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PDP, LCCI React as Buhari Says 2019 Budget Faces Difficulties

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  • PDP, LCCI React as Buhari Says 2019 Budget Faces Difficulties

President Muhammadu Buhari said on Monday that the 2019 budget would be difficult to implement following the changes introduced to it by the National Assembly.

But the Peoples Democratic Party dismissed the President’s complaint, saying there was no way the National Assembly would return the budget to him the way it was brought to them.

The Lagos Chamber of Commerce and Industry, which noted that there had been complaints over the adjustment of budgets by the legislature over the years, said the judiciary should be allowed to determine whether lawmakers had the power to adjust the budget.

There were indications that Buhari might return the 2019 budget to the ninth National Assembly for a review as the tenure of the current legislature would expire on June 8.

The President signed the N8.92tn budget on Monday but quickly pointed out that the legislature increased his original proposal by N90.33bn from the N8.83tn estimates he laid before it in December 2018.

Speaking at the event, which was witnessed by the Speaker of the House of Representatives, Mr Yakubu Dogara, Buhari said his next line of action was to engage the National Assembly on how best to ensure a smooth implementation of the budget.

He also said his administration and the ninth National Assembly would work more closely to return the country to the January-December budget cycle.

The President said, “You will all recall that in December 2018, I presented our 2019 budget proposal with the theme ‘Budget of continuity.’ Our goal was to use this budget to move the economy further on the path of inclusive, diversified and sustainable growth.

“Back then, I proposed a total expenditure of N8.83tn to the National Assembly for appropriation, targeting strategic and impactful projects and initiatives. However, the 2019 budget I will be signing into law today (Monday) provides for the aggregate expenditure of N8.92tn. This is an increase of N90.33bn over our submission.

“This increase reflects changes introduced by the National Assembly. In some areas, expenses we proposed were reduced while in other areas, they were increased. There were also certain areas where new additions were introduced into the budget. More details of the approved budget will be provided by the Minister of Budget and National Planning.”

Buhari said some of the changes would adversely impact his government’s programmes, making it difficult to achieve the objectives of the Economic Recovery and Growth Plan.

He said, “Although I will be signing this bill, it is my intention to continue to engage the National Assembly to ensure we deliver on our promises. I will, therefore, be engaging with the leadership of the ninth National Assembly, as soon as they emerge, to address some of our concerns with this budget.

“We will also look at how to improve the budget process, so that, amongst other things, we can speed up budget consideration processes and return the country to the January-December fiscal year timetable.”

It should be recalled that Buhari made a similar complaint about the 2018 budget, bordering on “insertions” he said were not in the original executive proposals.

The dispute delayed the implementation of the budget as both the executive and the legislature argued over which of the two arms had the power of appropriation under the 1999 Constitution (as amended).

The disagreement petered out after the President forwarded a series of supplementary proposals to the National Assembly to address the gaps he said the legislature created in the budget.

However, at the signing ceremony for this year’s budget on Monday, Dogara responded to the President’s complaints, insisting that the legislature was not expected to just stamp the executive proposals for presidential assent.

The Speaker argued that merely approving the executive proposals without alterations by the National Assembly would have eroded the relevance of the legislature in a democracy and the principle of checks and balances.

He said, “The issues raised (by the President) relate to certain reductions that were made in the budget and some sub-head increases that were made and that such reductions would make it a bit difficult for some of those projects to be implemented.

“But he said it is an ongoing process and he will have discussions with the leadership of the National Assembly to see what they will be able to do in order to put that behind them and then execute whatever critical projects that suffered some form of hurt in the process of passing the project in the National Assembly.”

Specifically, on the cuts and increases made by the National Assembly, Dogara said, “By the constitution and design, the executive informs us what they intend to do and the representatives of the people in the National Assembly decide what is a priority since they represent the people. It is going to be a knotty area but we will continue to define the relationship between the executive and the legislature.

“Whether it is Britain or the US, wherever it is, there is always a strained relationship on this issue of budget. That is because it deals with high-stake distributional issues as to who gets what, which part of Nigeria gets this and that; so it will continually be an issue.

“We should not be defined by those issues, rather we should define those issues by forming a consensus that is the part to progress and we will continue to do that.”

