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Analysts Seek Strict Implementation as N’Assembly Passes 2019 Budget



  • Analysts Seek Strict Implementation as N’Assembly Passes 2019 Budget

The National Assembly yesterday passed the 2019 budget after jerking it up by N90 billion from N8.83 trillion to N8.91 trillion.

The passage of the appropriation bill is coming more than four months after the budget estimate was presented to the joint sitting of the National Assembly by President Muhammadu Buhari last December.

However, beyond the passage of the 2019 Appropriation Bill into law by the National Assembly, some economists and operators have, in separate interviews, called for strict implementation of the budget.

The analysts have also stressed the need for the federal government to return to the January- December budget cycle.

A former Director General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, on his part, called for closed monitoring of the budget implementation when signed into law by the president.

Ekpo said: “The problem with Nigeria is that we just allocate money, we don’t monitor the outcome. The main thing is to get the result of what you are putting money into.

“So, allocation is no longer the issue, but budget implementation. For example, if, last year, money was allocated for security, how was it implemented? What did they buy for security? Was it properly utilised?

“Again, we are in the fifth month, and we are still talking about the 2019 budget. A budget is supposed to be a tool for macro stability. Once it is delayed for five months, it creates a lot of distortions in the economy. So, going forward, we need to return to the December-January budget cycle.”

The Director General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, described the passage of the budget by the lawmakers as a welcome development.

He said: “We only hope that the president can quickly assent to it so that implementation can start in earnest.

“We hope that there is no major discrepancy between what was submitted and what was passed by the lawmakers, because over the years that has always been the bone of contention and has always delayed the signing of the budget.

“Going forward, as we move to the next phase of this administration, we should endeavour to return to the December-January budget cycle.”

His counterpart at the Nigeria Employers’ Consultative Assembly, Mr. Timothy Olawale, regretted the avoidable delays, which had become traditional with very serious adverse implications for the economy.

“We hope the executive and legislative arms will bury their differences and work together for the good of the nation and the people they have agreed to serve,” he said.

An analyst at Ecobank Nigeria, Mr. Kunle Ezun, said he anticipated that the lawmakers would have raised the budget to N10 trillion, considering the new minimum wage.

He explained: “The budget, as it is presently, is not enough to stimulate economic growth in Nigeria. An economy of over $500 billion, with a population that has a three per cent growth rate, you can’t be having budget of this size.

“I am sure that in the life of this budget, a supplementary budget would be submitted before the end of the year. We expect the government to increase spending this year if it is to achieve its three per cent GDP projection and to achieve that, they would need to spend more.”

N’Assembly Increases Budget by N90bn

Meanwhile, the National Assembly yesterday passed the 2019 budget after jerking it up by N90 billion from the N8.83 trillion budget size presented by President Buhari to N8.91trillion.

The breakdown of the N90 billion added to the budget include N23.67 billion earmarked as severance gratuity for outgoing legislators and their aides and induction of new legislators; N10 billion added as federal government intervention for tackling humanitarian crisis in Zamfara State, and additional N66 billion for security agencies including Army, Navy, Air Force, and the Police to tackle insecurity and all forms of crimes in the country.

The budget reports were presented at yesterday’s plenary of the two chambers by the Chairman of Senate committee on Appropriation, Senator Danjuma Goje (Gombe Central), and his counterpart in the House of Representatives, Hon. Mustapha Dawaki, before the two chambers dissolved into their respective Committees on Supply to consider the clause-by- clause report of the budget.
Presenting the budget report earlier, Goje explained that the N23.678 billion severance package for outgoing legislators also included induction programme and inauguration of the ninth assembly.

He added that in implementing the just approved N30,000 minimum wage for public servants, the N160 billion proposed as service-wide votes was appropriated for, under the public service wage adjustment for Ministries, Departments and Agencies (MDAs).

All the parameters upon which the budget estimates were based by the executive were retained by both Senate and House of Representatives.

The parameters are $60 per barrel oil price benchmark, 2.3 million barrel per day production level, N350 to one US dollar as exchange rate.

Major highlights of the N8.916 trillion budget passed by the National Assembly are N502.058 billion for Statutory Transfers; N500 billion for Special Intervention and N4.055 trillion for recurrent expenditure.

