The Federal Government borrowed a total of N600bn between January and June this year to augment the shortfall in revenue caused by various challenges affecting oil and non-oil receipts.
The amount, which was borrowed from the domestic market, was contained in a presentation made by the Minister of Budget and National Planning, Senator Udo Udoma, to civil society groups on the proposed Medium Term Expenditure Framework 2017-2019.
The MTEF, which is expected to be submitted to the National Assembly in October, provides the basis for annual budget planning and consists of a macroeconomic framework that indicates fiscal targets, estimates, revenues and expenditure, including government’s financial obligations in the medium term.
The N600bn borrowed in the first six months of this year, according to the document, is about 33 per cent of the N1.8tn approved borrowing in the 2016 budget.
The minister stated in the presentation that the 2016 budget performance was reflective of the low revenue output attributable to the global and domestic development.
For instance, Udoma said oil revenue fell significantly in the second quarter of this year compared to the first quarter as a result of increased pipeline vandalism and production shut-ins.
The minister stated, “Non-oil revenues declined compared with forecasts in the budget due to slow-down in economic activities and the acute shortage of foreign exchange.
“The shortfall was augmented by domestic borrowing amounting to N600bn, about 33 per cent of approved borrowing of N1.81tn.”
Since the beginning of this year, gross revenue into the Federation Account has been experiencing a huge decline owing to the shutdown of production for repairs of critical infrastructure.
For instance, there had been explosions at the Escravos oil export terminal, while force majeure was declared at the Brass terminal in January and February as a result of attacks on oil facilities.
The 2016 budget, which was signed by President Muhammadu Buhari on May 6 this year, had projected daily oil production output of 2.2 million barrels, with the budgeted oil benchmark price of $38 per barrel.
Based on the budget, the Federal Government had projected a total revenue of N3.86tn where oil-related revenues were expected to contribute N820bn.
In the same vein, non-oil revenues comprising Companies Income Tax, Value Added Tax, Customs and Excise duties and Federation Account levies are expected to contribute N1.45tn, while N1.51tn is projected to be earned as independent revenues from the Ministries, Departments and Agencies of government through strict compliance with the Fiscal Responsibility Act, 2007.
Speaking on the borrowing, financial analysts blamed the development on the inability of the country to effectively diversify its sources of revenue away from oil.
They said that with diversification, the government would be able to generate enough revenue to fund its operations.
Those who spoke on the issue in separate telephone interviews with our correspondent are a former Acting Managing Director, Unity Bank Plc, Mr. Muhammed Rislanudeen; and President, Institute of Fiscal Studies of Nigeria, Mr. Godwin Ighedosa.
Ighedosa said, “We have a high fiscal deficit, which can only be funded through borrowing. When you borrow for investment, it improves the position on your balance sheet; and when you borrow for consumption, it can cause problems for the economy as it will affect the level of confidence in the economy from investors, because they will assume we can’t manage our economy.
“We already have a debt overhang, and as it is, we are building that up and so there is a need to reduce the rate of borrowing.”
Zabarmari Massacre: Buhari to Provide More Resources for the Nigerian Military
President Muhammadu Buhari has promised to provide more resources to the military in the aftermath of the Zabarmari massacre.
On Saturday, Boko Haram killed 43 people with around 70 people still missing in Zabarmari, a village in Borno State.
Reacting to the massacre, Buhari, through his official Twitter handle @MBuhari said “Nothing is more important than ensuring the security of lives and property of Nigerians. Everything is secondary when security is at stake. I will ensure that more resources are made available to the military and other security agencies to prosecute the war against terrorism.
“As we mourn all the lives lost in Zabarmari, the Armed Forces have been given the marching order to take the fight to the insurgents, not on a one-off, but on a continuous basis, until we root out the terrorists.
“We will intensify our cooperation with neighbouring countries on bilateral and multilateral levels, to ensure that there is no hiding place for the terrorists.
“As I noted earlier, the massacre by Boko Haram in Zabarmari is nothing short of senseless, barbaric, gruesome and cowardly. It reinforces our resolve to root out all forms of insurgency and insecurity not just in Borno but everywhere across Nigeria.”