The Speaker also reacted to Buhari’s desire to return the budget cycle to January-December, as against the current June-May.

He said, “I think that can really be achieved, but it must start with the early and timely submission of the budget to the National Assembly from the executive. A situation where the budget is submitted in December, even if you shut down the entire National Assembly, we will not be able to achieve the January deadline. So going forward, this is a collective exercise between the executive and the legislature.

“In most cases, it is the National Assembly that decides how federally-generated receipts should be expended and the National Assembly took that decision and we are glad that the President has signed it into law.”

The President of the Senate, Bukola Saraki, arrived at the Presidential Villa, just as the signing of the Appropriation Bill ended.

His Special Adviser on Media and Publicity, Mr Yusuf Olaniyonu, told State House correspondents that Saraki was in Port Harcourt, Rivers State, attending another official function when the invitation for the budget event reached his residence on Sunday night in Abuja.

The main opposition party, PDP, said it was not surprised with the claim by the President that it would be difficult for him to implement the budget.

The former ruling party reminded the President that there had been no time from 1999 till date when budgets presented to the National Assembly were returned to the executive the way they were brought to the legislature.

The National Chairman, PDP, Prince Uche Secondus, who spoke with one of our correspondents, said that the way the President had been blaming others for his failure to fix the country, he would soon blame the person in charge of the country between 2015 and 2019 after “he is sworn in on May 29.”

He said, “Go and look at the history of budgets in the country, and even in all the states, legislators always tinker with budgets. It is within their powers to make adjustments where necessary and all that. They were elected to represent constituents, and they have to protect the interests of their people as well.”

The Director-General, LCCI, Mr Muda Yusuf, said it was a good decision by the President to sign the budget since he had spoken about presenting a supplementary budget to the National Assembly.

He said, “It is a good thing that the President has decided to sign the budget so that the implementation can commence because enough time has been lost already.

“Later, this issue needs to be taken to court so that the judiciary can make a pronouncement whether the National Assembly has the power to cut or increase the budget or not. This has been going on every budget year and the court needs to decide what should be done.”

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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Nigeria’s N3.3tn Power Sector Rescue Package Unveiled

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President Bola Tinubu has given the green light for a comprehensive N3.3 trillion rescue package.

This ambitious initiative seeks to tackle the country’s mounting power sector debts, which have long hindered the efficiency and reliability of electricity supply across the nation.

The unveiling of this rescue package represents a pivotal moment in Nigeria’s quest for a sustainable energy future. With power outages being a recurring nightmare for both businesses and households, the need for decisive action has never been more urgent.

At the heart of the rescue package are measures aimed at settling the staggering debts accumulated within the power sector. President Tinubu has approved a phased approach to debt repayment, encompassing cash injections and promissory notes.

This strategic allocation of funds aims to provide immediate relief to power-generating companies (Gencos) and gas suppliers, while also ensuring long-term financial stability within the sector.

Chief Adebayo Adelabu, the Minister of Power, revealed details of the rescue package at the 8th Africa Energy Marketplace held in Abuja.

Speaking at the event themed, “Towards Nigeria’s Sustainable Energy Future,” Adelabu emphasized the government’s commitment to eliminating bottlenecks and fostering policy coherence within the power sector.

One of the key highlights of the rescue package is the allocation of funds from the Gas Stabilisation Fund to settle outstanding debts owed to gas suppliers.

This critical step not only addresses the immediate liquidity concerns of gas companies but also paves the way for enhanced cooperation between gas suppliers and power generators.

Furthermore, the rescue package includes provisions for addressing the legacy debts owed to power-generating companies.

By utilizing future royalties and income streams from the gas sub-sector, the government aims to provide a sustainable solution that incentivizes investment in power generation capacity.

The announcement of the N3.3 trillion rescue package comes amidst ongoing efforts to revitalize Nigeria’s power sector.

Recent initiatives, including tariff adjustments and regulatory reforms, underscore the government’s determination to overcome longstanding challenges and enhance the sector’s effectiveness.

However, challenges persist, as highlighted by Barth Nnaji, a former Minister of Power, who emphasized the need for a robust transmission network to support increased power generation.

Nnaji’s advocacy for a super grid underscores the importance of infrastructure development in ensuring the reliability and stability of Nigeria’s power supply.