Others are N2.094 trillion for capital expenditure, N1.908 trillion as fiscal deficit within the ambit of 1.37 per cent deficit to GDP (Gross Domestic Product).

Within the service wide votes allocation in the approved budget, N5 billion is earmarked for payment of outstanding death benefit to civil servants and police personnel, N15 billion as additional support for universities and N65 billion for Presidential Amnesty Programme on reintegration of transformed ex- militants.

Within the capital expenditure component of the budget, N394.906 billion is earmarked for the Federal Ministry of Power, Works and Housing, N107.218 billion for the Ministry of Agriculture and Rural Development, N159.125 billion for Ministry of Defence and N92.178 billion for Ministry of Water Resources.

Others are N58.689 billion for Ministry of Education, N179.384 billion for Ministry of Transportation, N53.678 billion for Ministry of Interior and others.

However, in the recurrent expenditure component of the budget, the Ministry of Interior has the highest appropriated votes of N564.222 billion, followed by Ministry of Education with N463.395 billion.

Others include N502, 058,892,965 set aside for statutory transfers, N2,254,014,113,092 for debt servicing, N4,055,940,383,684 for recurrent (non-debt) expenditure, while N2,094,950,709,632 was earmarked as contribution to the development fund for capital expenditure for the year ending December 31, 2019.

Under the statutory transfers, the National Judicial Council (NJC) got N110,000,000,000; Niger Delta Development Commission (N100,188,921,129); Universal Basic Education (N112,471,421,836); National Assembly (N128,000,000,000); Public Complaint Commission (4,398,550,000,000); INEC (N45,500,000,000); National Human Rights Commission (N1,500,000,000); Independent Corrupt Practices and Related Offences (N5,380,108,639); Ministry of Niger Delta Affairs (N2,199,690,571); and Federal Ministry of Youth and Sports Development (N122,668,019,823).

Other statutory transfers are: Federal Ministry of Women Affairs (N1,521,618,086); Federal Ministry of Education (N463,395,832,111); Federal Ministry of Health (N315,717,344, 56); Federal Ministry of Environment (N18,774,175,241); and National Population Commission (N6,013,849,931).
Speaking after the Appropriation Bill passed third reading, Senate President, Dr. Bukola Saraki, said: “With passage of this bill for third reading today, the executive must ensure full implementation of the budget, sector by sector for the benefit and well- being of Nigerians.

In a related development, the House of Representatives at plenary also yesterday appropriated N8,916,964,099,373 for the 2019 fiscal year.
This followed the consideration of the report of the Hon. Mustapha Bala Dawaki-led Committee on Appropriation Bill for an Act to authorise the issue from the Consolidated Revenue Fund of the Federation the total sum of N8.916 trillion.

Briefing journalists about the processes that led to the conclusion of the budget, Dawaki said: “The budget has been passed by both chambers. Today, we are happy that the National Assembly has passed the budget at the end of April – on April 30, 2019. I believe that by Thursday it will be transmitted to the president for assent.

“The proposal that was laid before the National Assembly; there are two components of the budget, the exchange rate and crude oil production. All these items, the way they were presented by the President, the National Assembly sustained them. The crude oil production (output) was 2.3 million barrels per day and the exchange rate was N305 to a dollar. The benchmark was $60 per barrel. The National Assembly sustained all these; we did not change anything in the executive proposal.

“The only area that is affected is the area of deficit; the deficit sent to us was N1.906 trillion. There was an increment of N53 billion. The reason is that there were so many outstanding items that were not captured in the 2019 budget proposal. One, there was a resolution by the Senate that urged the federal government’s intervention in the security situation in Zamfara, to which N10 billion was proposed. We had to make that available in the capital supplementation under the Service Wide Vote.

“There is also a severance benefit of the outgoing legislators and legislative aides, which was not captured in the 2019 proposal. These benefits and expenses always happen in the transition year; that is, the fourth year when legislators are exiting and new ones are coming. We had to make a provision for that, which amounted to N24.6 billion. There is also salary arrears of legislative aides that have not been paid for the period of four years, for which N3 billion was provided.

