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2018 Budget Contains N460bn Wasteful Expenditure – Group

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Economy
  • 2018 Budget Contains N460bn Wasteful Expenditure – Group

The Centre for Social Justice on Tuesday picked holes in the 2018 budget proposals presented by President Muhammadu Buhari to the National Assembly, stating that the fiscal document contained over N460bn “frivolous, inappropriate, unclear and wasteful” expenditure.

The group stated this in a report made available to our correspondent by its Lead Facilitator, Mr. Eze Onyekpere.

The group analysed the 2018 budget of N8.6tn, which is currently before the National Assembly.

The group called on the lawmakers to critically review the fiscal document in order to remove all the expenditure that would not impact positively on the lives of the people.

It recommended that many expenditure in the budget should be slashed, adding that this would save the country about N219.3bn.

The report read in part, “The Centre for Social Justice and its partners in the Citizens Wealth Platform have identified frivolous, inappropriate, unclear and wasteful expenditure in the federal Appropriation Bill. The documentation is sent to every member of the National Assembly to assist the passage of the annual budget.

“The term frivolous implies not having any serious purpose or value as some of the expenditure proposals cannot be supported by any high level national plan or policy. They ignore the pressing problems and challenges, while providing for the fancy, whims and caprices of the budget crafters.

“A total of N219.37bn has been identified as resources to be saved and reprogrammed by the National Assembly. We hope that the National Assembly will do the needful for the common good.”

It claimed that it had become a tradition among Ministries, Departments and Agencies of government to allocate huge sums of money for expenditure items that were unclear in the budget.

Some of them are purchase of motor vehicles, software, computers, uniforms and clothing, refreshment and meals, monitoring and evaluation, as well as welfare packages.

Others are maintenance of office buildings/residential quarters, budget preparation expenses, residential rents, and capacity building, among others.

Giving a breakdown of some of the expenses that made up the unclear expenditure, the report stated that in the State House for instance, the sum of N907.1m, which was allocated for phased replacement of vehicle spare parts and tyres, was bogus and should be reduced by 50 per cent to N453.55m.

It added that the N4.86bn that was budgeted for annual routine maintenance of the Villa should be reduced by 80 per cent to N972m.

The CSJ said the reduction in the maintenance cost of the Villa by 80 per cent would result into a saving of N3.88bn that could be channelled into other developmental projects.

It added, “Annual routine maintenance cannot cost so much. And there is a second sum for maintenance of office and residential quarters.

“Reduce the first and second votes by 80 per cent. There is a further sum of N92m for ‘other maintenance services’ after providing for vehicle, equipment, generator maintenance.”

The report also stated that the huge vote of N51.75bn for the Sustainable Development Goals called for vigilance and proper oversight on the part of the legislature after approval.

It noted that for over 13 years, this type of vote had been approved without Nigerians getting value and improvement in their lives for the large sums of money.

The report also cited the Federal Ministry of Agriculture and Rural Development, whose budget included several requests for money without specific details about what they were voted for.

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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