever that is going to capital expenditure if you take TETFUND and these agencies away, it’s about 2.8 trillion. There’s no way we can continue to commit that level of fund to recurrent expenditure and to debt servicing and we shall overcome”, he said.
On his part, Hon. Serguis Ogun said that budget implementation in Nigeria has never been satisfactory.
He said “Mr speaker, nobody is satisfied with budget implementation in this country. Ok, my point is if we review the budget quarterly we might be able to get the MDAs to respond more, the budget will be implemented in line with our expectations”.
Also speaking, the Leader of the House, Hon. Ado Doguwa called on government to invest in infrastructure.
“This budget as highlighted by Mr. President, I want to believe that the figure may have sounded quite very extraordinary-N16.39 trn. I believe that this is the highest figure we have ever had in the course of my engagement for the money bill. But I want to believe that honorable members will accept the fact that, with the changing economic situation and with the rising economic challenges and demands by our people, and in order for us to address the infrastructure deficit in the country, we will also be able to engage some of these new issues-health issues-the COVID-19 pandemic, there is the need for the government to invest heavily in infrastructure in this country”, he said.
No allocation for erring MDAs-Elumelu
In his intervention, the Minority Leader, Hon. Ndudi Elumelu urged all the standing committees to ensure zero allocation to Ministries, Departments and Agencies, MDAs that failed to implement their capital projects in the previous budget despite 70 percent releases.
“I will not go into criticizing and saying anything ordinary, other than to charge our committees. If you recall we passed a resolution urging our standing committees to be up and doing by going to find out which project that have been implemented and kick started to enable us know what to do in the estimate that has been presented to us. So I expect the standing committees should live up to expectations and ensure that assignment is concluded and that will inform what we are going to do in terms of the budget going forward.
“My worry is about the loan but like someone submitted, the person said there’s nothing wrong about loan but when loan is taken it should be for a good purpose. With emergence of COVID-19,This budget should be able to address those abnormalities before us, by ensuring that our medical centers are up to date with infrastructural technology required. I see no reason why this National Assembly should patronize such agencies, if we find out that truly, they have not done anything to the previous budget. I submit that this National Assembly should not for any reason give money to that agency”, he said.
World Bank blacklists 17 Nigerians, firms over corrupt practices
The World Bank has disqualified nine Nigerian individuals and firms from executing any contract with it for engaging in corrupt, fraudulent and collusive practices.
Eight Nigerian companies debarred by the African Development Bank (AfDB) were also recognised by World Bank under the cross-debarment policy.
Cross-debarment is the recognition of debarment decisions by signatories to the Agreement for Mutual Enforcement of Debarment Decisions on the same terms as the initial decision.
This is contained in its recent report titled ‘Sanctions System Annual Report for Fiscal Year 2021’.
This report covers the Fiscal Year 2021 (FY21) — from July 1, 2020 to June 30, 2021 — and was prepared by the offices of the World Bank Group’s (WBG) sanctions system.
The report stated, “In the fiscal year 2021, the World Bank Group sanctioned 57 firms and individuals, of which 54 were debarred with conditional release, making them ineligible to participate in projects and operations financed by institutions of the World Bank Group. In addition, three firms were sanctioned with conditional non-debarment, leaving them eligible to participate in World Bank Group-financed operations after meeting certain agreed-upon conditions.
“The institution also recognised 92 cross-debarments from other multilateral development banks (MDBs), while 45 World Bank Group debarments were eligible for recognition by other MDB.”
They are Sangtech International Services Limited, Sangar & Associates (Nigeria) Limited, Mashad Integrated And Investment Co Limited, and Medniza Global Merchants Limited — all banned for two years.
Others are ALG Global Concept Nigeria Limited, Abuharaira Labaran Gero, Qualitrends Global Solutions Nigeria Limited, and Maxicare Company Nigeria Limited. These firms are ineligible to participate in projects and operations financed by institutions of the World Bank for three years.