“There is also an addition to the security agencies generally because of what is happening in Nigeria regarding the security situation. We still believe that providing more fund for them – it can never be enough – will make them to discharge their constitutional responsibilities diligently; and the various allowances to take care of their personnel. These are the areas where the National Assembly intervened.”

Bothered by the quantum of money allocated to the office of the National Security Adviser as against what came to sections of the National Assembly, Kano lawmaker, Hon. Damburam Nuhu, on his part, said it is important for Nigerians to note that one office got as much as N86 billion.

“My worry is, we are passing a budget of N86.8 billion for the office of the National Security Adviser alone and the entire budget of the National Assembly N128 billion. This comprises the recurrent plus the capital and everything, which is not only for legislators; it is also for the commission and all other aides and co.

“The people of the country need to know that if a single agency like the National Security Adviser’s office will be taking N86bn, then there is cause for worry; when people say perhaps we are taking too much in this place; that is why I am raising this observation for everybody to know,” he stated.

Other caveats in the budget include: “The department of government charged with the responsibility of certifying that due process have been complied with in the processing of implementation of projects shall ensure that all processes of approval are completed within the specified period as provided for in the Public Procurement Act.

“All accounting officers of Ministries, Parastatals and Departments of government, who control heads of expenditure, shall upon the coming into effect of this bill, furnish the National Assembly on quarterly basis, with detailed information on the Internally Generated Revenue (IGR) of the agency in any form whatsoever.

“All accounting officers of ministries, parastatals and departments of government, who control heads of expenditure, shall upon the coming into effect of this bill, furnish the National Assembly on quarterly basis, with detailed information on all foreign and domestic assistance received from any agency, persons or organisation in any form whatsoever. For the purpose of this bill the term ‘schedule’ includes the detailed estimates of expenditure.”

The House of Representatives also noted: “In line with the provisions of Section 318 of the constitution of the Federal Republic of Nigeria, 1999, as amended, this bill will run for a course of 12 months starting from the date it is assented into law.

President Buhari had on Wednesday, December 19, 2018 unveiled a federal budget proposal of N8.83 trillion for the 2019 fiscal year.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial market.

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Nigeria’s Main Refineries Record N406.62bn Loss in Two Years



modular refinery

Port Harcourt, Kaduna, Warri Refinery posts N406.62bn Deficit in Two Years

Nigeria’s three main refineries recorded N406.62 billion loss in two years, according to the audited financial statements from the Nigerian National Petroleum Corporation (NNPC).

The three refineries located in Port Harcourt, Kaduna and Warri have a combined installed capacity of 445,000 barrels per day, however, the refineries have continued to function below the installed capacity.

The audited report showed the Kaduna refinery posted N64.34 billion loss in 2018, better than the N111.89 billion loss reported in 2017.

While Warri refinery filed N44.44 billion loss for 2018, also better than the N81.60 billion loss posted in 2017.

Port Harcourt refinery reported N45.59 billion loss in 2018, down from N55.76 billion loss posted in 2017.

The Nigerian government has spent billions of US dollars in maintaining and trying to improve the dilapidated refineries over the years. However, because of the inability of the three refineries to meet daily petrol demands of the Nigerian people, the Federal Government resulted to importation that has eroded the nation’s foreign reserves.

A recent report from the NNPC showed that Nigeria spent N2.37 trillion on petrol importation between May 2019 and May 2020 despite the nation struggling with falling foreign reserves due to low oil prices.

The weak foreign reserves has disrupted the nation’s economic outlook and weighed on the Nigerian Naira. The Naira has been devalued by 15 percent this year and was recently adjusted from N360 per US dollar exchange rate to N380/US$ for importers and investors to ease pressure on the nation’s foreign reserves.

Last week, at a summit organised by Seplat, Mallam Mele Kyari, the Group Managing Director, NNPC, said the three refineries were all idle despite the money being spent on them.

In Nigeria today, we are importing practically every petroleum product that we consume in this country.

“We are working to make sure that we are able to fix our refineries,” Kyari stated.

All hopes are now on Dangote’s refinery.

Aliko Dangote, Africa’s richest man and the world’s richest black man, is presently constructing a 650,000 barrels per day refinery.

