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MDAs to Submit 2017 Budget Electronically

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  • MDAs to Submit 2017 Budget Electronically

The Federal Government has directed all Ministries, Department and Agencies (MDAs) to submit their 2017 budget proposals to a designated web portal domiciled in the Budget Office.

This is a departure from the old practice of MDAs submitting their annual budgets through flash drives to the Budget Office. Sources said the new development was designed to stop the hitches of this year’s budget creeping in to next year’s budget. The Budget Office is expected to review it online and send it back online after corrections have been effected.

The Minister of State in the Budget Ministry, Mrs. Zainab Ahmed who spoke yesterday in Abuja, sai the new process of submitting budget by MDAs was also designed to limit human interface and ensure better quality budget 2017.

According to her, the Federal Government has achieved 41.25 per cent in 2016 budget implementation as at October with a total disbursement of N2.5 trillion.

Speaking in an interview with reporters in Abuja at the second presidential economic communications workshop, the minister also confirmed that the 2017 budget is ready but that the executive was waiting for the approval of Medium Term Expenditure Framework (MTEF) currently in the custody of the National Assembly for approval.

“We planned 2017 budget very carefully by putting in place an IT system that minimises human interface in the budget process to make the budget a very high quality budget. We now have a web portal whereby ministries prepare their budget and submit online and the budget office reviews it online and send back via online where corrections would be made. This will reduce significantly the human interface to ensure that we have a high quality budget,” she said.

She said the executive arm was ready with 2017 budget, but waiting for the National Assembly’s approval of MTEF before its submission to the National Assembly.

With regard to the current budget, the minister said the 2016 has been very challenging to the Federal Government in terms of revenue receipt and budget implementation.

She said: “It’s been very challenging for us. Apart from the fact that we are in recession, we have some of our people facing humanitarian crisis in the Northeast. The Niger Delta crisis has pruned down revenue from oil and gas. We have a lot of projects that we planned to do but the revenue yield is not as we projected in the budget and this is largely due to vandalism of major oil infrastructures in the Niger Delta region. We have minimal revenue but we have a lot of plans to share and allocate resources.”

On what has been disbursed from the 2016 budget, she said the government has released about N2.5 trillion of N6.06 trillion 2016 budget. Of the releases, she said N753 billion was for capital projects, a significant portion of which was devoted to infrastructure and related projects. N108 billion for overheads, N117 billion as statutory transfers, N142 billion for consolidated pension, N1.2 trillion for personnel and N135 billion for service wide.

The minister also said the government was currently developing a National Economic Recovery plan covering 2017- 2020.

The plan, she said would guide preparation of annual budgets and guide the Economic Management Team and budgeting process over short to medium term.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Economy

Nigeria Borrows $4 Billion Through Eurobonds as Order Book Peaked at $12.2 Billion

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Eurobonds - Investorsking

The Federal Government of Nigeria has raised a fresh $4 billion through Eurobonds, according to the latest statement from the Debt Management Office (DMO).

Nigeria had set out to raise $3 billion but investors oversubscription peaked at $12.2 billion, enabling the Federal Government to raise $1 billion more than the $3 billion it announced.

DMO said “This exceptional performance has been described as, “one of the biggest financial trades to come out of Africa in 2021” and “an excellent outcome”.

Bids were received from investors in Europe, America, Asia and several local investors. The statement noted that the quality of investors and the size of the Order Book demonstrated confidence in Nigeria.

The Eurobonds were issued in three tranches, details, namely seven years–,$1.25 billion at 6.125 per cent per annum; 12 years -$1.5 billion at 7.375 per cent per annum as well as 30 years -$1.25 billion at 8.25 per annum.

The DMO explained that the long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 –2023.

The Eurobonds were issued as part of the New External Borrowing stipulated in the 2021 Appropriation Act. DMO noted that the $4 billion will help finance projects state in the 2021 budget.

Nigeria’s total debt stood at $87.239 billion as at March 31, 2021. However, with the $4 billion new borrowing, the nation’s debt is now $91.239 billion. A serious concern for most Nigerians given the nation’s weak foreign revenue generation and rising cost of servicing the debt.