Boko Haram Kills Rice Farmers in Borno State, Northeast Nigeria
Rice farmers were killed on Saturday morning in the Northeast Nigeria by suspected Islamist militants, Boko Haram, according to a Reuters Report.
The report also noted that 30 of the people killed were beheaded while over a dozen others were still missing.
However, resident of the Zambarmari Village where the attacks took place said a total of 70 people were feared dead.
Another resident and Amnesty International were quoted as saying at least 10 women were among those missing.
In another statement by Edward Kallon, the United Nations’ humanitarian coordinator in Nigeria, it was armed men on motorcycles that led the brutal attack on civilians harvesting their fields.
“Armed men on motorcycles led a brutal attack on civilian men and women who were harvesting their fields,” Edward Kallon stated.
“At least 110 civilians were ruthlessly killed and many others were wounded in this attack,” he added, noting that several women are believed to have been kidnapped.
“The incident is the most violent direct attack against innocent civilians this year. I call for the perpetrators of this heinous and senseless act to be brought to justice,” Kallon said.
On Sunday, Governor Babaganan Umara Zulum of Borno State, who was at the burial told journalists that at least 70 farmers were killed on Saturday.
The Governor, therefore, called on the Federal Government to recruit more Civilian Joint Task Force members, Soldiers and civil defence fighters to protect farmers in the region.
He added that people are facing desperate choices.
“In one side, they stay at home they may be killed by hunger and starvation, on the other, they go out to their farmlands and risk getting killed by the insurgents,” he said.
In The Fight Against Corruption, No Individual is Bigger Than The State – Buhari
In response to the suspended acting EFCC Chairman, Ibrahim Magu, President Muhammed Buhari, lamented that the anti-corruption war becomes endangered “when persons entrusted with the responsibility of that magnitude become suspects themselves.”
Buhari, whose vision is to put an end to corruption in Nigeria, believed that every aspect of the nation’s life is enshrined in corruption and it’s of major concern when leaders of institutions saddled with the mandate to fight the menace are found in the waves of the corruption they claimed to be fighting.
This act is a great abomination not only because it strikes at the root but it also trivialises and undermines the anti-corruption crusade itself, the President explained.
He further said that in a bid to put an end to this great abomination, he had set up Ayo Salami Panel to unravel the mystery behind the mystique of Magu’s alleged involvement in corruption that his administration is fighting.
Buhari said that his administration is ready and willing to go all out in the fight against corruption, and no one is too big nor above the law to become a victim of anti-graft’s sledgehammer.
The president said, “However, the stark reality of widespread corruption becomes poignant when allegations of corruption touch on the leadership of an institution set up by law to coordinate and enforce all economic and financial crimes.
“It is an abomination that strikes at the root and undermines the government’s anti-corruption programme.
“It was in response to the serious allegations against the Economic and Financial Crimes Commission that I set up a panel headed by the Honourable Justice Isa Ayo Salami, retired President of the Court of Appeal, via an Instrument dated 3rd July 2020 pursuant to the Tribunals of Inquiry Act (Cap T21, LFN, 2004).
“We recognise that there are more grounds to cover in the war against corruption, and we are prepared to go out to possess those lands by cutting off any stream that nourishes the seed of corruption and supports its growth.
“Let it be known that in the fight against corruption, no one is too big to tackle, as no individual is bigger than the Nigerian State!”
Despite Opening in Red, The Nigerian Stock Exchange Closed in Green
Moderna Shares Jumped 20.24 Percent After Announcing Plans to Seek Approval for COVID-19 Vaccine in US and Europe
Naira Devaluation Pushed Exchange Rate to N500/US$ at Black Market
Business2 months ago
Npower News on Permanency for Batch A, B
Forex2 months ago
Naira Improves Against Global Counterparts on Black Market
Business2 months ago
Buhari Budgets N420 Billion for Npower, Other Social Investment Programmes in 2021 Budget
Forex3 months ago
Zenith Bank Joins Other Banks to Cap International Spend Limit at $100/Month
Business3 months ago
Again, UBA Reduces International Spending Limit on Naira Card as Forex Scarcity Persists
Cryptocurrency2 months ago
Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue
Business3 months ago
FG to Absorb Exited N-power Beneficiaries into New Program
Stock Market3 months ago
Zenith Bank Declares 30 Kobo Interim Dividend for H1 2020