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Low Implementation of Capital Budget Ruffles Lawmakers

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  • Low Implementation of Capital Budget Ruffles Lawmakers

The low implementation of the capital component of the 2017 N7.441 trillion by the federal government is currently causing major unease among federal lawmakers amid fears that it may affect their bid for re-election into the National Assembly in the 2019 polls.

The constituency projects, also called zonal intervention projects, are contained in the N2.1 trillion capital component of the 2017 budget, out of which only N440 billion has been released.

The low release of funds has ensured that only high priority capital projects are currently receiving the attention of the government, causing a complete neglect of the constituency projects for which N100 billion was appropriated.

Investigation gathered that the executive has not released a kobo for any item listed under the constituency projects, even though some of the items have been listed in procurement adverts by several Ministries, Departments and Agencies (MDAs) of government.

The lawmakers are further ruffled by the recent push of the executive arm of government to restore the fiscal year from January to December to allow for an organic budget calendar, as this may further affect the performance of the 2017 budget.

While they generally accept that a predictable budget calendar ensures better economic planning particularly for the organised private sector which is dependent on public spending, the lawmakers fear that the proposal to roll over up to 60 per cent of capital projects would further affect the constituency projects.

At a recent hearing by the Senate on the performance of the 2017 budget, the Minister of Budget and National Planning, Senator Udo Udoma had told the Senate Joint Committee on Appropriations and Finance that MDAs have been instructed to roll over most of their capital projects, to the 2018 budget.

Investigation gathered that the lawmakers are highly concerned about the impact this would have on their re-election bid in the 2019 general elections.

A highly placed source said the decision to isolate the constituency project items under the N100 billion Zonal Intervention Funds, in a separate section from the statutory budget of the MDAs, was deliberate.

“Even if this has happened before now, the executive deliberately did it this time around because for them it is not priority. Despite any detente, the executive still considers the constituency projects a ploy to make money by the lawmakers. Remember the tensions caused by the constituency issue last year, at some point House members even said they would not entertain any request from the executive, until ZIFs (Zonal Intervention Funds) are released,” the source explain.

“2018 is just a few months away, and that is campaign year. 2019 is just the election year. If the projects are not done, it would affect the lawmakers. Many have promised their constituents that they would implement certain projects, and when such is not on ground during campaigns, they would not be able to point to what they have done, and why they should be re-elected,” the source said.

“The 2016 capital budget, N1.7 trillion was not fully implemented. Also, just about 80 per cent of the 2016 ZIF was released after intense negotiations. Obviously lawmakers who could not finish their constituency projects from that budget, would be relying on the current budget, and must have assured their people. Now no funds are being released under the 2017 budget, and it is obviously not a priority to the executive,” the source explained further.

The source disclosed that about 50 per cent of the ZIF could be released, but added that it would be hard for the lawmakers to get anymore than that in the current budget.

“It is not for nothing that the executive repeatedly says it is concentrating on priority projects, and these priority projects are in all the zones anyway,” the source said.
Lawmakers from the Senate and the House of Representatives who spoke off record expressed their displeasure at the development.

“We are the closest to our people, hence these projects. We promised our people, if we do not fulfill our promises, why would they re-elect us? Our constituents just want to see the boreholes, the primary health care centres, among others they would not understand the struggle here,” a lawmaker said.

Another lawmaker said it would be unfair to expect them to use their personal allowances for the constituency projects.

“Even our salaries are being delayed under this dispensation, and we get nothing extra. We cannot expend that on our constituencies. Admittedly, some of our colleagues use their personal funds for some things back home, particularly in places where the competition is stiffer. If you want to return, you cannot wait until the ZIF is released before fulfilling some of the promises to the constituents,” he said.

A House member further said that the hearing at the Senate was ‘closely monitored’ by the members of the green chambers who were happy with the resolutions.

“The resolution cautioned against selective implementation of the capital budget, which is where our projects are. That is our way of demanding of the implementation of the ZIF items” he said.

Reacting to the development, the Deputy Spokesman of the Senate, Senator Ben Murray Bruce expressed hope that the constituency projects would be funded, as they benefit the people more, not the lawmakers.

Speaking in a telephone interview, Ben Bruce said the project is for the people who get angry when they are not implemented as promised by “If you promised a link road that costs N20 million, and you do not have the link road, then people would be angry. If you promise a borehole because people have dirty water and they have monkeypox, because of the dirty water and dirty environment, and you cannot provide clean water, then they would be angry, because they put you into office and you cannot provide them clean water.”

“In a place like Bayelsa state which is riverine, no toilets anywhere, people use the bathroom (ease themselves in the waters) and drink it at the same time, are you surprised there is monkey pox? So something as simple as water, which does not benefit the senator or the House of Representatives, it benefits the poor man who needs clean water, and then you do not deliver, first you have sick people, you have an epidemic, you have angry people, people who cannot understand that in a modern economy, some people do not have clean water to drink, who do you blame?”

“Last year, my constituency project was providing solar power, so children can do their homework at night. This year, its agriculture (fish, corn, rice) , people have to feed. If I do these, how would that have a negative impact on the economy, and why would the government not fund such projects? None of the projects benefit me, they benefit the people who voted me into office. So constituency project is not a bad word, not a bad thing to do and i am glad we have it in the budget. I hope they fund it,” the Senator said.

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 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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Economy

Nigeria, China Collaborate to Bridge $18 Billion Trade Gap Through Agricultural Exports

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In a concerted effort to address the $18 billion trade deficit between Nigeria and China, both nations have embarked on a collaborative endeavor aimed at bolstering agricultural exports from Nigeria to China.

This strategic partnership, heralded as a landmark initiative in bilateral trade relations, seeks to narrow the trade gap and foster more balanced economic exchanges between the two countries.

The Executive Director of the Nigerian Export Promotion Council (NEPC), Nonye Ayeni, revealed this collaboration during a joint meeting between the Council and the Department of Commerce of Hunan province, China, held in Abuja on Monday.

Addressing the trade imbalance, Ayeni said collaborative efforts will help close the gap and stimulate more equitable trade relations between the two nations.

With Nigeria importing approximately $20.4 billion worth of goods from China, while its exports to China stood at around $2 billion, representing a $18 billion in trade deficit.

This significant imbalance has prompted officials from both countries to strategize on how to rebalance trade dynamics and promote mutually beneficial economic exchanges.

The collaborative effort between Nigeria and China focuses on leveraging the vast potential of Nigeria’s agricultural sector to expand export opportunities to the Chinese market.

Ayeni highlighted Nigeria’s abundant supply of over 1,000 exportable products, emphasizing the need to identify and promote the top 20 products with high demand in global markets, particularly in China.

“We have over 1,000 products in large quantities, and we expect that the collaboration will help us improve. The NEPC is focused on a 12-18 month target, focusing on the top 20 products based on global demand in the markets in which China is a top destination,” Ayeni explained, outlining the strategic objectives of the collaboration.

The initiative not only aims to reduce the trade deficit but also seeks to capitalize on China’s growing appetite for agricultural products. Nigeria, with its diverse agricultural landscape, sees an opportunity to expand its export market and capitalize on China’s increasing demand for agricultural imports.

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