2024 N26tr budget: Federal Government targets N7.8tr loan.

2024 N26tr budget: Federal Government targets N7.8tr loan.

The Senate yesterday passed the 2024 – 2026 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP). 

It followed the Senate’s consideration and adoption of the report of the Joint Committees on Finance, Appropriations, National Planning and Economic Affairs and Local and Foreign Debts on the MTEF/FSP.

The report was presented by the Committee Chairman on Finance and Chairman of the Joint Committee, Senator Sani Musa (APC – Niger East).

The Senate approved N26 trillion aggregate expenditure for 2024.

The sum comprises N10.2trillion for recurrent expenditure, including personnel costs for ministries, departments and agencies (MDAs) of N4.49 trillion; capital expenditure (exclusive of transfers) of N5.9trillion; special intervention (recurrent) of N200 billion; and special intervention (capital) of N7billion.

The Senate also approved a revenue projection of N16.9 trillion, N9 trillion budget deficit, N7.8 trillion borrowings and statutory transfers of N1.3 trillion.

Others are N8.2 trillion for debt service, N243.6 billion for sinking fund and N1.27 trillion for pension and gratuities. 

The committee, in its other recommendations adopted by the Senate, called for the winding up and probe of NIPOST.

It said: “Having discovered that the subsidiaries of NIPOST so created are irregular and illegal, we therefore recommend for them to be wound up and deregistered immediately.

“The sum of N10 billion released by the Ministry of Finance for the proposed NIPOST restructuring and recapitalisation be investigated and the funds fully recovered if established to be injudiciously utilised by the relevant committee of the Assembly charged with the responsibility of fiscal prudence.

“All tax waivers not directly linked to non-governmental/ non-profit organisations should not be granted.”

It also said all tax waivers from 2015 to date should be investigated by the relevant committees of the Senate. 

It further recommended that the oil price benchmark of USD$73.96, $73.76 and $69.90 per barrel be approved for 2024, 2025, and 2026.

Other recommendations include: “That the daily crude oil production of 1.78 mbpd, 1.80 mbpd, and 1.81 mbpd, for 2024, 2025, and 2026 respectively be approved subject to NNPC confirmation of actual and verifiable deliveries.

“The Exchange Rate of N700, N665,61, and N669.79 to US$1 proposed by the Executive for the periods 2024-2026 be considered for approval with Federal Government’s vigorous drive to enhance local production (both oil and non-oil) for increased foreign reserve growth.

“That all items locally produced should be outrightly banned from importation and customs tariffs amended accordingly.

“That CBN should ensure that banks have access to FOREX in order to provide funds to importers and other users to prevent patronage of the parallel market.

“That, in light of the Federal Government’s response of fiscal measures to stimulate the economy by significant investment in infrastructure, SMEs, and the agricultural sector, the GDP growth rates of 3.76 per cent, 4.22 per cent, and 4.78 per cent during the years 2024, 2025, and 2026 be approved.

“That the inflation rate of 21.40 per cent in 2024, 20.30 per cent in 2025, and 18.60 per cent in 2026 be approved.

“That the Federal Government’s target-setting approach and its determination to enhance the major revenue-generating agencies collection efficiency will support the fiscal deficit estimate of N9 trillion (including Government Owned Enterprises (GOEs) is noted and hereby approved.”

The committee urged the Federal Government to continue to enforce the Performance Management Framework for GOEs by ensuring that they operate in a more fiscally responsible manner while reviewing their operational efficiencies and declared costs-to-income ratios.

It added: “That the N7.8 trillion in new borrowings (both domestic and foreign) be supported as well, given the country’s current effective debt management strategy, which has moderated borrowing costs and decreased the amount of short-term debt in the portfolio and refinancing risk.

“That the National Assembly begin the process of amending the Fiscal Responsibility Act (FRA, 2007) in order to enhance the agencies ability to enforce fiscal responsibility and impose sanctions on erring corporations.”

The Senate adopted the recommendation that the National Assembly Standing Committees should review the laws governing the activities of all revenue-generating agencies.

This, it said, is to identify specific sections or clauses that need to be amended in order to plug waste and increase the government’s capacity to generate revenue.

The Senate urged Federal agencies to deploy ICT in the collection of all revenues, including stamp duty activities, in order to block leakages.

The report adds: “The Budget Office of the Federation and the Ministry of Finance Budget, and National Planning (should) re-evaluate the underlying assumptions for all Federal Government agencies’ income targets in order to confirm the veracity of those assumptions and the effects.

“The Federal Government should continuously assess the qualifications and performance of agency heads in order to guarantee that the government’s total income target as stated in the MTEF/FSP and the yearly budgets are consistently met with adequate sanction where necessary.

“That all MDAs pay for services provided by other government agencies on time and in full unless it is determined that the beneficiary agencies are statutorily exempt from such payments.”

“That Ministry of Finance Incorporated (MOFI) examine the activities of all government agencies currently operating under the partial and full commercialisation arrangement allowing them to compete with their peers in the private sector and thereby making a more meaningful contribution to the Federal Government’s revenue generation drive.

“That the Bureau of Public Enterprises Act be amended to remove the clause(s) that create conflict between BPE and MOFI where MOFI should be the authorised custodian of all Federal Government assets, both liquid and physical.

“That the Nigeria National Petroleum Corporation Limited (NNPCL) should work towards reducing its cost of production and operational costs with the view of increasing available government revenue.”