A cross section of the members of the House of Representatives on Tuesday called for stiffer sanction for heads of high profile revenue generating agencies including Central Bank of Nigeria (CBN) that fail to comply with extant financial regulations especially on remittance of accrued revenue into government’s coffers.
The lawmakers stated this during the debate on the general principles of the N13.08 trillion as encapsulated in the 2021 budget proposal laid by President Muhammadu Buhari before the joint session of the National Assembly last Thursday.
Some of the lawmakers who spoke during the debate, including Deputy Minority Leader, Hon. Toby Okechukwu; Chairman, House Committee on Army, Hon. Abdulrasak Namdas; Hon. Bob Tyough (PDP-Benue); Hon. Stanley Akinjide; Hon. Leke Abejide, Hon. Yusuf Gadgi, Hon. Olumide Osoba, Hon. Ibrahim Olanrewaju, Chairman, House Committee on Air Force, Hon. Shehu Koko and Hon. Ben Igbakpa applauded the timely submission of the 2021 budget proposal to the Parliament.
In his lead debate, Majority Leader, Hon. Ado Doguwa explained that the 2021 budget christened as ‘Budget of Economic Recovery and Resilience’ was premised on key parameters and Fiscal Assumptions, namely: $40 oil benchmark; 1.86mbpd oil production (inclusive of condensates of 300,000 to 400,000 barrels per day); N379/$ exchange rate; 3.0 GDP growth and 11.95 percent inflation rate; total revenue of N7.886 trillion, including Grants and Aid of N354.85 billion as well as the revenues of 60 Government-Owned Enterprises; while Oil revenue is projected at N2.01 trillion and Non-oil revenue is estimated at N1.49 trillion.
According to him, other expenditure for the 2021 fiscal year include: N5.65 trillion for Non-Debt Recurrent Costs; N3.76 trillion for Personnel Costs; N501.19 billion for Pensions, Gratuities and Retirees’ Benefits; N625.50 billion for Overheads; N3.124 trillion for Debt Service; N484.49 billion for Statutory Transfers and N220 billion Sinking Fund (to retire certain maturing bonds).
Under the statutory transfers, the sum of N63.51 billion was proposed for Niger Delta Development Commission; N29.70 billion for North East Development Commission; N110 billion for National Judicial Council; N70.05 billion for Universal Basic Education Commission; N40 billion for Independent National Electoral Commission; N128 billion for National Assembly; N5.20 billion for Public Complaints Commission; N3 billion for Human Rights Commission and N35.03 billion for Basic Health Care Provision Fund.
He observed that the “implementation of 2020 budget faced a lot of challenges such as coronavirus and the drastic fall in the prices of crude oil in the international market and economic challenges across the globe.
“Inspite of this the government was able to release almost 60 percent of the capital estimate, with promise to release more funds for capital projects before the end of the year. As a result of challenges the budget had to be reviewed and capital expenditure reduced,” he noted.
On his part, the Deputy Minority Leader, Hon. Toby Okechukwu (PDP-Enugu) demanded for accountability on the utilization of the proceeds accrued from deregulation of the downstream of the petroleum industry, as well as trillions of naira being spent as intervention funds by the CBN.
He said: “Mr. Speaker I represent the opposition so we should be allowed to talk. The deficit provision which the President alluded to in 2014, the budget was 4.6 trillion, today it’s 13 trillion. But when you compare, this there has been a lot of motions without movement. The provision for fuel subsidy in 2014 was 268 billion.
“I appreciate the effort to christened and baptized this budget as budget of recovery and under-recovery. But we have not been told what has been spent in the past three years. It is important for us to note that the Committee on Finance did a thorough work reflecting some leakages with regards to agencies of government.
“Some of them are remitting 25 percent because that is the policy, some are not remitting at all. In our very eyes, there are lots of expenditures being done in the past three years of governance. We must subject these things to scrutiny,” he tasked the House, just as he emphasized the need to prioritize road infrastructure across the country.
“The provision for subsidy in 2014 was 268 billion I appreciate the efforts to christen and baptize this budget as budget of discovery and resilience but we have not been told what has been spent on subsidy and under recovery for the past four years. Whatever name you give it Mr. Speaker, Parliament needs to know and to what extent that has been ploughed into 2021 budget, the recoveries that has been made by the deregulation.
“In our very eyes, there is a lot of expenditure being done by parastatals and agencies of government and I will take one. It is on record that the CBN has spent a whole lot of money in various interventions close to running a parallel government without appropriation. If they have autonomy that allows them to trade with some of the monies in their custody, they should be prudent to report to Parliament what they made.
“How I wish that the Parliament can guide them and provide appropriate information with regards to what our constituents want. These various Interventions as at today, Federal Ministry of Works is owing about N300 and something billion naira of liabilities, that is work done; and we have interventions that are so passive. What if they take part of trillions of Interventions and say Federal Ministry of Works, please we are intervening, provide Nigerians with roads, let us offset your liabilities and you give us your appropriate framework to pay back that money. That will be a contribution. So I believe that we need to go back. Even the 25% we spoke about, it’s like CBN is not remitting.