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CIBN Banking and Finance Conference 2021: Structural Transformation and Growth

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Coronation Merchant Bank - Investors King

Today we highlight one of the sessions, ‘Economic Recovery’, at the recently concluded CIBN Banking and Finance conference. This was a hybrid event in Abuja, Lagos and partially virtual last week. The Covid-19 disruptions have created demand and supply shocks in the global system while unlocking new opportunities for growth.

Given the pre-existing financing challenges and growing spending needs, many developing countries are in dire need of financial support. As a result of the pandemic, the financing gap for the sustainable development goals increased by 70% (over USD4.2bn). The speaker on this session, Amina J. Mohammed, Deputy SecretaryGeneral of the United Nations and Chair of the United Nations Sustainable Development Group focused on structural transformation, technology, finance and sustainability.

Recent developments such as the allocation of the USD650bn in Special Drawing Rights (SDR) were highlighted during the session. Although the SDR offers improved liquidity into the system, Africa is set to receive only USD32.2bn (or 6.4% of the total amount). Therefore, it is important that the funds are channeled towards well-targeted sectors that can contribute to sustainable development.

The banking and finance sector plays a crucial role. The Africa Continental Free Trade Area (AFCFTA) agreement offers an opportunity for the financial sector to work within a continental market of 1.2 billion people. According to Amina J. Mohammed, three main actions areas will reshape the financial sector and support stronger recovery.

The first, better customer engagement with a dynamic range of relevant products and services that go beyond bank-based financing mechanisms and offer innovative financial products tailored to specific needs of business ecosystems. Second, the adoption of new operating models to drive efficiency and inclusion. Third, a deliberate focus on enabling sustainable development investing.

Furthermore, Nigeria’s banking and finance industry is well positioned to drive specific UN sustainable development goals such as inclusive and affordable credit, especially for micro, small and medium-sized enterprises. The industry can also provide support towards climate change.

Technology also featured in the discussion points. Undoubtedly, technology is a catalyst for growth across economies and the pandemic has further exposed the deficit within the sector across developing countries. Investments in digital infrastructure need to be rapidly expanded and scaled up to boost socio-economic development.

The speaker commended the FGN’s efforts on its push towards sustainable economic recovery. Some policy and regulatory reforms highlighted include, regulation of fintechs and related services to strengthen payment systems and regulate data protection; the green bonds which Nigeria first issued in 2017 in support of green projects, including solar energy and the modernisation of the Nigerian stock exchange that has given rise to a new operational structure and leadership.

These are laudable steps. However, we note that there is still room for improvement. To achieve double-digit GDP growth and sustainable development, structural transformation should remain on the FGN’s priority list.

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Economy

FG Plans To Deliver 15 Projects Across The Country With $4B Foreign Loans

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Muhammadu Buhari

Nigeria’s Presidency has explained that a total of 15 projects, spread across the six geo-political zones of the country, are to be financed with more than $4 billion from multilateral institutions.

Malam Garba Shehu, Senior Special Assistant to the President on Media and Publicity stated on Saturday in Abuja that the loan is under the 2018-2021 medium-term (rolling) external borrowing plan.

He revealed that President Muhammadu Buhari had already requested the Senate to approve sovereign loans of $4.054billion and €710million as well as grant components of $125million for the proposed projects.

He quoted the letter by the president as saying that the sovereign loans will be sourced from the World Bank, French Development Agency (AFD), China-Exim Bank, International Fund for Agricultural Development (IFAD), Credit Suisse Group and Standard Chartered/China Export and Credit (SINOSURE).

He said: “The President’s request to the Senate listed 15 proposed pipeline projects, the objectives, the implementation period, benefiting states, as well as the implementing Ministries, Departments and Agencies (MDAs).

“A breakdown of the Addendum to the Proposed Pipeline Projects for the 2018-2021 Medium Term (rolling) External Borrowing Plan shows that the World Bank is expected to finance seven projects including the $125million grant for ‘Better Education Services for All’.’’

According to him, the Global Partnership for Education grant is expected to increase equitable access for out-of-school children and improve literacy in focus states.

He expressed the hope that the grant, which would be implemented by the Federal Ministry of Education and the Universal Basic Education Commission (UBEC), would strengthen accountability for results in basic Education in Katsina, Oyo and Adamawa States.

