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Budget: FG to Release N350bn for Capital Projects

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  • Budget: FG to Release N350bn for Capital Projects

The Federal Government is set to release the first tranche of capital release of N350bn to its Ministries, Departments and Agencies for implementation of the 2017 budget.

The Minister of Finance, Mrs. Kemi Adeosun, disclosed this on Monday in Abuja during the public presentation of the 2017 Federal Government budget.

The event was attended by top officials in government, including the Minister of Budget and National Planning, Udo Udoma; Minister of State for Budget, Zainab Ahmed; Minister of Health, Prof. Isaac Adewole; and Minister of Foreign Affairs, Geoffrey Onyema, among others.

The 2017 budget christened, ‘Budget of Recovery and Growth’, was presented to the National Assembly on December 14, 2016, and passed by the lawmakers on May 11, 2017.

It was signed into law by the Acting President Yemi Osinbajo on June 12, 2017 and had a total expenditure outlay of N7.44tn, out of which N2.99tn was for non-debt recurrent spending; N2.36tn for capital expenditure; while debt servicing is to gulp N1.66tn.

Adeosun said her ministry was ready to make the release as soon as the budget was loaded, adding that a cash plan meeting would soon be held where the funds would be released to the MDAs.

“We are ready to make releases as soon as the budget is loaded. We have a cash plan meeting and we will release the first tranche of N350bn for capital projects,” she stated.

Udoma, in his presentation at the event, said the 2017 budget would run for one full year till June next year.

He, however, said that both the executive and the legislature were working on a template that would enable the country to commence a predictable budget year that would run between January and December of every year.

He added that if this arrangement was to commence from the 2018 budget year, then the 2017 budget would cease once the next year’s budget was passed and signed into law in January.

The implication of this, according him, is that some of the programmes of government contained in the 2017 fiscal document would be re-introduced in the 2018 budget.

Udoma explained, “The period of the 2016 budget was up till May and the period of the 2017 budget is again by the provision of the bill that was sent to us, which is now an Act of Parliament, continues again, this time, till June.

“However, whenever a new Appropriations Act comes into law, it overtakes the previous Appropriations Act. This means that assuming we were as we intend to achieve this year, we pass the 2018 budget into law; when it is signed into law, then the other one ceases to exist.

“So our aim is by January 2018, we want to get back to the January to December budget year. That means some of the projects in the 2017 budget will have to be carried over.”

He added that the budget that was passed by the National Assembly was what was signed into law by the Acting President, adding that an understanding had been reached for the submission of virement application to adjust the budget to reflect some of the projects, which the lawmakers tinkered with.

Such projects, according to him, are the railways, health and Federal Capital Territory projects.

Udoma said, “We identified some of our priority projects where the allocations have been reduced and discussed with the National Assembly and they graciously agreed that we can bring a virement application to restore the amount of those projects.

“Those projects include the railways, some health projects and Federal Capital Territory projects. But until that is done, the budget and the Appropriations Act reflect exactly what was passed by the National Assembly, and this is what the law is as I speak.

“However, we will be bringing virement application on a number of these projects under consideration. It’s only after they have approved it before it now becomes a law, and the budget will be adjusted to reflect that.”

The minister said the capital allocation of N2.36tn, which represents 31.7 per cent of the total budget, was directed at projects that were aligned with the core execution priorities of the Economic Recovery and Growth Plan.

Udoma noted that allocations had been targeted at critical economic sectors that had quick transformative potential such as infrastructure, agriculture, manufacturing, solid minerals, services, and social development.

For instance, he said the government would be embarking on a rail modernisation programme for which N148bn had been allocated mostly as counterpart funds on projects to be financed by China.

They are Lagos-Kano, Calabar-Lagos, Kano-Kaduna, Ajaokuta-Itakpe-Warri, Kaduna-Idu and other rail projects.

In the area of electricity, the minister said the sum of N40bn service-wide provision had been made to settle reconciled outstanding bills of government agencies as part of the strategy to revamp the ailing power sector.

For the housing sector, Udoma said the sum of N28bn was allocated in the budget for the Federal Government’s National Housing Programme nationwide.

He stated that the government was concerned about the number of abandoned projects scattered across the federation, adding that more targeted releases of funds would be done to relevant agencies of government.

The minister noted that in this year’s budget, funds had been allocated for construction and rehabilitation of over 65 roads and bridges across the six geo-political zones of the country.

Some of them are N10bn for the rehabilitation/reconstruction and expansion of Lagos-Shagamu-Ibadan dual carriageway sections I and II; N13.19bn for the dualisation of the Kano-Maiduguri road Sections I-V; N10.63bn for the rehabilitation of the Enugu-Port Harcourt dual carriageway Sections I-IV; and N7bn for the construction of the Second Niger Bridge phases 2A & 2B, including the access roads.

The Director-General, Budget Office of the Federation, Mr. Ben Akabueze, said the government would be engaging the citizens more in its budgeting process in order to enable the country to have a document that would be all inclusive.

He added that steps were being taken to bridge the gap between the people and the government by promoting transparency and accountability in the entire budget process.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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