“We must err on the side of prudence to make these resources work. If they are intervening in infrastructure please let us know, it will be a clear mandate but to go on a low ranger activity creating alternatives it will not help us,” the Deputy Minority Leader stressed.
In his intervention, the Speaker of the House of Representatives, Hon. Femi Gbajabiamila who acknowledged the concerns raised on the under-remittance of revenue by the MDAs, said: “Hon. Toby made some very fine points particularly on the issue of remittance and I think we are all on the same page on that. But we have to look for ways and means to make sure that remittances are made and form part of the revenue of this country by government agencies. We want to amend our laws if need be and block loopholes and wastages in that area.
“CBN acting ultra vires as I’ve always said, what the President of Nigeria cannot do nobody else can.
“I think it’s important to say this, when we pass this appropriation law, for the first time, we must have penalties embedded within the law and that’s something we have never done. We just look at the appropriation law as a document.
“It’s a law like any other law and if you look at your law, your laws have consequences embedded in them, penalties embedded in them. So I think we should look at adequate penalties for erring Agencies or personalities who flout the law. So that may be a new innovation in this process,” Hon. Gbajabiamila ruled.
On his part, Hon. Stanley Akinjide (PDP-Oyo) also underscored the need for relevant regulatory agencies to adopt technology to corruption, block leakages and reduce the cost of governance.
“We need technology to solve the leakages in our budget process. There are ways to create jobs for our youths, if we adopt the right technology. It could be the way for the future. We can’t continue to depend on oil and borrowing. If we adopt the right automation all these leakages will be sorted out,” he stressed.
Also speaking, Hon. Leke Abejide (ADC-Kogi) who noted that the budget proposal submitted by the President cannot make any meaningful impact, urged the House to redirect fund to more productive sector that could help in enhancing revenue generation.
He also called for reducing cost of foreign travels and re-channel the money saved for other productive capital ventures, as well as ensure strict compliance with debt servicing as scheduled
In his intervention, Hon. Yusuf Gadgi (APC-Plateau) expressed concern that despite increase in VAT and other sources there was no commensurate impacts on the citizens well-being and infrastructural development.
He also urged all the Standing Committees to come up with recommendations on how to address the issue of poor management of revenue generation.
“The budget is not balanced in terms of revenue generation, Ministries, Department and Agencies mismanaging our revenues. Why is our revenue still on the same spot when we have increase in VAT and other taxes? We need to see the positive of those increments on our revenue,” he urged.
Also speaking, Hon. Olumide Osoba who accused MDAs of misappropriating public funds, stressed the need for the Executive to ensure prompt implementation of the annual budget.
In his view, Hon. Ibrahim Olanrewaju who frowned at the methodology adopted by the Executive arm of government in budget preparation, kicked against the exclusion of the Parliament from the exercise.
Breakdown of the key capital spending allocations in the 2021 Budget include: N198 billion (inclusive of N150 billion for the Power Sector Recovery Plan); N404 billion for Works and Housing; N256 billion for Transportation; N121 billion for Defence; N110 billion for Agriculture and Rural Development; N153 billion for Water Resources; N51 billion for Industry, Trade and Investment; N127 billion for Education; N70 billion for Universal Basic Education Commission; N132 billion for Health; N100 billion for Zonal Intervention Projects and N64 billion for Niger Delta Development Commission.
He added that the 2021 budget deficit (inclusive of Government Owned Enterprises and project-tied loans), is projected at N5.20 trillion, representing 3.64 percent of estimated GDP, slightly above the 3 percent threshold set by the Fiscal Responsibility Act, 2007.
President Buhari however explained that the deficit will be financed mainly by new borrowings totaling N4.28 trillion, N205.15 billion from Privatization Proceeds and N709.69 billion in drawdowns on multilateral and bilateral loans secured for specific projects and programmes.
While speaking on the current status of the country’s debt profile, President Buhari disclosed that the sum of N3.12 trillion is to be paid in 2021, representing an increase of N445.57 billion from N2.68 trillion in 2020.
He added that a total of N2.183 trillion has been set aside to service domestic debts while N940.89 billion has been provided for foreign debt service. N220 billion is provided for transfers to the Sinking Fund to pay off maturing bonds issued to local contractors and creditors.
According to him, total MDAs’ Overhead Costs and Government Owned Enterprises are projected to rise to N625.50 billion in 2021, mainly due to the inclusion of the overheads of an additional 50 Government Owned Enterprises, while Overhead provisions have also been made for newly created agencies.
He added that an aggregate sum of N3.85 trillion is expected to be available for capital projects in 2021 including: N1.80 trillion for MDAs’ capital expenditure; N745 billion for Capital Supplementation; N355 billion for Grants and Aid-funded projects; N20 billion for the Family Homes Fund; N25 billion for the Nigeria Youth Investment Fund; N336 billion for 60 Government Owned Enterprises; N247 billion for capital component of Statutory Transfers and N710 billion for projects funded by Multi-lateral and Bi-lateral loans.
The 2021 capital budget is N1.15 trillion higher than the 2020 provision of N2.69 trillion. At 29 percent of aggregate expenditure, the provision moves closer to this Administration’s policy target of 30 percent.
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