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FG Raises Infrastructure Allocation by 75% in Two Years

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  • FG Raises Infrastructure Allocation by 75% in Two Years

The Federal Government has in the last two years increased the capital allocation to five key ministries by 75 per cent, an analysis of the 2018 budget provisions before the National Assembly has shown.

The combined provision for the execution of capital projects in the ministries of Power, Works and Housing; Transportation; Agriculture and Rural Development; Water Resources; and Industry, Trade and Investment in 2016 stood at N639.67bn.

However, allocations to the five key ministries in the proposed 2018 budget stand at N1.12tn.

This means that within a period of two years, the allocation to the five key ministries increased by N481bn or 75.27 per cent.

The 2016 budget provided the base because it was the first full budget drafted and implemented by the President Muhammadu Buhari administration.

Although the current administration took over power on May 29, 2015, it inherited a budget prepared by the previous administration led by President Goodluck Jonathan.

The Ministry of Power, Works and Housing received N422.97bn in 2016. This increased to N555.88bn in 2018.

The Ministry of Transportation received N188.67bn in 2016 and N263.1bn in 2018. The Ministry of Agriculture and Rural Development received N46.17bn in 2016 and N118.98bn in 2018.

The Ministry of Water Resources received N46.06bn in 2016 and N95bn in 2018. The Ministry of Industry, Trade and Investment, on the other hand, received N5.8bn in 2016 and N82.9bn in 2018.

In nominal terms, the increase reflects the concern of the government for infrastructure deficiency in the country.

Since inflation has also been on the downward trend in recent months, it can also be asserted that in real terms, the increases are a reflection of the government’s plan to build up infrastructure.

However, the expectation that expenditure on infrastructure will increase year-on-year is dashed when the capital provision for the 2017 budget is brought to the fore.

In 2017, the capital budget allocation to the infrastructure-bearing ministries stood at N1.03tn. This shows an increase of only 8.74 per cent.

A former President of the Nigerian Economic Society and currently Executive Director, African Centre for Shared Development Capacity Building, Prof. Olu Ajakaiye, is not disappointed at the minimal increase.

According to him, the 2017 budget was passed too late to be fully implemented; so, the 2018 budget should be a rollover of the current year’s, urging the National Assembly to pass the appropriation bill expeditiously to enable full implementation.

Meanwhile, the Coordinator, Nigeria Agribusiness Group, Mr. Emmanuel Ijewere, has said the 2018 provision for agriculture is below agreed terms.

He stated that the N118.9bn allocated to agriculture in the 2018 Appropriation Bill was far below what Nigeria and other African countries agreed and signed in the Maputo Agreement of 2013.

According to him, the Federal Government has never at any time been able to meet up with what it signed in the agreement with respect to funding agriculture in Nigeria.

Ijewere told one of our correspondents that it was agreed that member countries must allocate 10 per cent of their total budgets to agriculture in order to ensure adequate development of the sector.

This, he said, had not been met by the Federal Government despite the increase in allocation to agriculture in the 2018 Appropriation Bill.

Ijewere said, “It is true that the budget for agriculture was increased from N75bn in 2017 to N118.9bn in 2018, but under the Maputo Agreement, which Nigeria signed, every African country undertook and made a promise that the minimum budgetary allocation to agriculture would be 10 per cent of the entire budget for that specific period. Nigeria has never got there.

“In the 2017 budget, it was only 1.6 per cent. The N118.9bn that we have now in the 2018 budget of over N8tn is still a very far cry from what Nigeria appended its signature to, which is the Maputo Agreement that specifies 10 per cent of the total budget.”

He added, “Nigeria has said repeatedly that agriculture is the way to go and the vast majority of about 50 to 60 per cent of all the work that Nigerians do is in the agricultural industry. But the poorest of our people are in the agricultural industry.

“It is also important to note that despite all the claims by government that it wants to create jobs, it allocated such a little amount to agriculture without considering the Maputo Agreement.”

Ijewere noted that the increase was not impressive as more efforts were needed to diversify the economy, particularly through agriculture.

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.

Economy

FIRS Sets N5.9 Trillion Revenue Target for 2021

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FIRS to Generate N5.9 Trillion Revenue  in 2021

Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.

Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.

According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.

However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.

He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.

Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.

“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.

 

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Economy

Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom

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The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.

Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.

The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.

The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).

Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.

“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.

The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.

The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.

This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.

The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.

Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.

Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.

OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.

The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.

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Economy

ICPC Says Nigeria Loses $10bn to Illicit Financial Flows 

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The Independent Corrupt Practices and Other Related Offences Commission (ICPC) says Nigeria accounts for 20 per cent or 10 billion dollars (N3.8 trillion) of the estimated 50 billion dollars that Africa loses to Illicit Financial Flows (IFFs).

Chairman of ICPC, Prof. Bolaji Owasanoye, said this during a virtual meeting to review a report on IFFs in relation to tax, Mrs Azuka Ogugua, spokesperson for ICPC, said in a statement released in Abuja on Friday.

The ICPC Chairman said, “the African Union Illicit Financial Flow Report estimated that Africa is losing nearly 50 billion dollars through profit shifting by multinational corporations and about 20 per cent of this figure is from Nigeria alone.”

The ICPC boss explained that taxes played “very strategic role in the nation’s political economy.”

He said the objective of the meeting was to improve on the awareness on IFFs, especially in the areas of taxation.

The ICPC boss added that the meeting would give participants the opportunity to openly discuss how to effectively use the instrumentality of taxation to curb IFFs through risk-based approach.

“Risk-based approach, that is: monitoring and audit; due process in tax collection; structured tax amnesty framework skewed in public interest; data privacy; timely resolution of audits and payment of tax refunds and intelligence sharing among revenue generating, regulatory and law enforcement agencies,” he said.

Owasanoye also stated that for the contemporary tax man to remain relevant, he must build his capacity in areas of technology management, solution architects and an astute relationship manager.

The Executive Chairman of Federal Inland Revenue Service (FIRS) Mr Muhammad Nani, expressed concerns that IFFs posed a serious threat to the Nigerian economy as the act robbed the nation of resources that were needed for development.

Nani declared that tackling IFFs would expand the country’s tax base and improve revenue generation, which was required for development.

He consequently pushed for policy reforms that would make it difficult for “capital flights” from occurring so that the country would be placed on the path of growth.

Other discussants at the event identified weak regulatory framework, opacity of financial system and lack of capacity amongst others as some of the factors that fuelled IFFs.

The discussants emphasised the need for capacity building of relevant stakeholders as one of the ways to stamp out illicit financial flows.

They commended ICPC for leveraging its corruption prevention mandate to open a new vista in IFFs discourse in Nigeria. (NAN)

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