Other projects to be financed by the World Bank, according to Shehu, are the State Fiscal, Transparency, Accountability and Sustainability Programme for Results as well as the Agro-Processing, Productivity, Enhancement and Livelihood Improvement Support Project.

He said the benefiting states for the agro-processing project included, Kogi, Kaduna, Kano, Cross River, Enugu and Lagos with the Federal Ministry of Agriculture and Rural Development as the implementing ministry.

The presidential aide stated that the objective of the project was to enhance the agricultural productivity of small and medium-scale farmers and improve value addition along priority value chains in the participating states.

Shehu added that the World Bank would also be financing the Nigeria Sustainable Water Supply, Sanitation and Hygiene (WASH) project in Delta, Ekiti, Gombe, Kaduna, Katsina, Imo and Plateau States, for the next five years.

According to him, the project, when completed, is expected to improve rural water supply, sanitation and hygiene nationwide towards achieving Sustainable Development Goals (SDGs) for water supply and sanitation by 2030.

“Under the external borrowing plan, the World Bank-supported projects also include Nigeria’s COVID-19 Preparedness and Response Project (COPREP), under the supervision of the Federal Ministry of Health and Nigeria Centre for Disease Control (NCDC).

“The project, which has an implementation period of five years, will respond to threats posed by COVID-19 through the procurement of vaccines.

“Furthermore, no fewer than 29 states are listed as beneficiaries of the Agro-Climatic Resilience in Arid Zone Landscape project, which is expected to reduce natural resource management conflicts in dry and semi-arid ecosystems in Nigeria,’’ he said.

He gave the names of the benefiting states for the project to be co-financed by the World Bank and European Investment Bank (EIB) to include: Akwa Ibom, Borno, Oyo, Sokoto, Kano, Katsina, Edo, Plateau, Abia and Nasarawa.

Others are; Delta, Niger, Gombe, Imo, Enugu, Kogi, Anambra, Niger, Ebonyi, Cross River, Ondo, Kaduna, Kebbi, Jigawa, Bauchi, Ekiti, Ogun, Benue, Yobe and Kwara.

He said the World Bank would also be funding the Livestock Productivity and Resilience project in no fewer than 19 states and the Federal Capital Territory (FCT) while the China EXIM Bank is expected to finance the construction of the branch line of Apapa-TinCan Island Port, under the Lagos-Ibadan Railway modernisation project.

Shehu said: “The French Development Agency will finance two projects, which include the National Digital Identity Management project and the Kaduna Bus Rapid Transport Project.

“The digital identity project will be co-financed with World Bank and EIB.

“The Value Chain Development Programme to be financed by IFAD and implemented in Anambra, Benue, Ebonyi, Niger, Ogun, Taraba, Nasarawa, Enugu and the Kogi States will empower 100,000 farmers, including over 6,000 and 3,000 processors and traders, respectively.

“The loan facility to be provided by European ECA/KfW/IPEX/APC will be spent on the construction of the Standard Gauge Rail (SGR) linking Nigeria with Niger Republic from Kano-Katsina-Daura-Jibiya-Maradi with branch to Dutse.

“The specific project title, Kano-Maradi SGR with a branch to Dutse, has an implementation period of 30 months and will be implemented by the Federal Ministry of Transport.

“The Chinese African Development Fund through the Bank of China is expected to provide a loan facility of $325 million for the establishment of three power and renewable energy projects including solar cells production facility Phase 1 & II, electric power transformer production, Plants 1, II, III and high voltage testing laboratory.

“The National Agency for Science and Engineering Infrastructure (NASENI) will implement the project aimed at increasing local capacity and capability in the development of power and renewable energy technologies and infrastructure,’’ he further disclosed.

Shehu revealed that Credit Suisse would finance major industrialization projects as well as micro, small and medium enterprises schemes to be executed by the Bank of Industry.

He said the SINOSURE and Standard Chartered Bank would also provide funds for the provision of 17MW Hybrid Solar Power infrastructure for the National Assembly (NASS) complex. “The project, with an implementation period of five years, is expected to address NASS power supply deficit and reduce the higher overhead burdensome cost of running and maintaining fossil fuel generators (25MW installed capacity) to power the assembly complex,’’ he added.

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