Commenting on the report, World Bank President, David Malpass, said; “The World Bank Group is firmly committed to placing governance, anti-corruption and transparency front and centre in our work. A stable, respected rule of law is essential to good development outcomes. An important piece of our anti-corruption efforts is the World Bank Group’s sanctions system.”
He said that since the beginning of the COVID-19 pandemic, the World Bank Group had deployed more than $157 billion in critical assistance to developing countries.
“Yet, for these resources to have the needed development impact on the hundreds of millions of people who live in extreme poverty, we must ensure that resources are used efficiently, effectively and for their intended purposes,” he said.
“And that means remaining vigilant to the scourge of corruption and ensuring that we promote the highest integrity and transparency standards in public finance.”
eNaira: FG targets $29bn from blockchain, digital currency
Digital currency and its underlying technology, blockchain, can increase Nigeria’s Gross Domestic Product by $29 billion in the next 10 years, President Muhammadu Buhari has said.
He stated this in Abuja on Monday at the unveiling of eNaira, stressing that Nigeria’s digital currency would help move people and businesses from the informal into the formal sector and increase the tax base of the country.
He said eNaira would cater for businesses and households seeking faster and cheaper means of payment instead of “private currencies” that have gained popularity and acceptance across the world, including Nigeria.
The President said, “In recent times, Your Excellencies, the use of physical cash in conducting business and making payments has been on the decline. This trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new Digital Economy.
“Alongside these developments, businesses, households, and other economic agents have sought new means of making payments in the new circumstances.
“The absence of a swift and effective solution to these requirements, as well as fears that Central Banks’ actions sometimes lead to hyperinflation created the space for non-government entities to establish new forms of ‘private currencies’ that seemed to have gained popularity and acceptance across the world, including here in Nigeria.
“In response to these developments, an overwhelming majority of Central Banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.”
Buhari added that the benefits of digital currencies cut across different sectors of and concerns of the economy.
He said, “Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of and concerns of the economy.
“Alongside digital innovations, Central Bank Digital Currency (CBDC) can foster economic growth through better economic activities. Indeed, some estimates indicate that the adoption of CBDC and its underlying technology, called blockchain, can increase Nigeria’s GDP by US$29 billion over the next 10 years.
“CBDCs can also help increase remittances, foster cross border trade, improve financial inclusion, make Monetary Policy more effective, and enable the government to send direct payments to citizens eligible for specific welfare programmes.
“It is on this basis that I am delighted to officially launch the Central Bank of Nigeria Digital Currency, called the eNaira, and in so doing, we have become the first country in Africa and one of the first in the world to introduce a Digital Currency to her citizens.”
governor of the CBN, Godwin Emefiele, said the eNaira would make a significant positive difference to Nigeria and Nigerians.
The apex bank rolled out two applications for the digital currency on Monday — eNaira speed wallet and eNaira merchant wallet.
As Buhari launches eNaira, CBN unveils 100 for 100 financial instrument
President Muhammadu Buhari has launched the Central Bank of Nigeria (CBN) digital currency, the e-Naira.
While launching the digital currency, at the State House,Abuja, this afternoon, the president commended the CBN Governor, Mr. Godwin Emefiele, for his efforts towards ensuring a more efficient payment system in the country.
In his address, Emefiele announced a new financial instrument titled “The 100 for 100 PPP – Policy on Production and Productivity,” to reduce the nation’s overdependence on imports.
According to the governor, the instrument, “will be anchored in our Development Finance Department under my direct supervision.
“Under this policy the CBN will advertise, screen, scrutinize and financially support 100 targeted private sector companies in 100 days, beginning from 01 November 2021, and rolling over every 100 days with new set of 100 companies, whose names will be published in National Dailies for Nigerians to verify and confirm.
“The purpose of this instrument is to take further steps to reverse our over reliance on imports.”
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