In light of these developments, stakeholders have welcomed the unveiling of the N3.3 trillion rescue package as a decisive step towards transforming Nigeria’s power sector.

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Nigeria’s Inflation Climbs to 28-Year High at 33.69% in April

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Nigeria's Inflation Rate - Investors King

Nigeria is grappling with soaring inflation as data from the statistics agency revealed that the country’s headline inflation surged to a new 28-year high in April.

The consumer price index, which measures the inflation rate, rose to 33.69% year-on-year, up from 33.20% in March.

This surge in inflation comes amid a series of economic challenges, including subsidy cuts on petrol and electricity and twice devaluing the local naira currency by the administration of President Bola Tinubu.

The sharp rise in inflation has been a pressing concern for policymakers, leading the central bank to take measures to address the growing price pressures.

The central bank has raised interest rates twice this year, including its largest hike in around 17 years, in an attempt to contain inflationary pressures.

Governor of the Central Bank of Nigeria has indicated that interest rates will remain high for as long as necessary to bring down inflation.

The bank is set to hold another rate-setting meeting next week to review its policy stance.

A report by the National Bureau of Statistics highlighted that the food and non-alcoholic beverages category continued to be the biggest contributor to inflation in April.

Food inflation, which accounts for the bulk of the inflation basket, rose to 40.53% in annual terms, up from 40.01% in March.

In response to the economic challenges posed by soaring inflation, President Tinubu’s administration has announced a salary hike of up to 35% for civil servants to ease the pressure on government workers.

Also, to support vulnerable households, the government has restarted a direct cash transfer program and distributed at least 42,000 tons of grains such as corn and millet.

The rising inflation rate presents significant challenges for Nigeria’s economy, impacting the purchasing power of consumers and adding strains to household budgets.

As the government continues to grapple with inflationary pressures, policymakers are faced with the task of implementing measures to stabilize prices and mitigate the adverse effects on the economy and livelihoods of citizens.

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FG Acknowledges Labour’s Protest, Assures Continued Dialogue

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Power - Investors King

The Federal Government through the Ministry of Power has acknowledged the organised Labour request for a reduction in electric tariff.

The Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) had picketed offices of the National Electricity Regulatory Commission (NERC) and Distribution Companies nationwide over the hike in electricity tariff.

The unions had described the upward review, demanding outright cancellation.

Addressing State House correspondents after the Federal Executive Council (FEC) meeting on Tuesday, Minister of Power, Adebayo Adelabu, said labour had the right to protest.

“We cannot stop them from organizing peaceful protest or laying down their demands. Let me make that clear. President Bola Tinubu’s administration is also a listening government.”

“We have heard their demands, we’re going to look at it, we’ll make further engagements and I believe we’re going to reach a peaceful resolution with the labor because no government can succeed without the cooperation, collaboration and partnership with the Labour unions. So we welcome the peaceful protest and I’m happy that it was not a violent protest. They’ve made their positions known and government has taken in their demands and we’re looking at it.

“But one thing that I want to state here is from the statistics of those affected by the hike in tariff, the people on the road yesterday, who embarked on the peaceful protests, more than 95% of them are not affected by the increase in the tariff of electricity. They still enjoy almost 70% government subsidy in the tariff they pay because the average costs of generating, transmitting and distributing electricity is not less than N180 today.

“A lot of them are paying below N60 so they still enjoy government’s subsidy. So when they say we should reverse the recently increased tariff, sincerely it’s not affecting them. That’s one position.

“My appeal again is that they should please not derail or distract our transformation plan for the industry. We have a clearly documented reform roadmap to take us to our desired destination, where we’re going to have reliable, functional, cost-effective and affordable electricity in Nigeria. It cannot be achieved overnight because this is a decay of almost 60 years, which we are trying to correct.”

He said there was the need for sacrifice from everybody, “from the government’s side, from the people’s side, from the private sector side. So we must bear this sacrifice for us to have a permanent gain”.

“I don’t want us to go back to the situation we were in February and March, where we had very low generation. We all felt the impact of this whereby electricity supply was very low and every household, every company, every institution, felt it. From the little reform that we’ve embarked upon since the beginning of April, we have seen the impact that electricity has improved and it can only get better.”

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