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Osinbajo Says FG Plans to Create 5 Million Jobs



Buhari and Osinbajo

FG to Create 5m Jobs from Strategic Investments in Manufacturing, Agriculture

Vice President, Prof. Yemi Osinbajo, has said the Federal Government plans to create at least 5 million jobs in the next few years.

Osinbajo, who spoke at the Virtual Presidential Policy Dialogue Session organised by the Lagos Chamber of Commerce and Industry (LCCI), said the Buhari-led administration is focused on job creation.

He, therefore, stated that this would be achieved with strategic investments in key sectors like the manufacturing and agriculture sectors.

The Vice President said, “We are to create jobs and boost our national housing programme. We would be intentional in the support of manufacturers in using our local raw materials. We are seriously engaging the use of cement in building our roads, as it will be cheaper for us and more durable.

“We are targeting electrification of five million households with solar power, and we are supporting SMEs, especially in the pharmaceuticals to enhance the production of personal protective equipment.”

Mrs. Toki Mabogunje, the President of LCCI, who also spoke at the event, expressed concerns over the failure of the Nigerian Customs Service to adhere to the Executive Order which forbids Customs checkpoints around the ports and within given geographical delimitations in the country.

She also noted the slow pace of reforms in the oil and gas sector, one of the nation’s main sectors. According to her, the oil and gas sector was another cause for worry, saying up till now the PIB passed has not been signed by President Muhammadu Buhari.

According to her, “Closure of the land borders has enormous implications for cross border economic activities around the country. The indications are now that the closure is indefinite. While we share the concern of government on issues of security and smuggling, we believe that the indefinite closure of land borders is not the solution to the problem.

“We are excited about the signing of the AFCTA. But we need to get ourselves ready for the pressure of competition inherent in the continental economic integration agenda. A number of commitments were made about the creation of an environment that would enable the private sector to be competition ready. But not much has happened in this regard so far.

“We are aware of the efforts of government to fix our infrastructure, including roads and railways, but funding has remained a major challenge. We would like to see a new funding model with much bigger focus on private sector capital within a Public Private Partnership [PPP] framework for infrastructure development in the country.

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Fuel Scarcity: NUPENG to Commence Strike on Monday



Petrol Importation

Lagosians Should Brace for Fuel Scarcity as NUPENG Embarks on Strike

Nigerians should brace for fuel scarcity as the national leadership of the Nigeria Union of Petroleum and Natural Gas (NUPENG) directed all petroleum tanker drivers to withdraw their services from Lagos State starting from Monday, 10 August 2020.

In a statement released by NUPENG on Friday, the union said the directive followed the failure of various authorities in Lagos State to address three major issues that had impacted the operations of petroleum tanker drivers in the state for several months.

The statement signed by the National President, Williams Akporeha and the General Secretary, Olawale Afolabi, NUPENG and titled title ‘NUPENG leadership directs withdrawal of services by petroleum tanker drivers in Lagos State with effect from Monday, August 10, 2020,’ noted that members of the union are frustrated and pained by the barrage of challenges faced while carrying out their activities in Lagos State.

NUPENG said, “The entire rank and file members of the union are deeply pained, frustrated and agonised by the barrage of these challenges being consistently faced by petroleum tanker drivers in Lagos State and are left with no other option but to direct the withdrawal of their services in Lagos State until the Lagos State Government and other relevant stakeholders address these critical challenges.

“It is sad and disheartening to note here that we had made several appeals and reports to the Lagos State Government and the Presidential Task Force for the decongestion of Apapa on these challenges but all to no avail.

NUPENG listed the major challenges faced by petroleum tanker drivers in Lagos State as extortion and harassment by various security agents and, area boys’ (miscreants).

This menace must stop and the leadership of these security operatives in Lagos State must go all out to call their men to order with immediate effect.

The Union added that it is sad that the security agents who were expected to ensure the free flow of traffic and protection of road users were the same people using their uniforms and arms to intimidate, harass and extort money from petroleum drivers in Lagos State.

Therefore, it said it had embarked on an indefinite strike to force the Lagos State Government to address the situation.

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