…says OAGF, Budget Office cant track sources of government revenue
President Muhammadu Buhari is expected to lay the 2021 budget before the National Assembly next week.
To this end, the House of Representatives on Wednesday, approved the 2021-2023 Medium Term Expenditure Framework, and Fiscal Strategy Paper (MTEF/FSP).
Part of the details of projections for the 2021 fiscal year as presented before the House by the joint committee on finance, appropriations, national planning and economic development, oil production has been put at 1.86 million barrels per day, at an international crude oil benchmark price of $40 per barrel.
The exchange rate has been projected at $379 to the naira, a GDP growth projection of 3.00 percent, and an inflation rate at 11:95 percent.
Other fiscal measures in the document, include a planned new borrowing (both domestic and foreign) of N4.28 trillion, special interventions (recurrent) of N350 billion, special interventions (capital) of N20 billion, and a projected fiscal deficit of N5.20 trillion.
Explaining further, the Chairman of the finance committee, Rep. James Faleke, disclosed that” the total federal government aggregate expenditure was projected at N13.08 trillion”.
The committee in its report, however accused majority of revenue generating agencies of engaging in “arbitrary and frivolous expenditure, making it difficult to determine actual federal government revenue, with a large percentage of these expenditure including huge paternal costs that was difficult to reconcile with the number of staff on their nominal payroll”.
The Committee therefore, recommended that the House should, as a matter of urgency, review the laws establishing revenue generating agaencies, to conform with the Fiscal Responsibility Act, 2007, as well as the Act itself in section 21 and 22 with the current expenditure to revenue ratio as issued by the presidency in a circular.
A joint session of the National Assembly, is billed to receive estimates of the 2021 budget next week.
The Joint Committee also said in their report that the Office of the Accountant General of the Federation and the Budget Office “are not able to track the entire revenue stream of the federal government as at when generated due to inadequate technology to harness and connect all revenue generating agencies to a central management system.
It also said that many of the science and technology oriented agencies, particularly the National Agency for Science and Engineering Infrastructure, National Office for Technology Acquisition and Promotion and the Nigeria Communication Satellite Limited had far greater potentials for revenue generation than they are currently doing.
The House however approved all the recommendations of the House joint committee on Finance, Appropriations and National Planning and Economic Development on the 2021-2023 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) submitted by the chairman of the joint committee, Abioudun Faleke earlier laid before the House.
The lawmakers also agreed that the joint committee and the Auditor General of the Federation should conduct a detailed analysis of all Ministries, Departments and Agencies (MDAs) funded through the Federal Government Budget to identify more Agencies that need to be taken off the budget wholly or partially and those that need to be retained, to further reduce the deficit burden of the Federal budget and free up more resources for other critical projects.
Other approved parameters are include GDP growth Rate of 3.00 percent; FGN retained revenue of N7.89 trillion with a fiscal deficit -N5.20 trillion (including GOE’s);
Pension, Gratuities and Retirees Benefits is to gulp N520.69 billion); with a total recurrent (Non-Debt) of N5.67 trillion and Personal Costs (MDAs + GOEs) of N3.58 trillion with special intervention (recurrent) taking N350 billion while special Intervention (capital) will gulp N20 billion.
Faleke said the intention of the budget of any nation to prioritize and optimally allocate public resources/fund for the promotion of planned and balanced economic development in the country, adding that “budget therefore, is a planning tool used by governments to drive economic policies such that material resources of the nation are harnessed and distributed to serve common good for securing maximum welfare, freedom and happiness of the citizenry.
“In consultation with State Governments, the federal Government is mandated by Section 11(1 )(b) of the Fiscal Responsibility Act (FRA) 2007, to “not later than Four Months before the commencement of the next financial year, cause to be prepared a Medium-Term Expenditure Framework for the next three financial years”
“This section provides an express responsibility among other things, state in clear terms, the policy thrust behind government revenue and expenditure as estimates for the next three year period, highlighting its revenue projections, expenditure plans and fiscal targets over the medium term.
“Section 11 (7-) 0f the FRA, 2007 then states that “the frame-work so laid shall be considered for approval with such modifications if any, as the National Assembly finds appropriate by a resolution of each House of the National Assembly”,
“However, this very important economic planning tool for the next three years came at a time of the complex and severe health and economic crisis imposed by the COVID-19 pandemic. Though global in effect, the macroeconomic evolutions have significantly impacted Nigerian economy.
“It was designed deliberately to minimize the adverse socio-economic consequents of the unabating COVID-19 pandemic and other crisis peculiar to our country, accommodate changing realities and propel the economy on the path of accelerated growth.
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