Confusion in Senate over repayment of N23.7trn CBN loan

…As NASS passes 2023 Appropriation Bill, raises budget by N1.31trn

…Works & infrastructure, Defence, Education, Health get lion share

…Senate approves Buhari’s N819.5bn Supplementary Budget request for 2022

The review of the structure for the payment of N23.7 trillion loans obtained by the Federal Government via “Ways and Means” from the Central Bank of Nigeria (CBN) in the last 10 years, threw the Senate into confusion on Wednesday.

To avoid a row among lawmakers that may degenerate into chaos, the President of the Senate, Ahmad Lawan, forced the Senators on Wednesday to go into a closed door session to avoid fisticuffs.

“Ways and Means” are soft loans or advances by the Central Bank to the Federal Government to enable it cater for short term or emergency finance to fund delayed government expected cash receipt of fiscal deficits.

Argument ensued following presentation of a report by the Chairman, Senate Committee on Finance, Senator Olamilekan Adeola (APC, Lagos West) bordering on Ways and Means 2022, as requested by President Muhammadu Buhari last week.

Challenging the presentation, Senator Apiafi (PDP, Rivers West) raised a point of order, with an argument that President Buhari’s request was unconstitutional and a consideration of same by the Senate is strange to the Nigerian law.

The argument led the Senate into a rowdy session when the President of the Senate ruled her out of order on the grounds that the report should be presented and read by the committee chairman, upon which lawmakers can contribute to the debate.

Lawan’s ruling annoyed Senator Apiafi and some others, leading to a rowdy atmosphere at the Upper Chamber with arguments.

Following a point of order by Senator George Sekibo (PDP, Rivers East) calling on the President of the Senate to step down the consideration of the report until lawmakers have more details on what the funds were used for, the Senate, thereafter, went into a closed-door session.

Recall that President Buhari had, last week, written to the Senate, requesting the approval of restructuring of N23.7 trillion Ways and Means advances given to the Federal Government by the CBN.

The President in a letter read by the Senate President during plenary session on Wednesday 21st December, 2022,  explained that Ways and Means are advances from the Central Bank of Nigeria to the Federal Government for emergency funding of delayed receipt of fiscal deficit.

According to him, the Ways and Means balances as at 19th December 2022  was N22.7 trillion.

President Buhari had further stated in the letter that he has approved the securitisation of the Ways and Means balances along the following terms: Amount, N23.7 trillion; Tenure, 40 years; Moratorium on principal repayment, three years and Pricing interest rate 9 per cent.

…Senate approves Buhari’s N819.5bn Supplementary Budget request for 2022

President Buhari has recently made some stunning presentation to the National Assembly bordering on fiscal propositions.

Last week, Wednesday December 21, President Buhari had written the Senate, seeking the approval of a total sum of N819.5 billion supplementary budget for the 2022 fiscal year, a letter that was read by the President of the Senate, Senator Ahmad Lawan on the floor of the upper chamber barely 10 days to the end of 2022.

The sum, according to the President, is to address critical infrastructures, particularly those affected by flood across States of the Federation.

According to the letter, the money for the supplementary budget would be sourced through additional domestic borrowings.

The content of the letter explained the requested sum is meant for the capital expenditure component of the 2022 budget with an attendant increase of deficit to N8.17trillion.

The intended projects border around water supply, dam projects and irrigation projects nationwide, particularly those affected by flood incidents.

President Buhari added that the proposed N819.5 billion supplementary budget will be financed by additional domestic borrowings.

The letter read, “The year 2022 has witnessed the worst flood incident in recent history which has caused massive destruction of farmlands at a point already closed to harvest season.

“This may compound the situation of food security and nutrition in the country. The flood has also devastated road infrastructure in across the 36 states and the FCT as well as bridges nationwide that are critical for the movement of goods and services.

“The water sector was equally affected by the flood and there is a need to complete some ongoing critical projects that have already achieved about 85 per cent completion.

“The nine critical projects proposed in the sector cut across water supply, dam projects and irrigation projects nationwide.

“I have approved a supplementary budget of 2022 appropriation of N819.536 Billion, all of which are capital expenditures.

“The supplementary will be financed through additional domestic borrowings which will raise the budget  deficit for 2022 to N8.17 trillion and deficit to GDP ratio to 4.43 per cent.”

The letter of President Buhari’s supplementary budget proposal was read separately by the President of the Senate, Senator Ahmad Lawan and the Speaker, House of Representatives, Femi Gbajabiamila,  just as it was explained that the money is meant for the capital expenditure component of the 2022 budget with attendant increase of deficit to N8.17trillion.

With the urgency of the matter, the President of the Senate hurriedly forwarded it to the Senate Committees on Appropriations, Finance, Works, Water Resources and Agriculture for expeditious consideration.

The Upper Chamber on Wednesday, barely a week after the letter was read on the floor of the house, approved the request of President Buhari to raise the total sum of  N819.536,937,815 billion supplementary budget for the 2022  fiscal year to address various infrastructure that were destroyed by flood across the various states of the country.

The breakdown of the approved N819.536,937,815 billion shows that the Federal Ministry of Agriculture and Rural Development is allocated N69,247, 175,770; Federal Ministry of Works and Housing got N704,789,043; Federal Capital Territory, FCT, N30,000,000,000 and the Federal Ministry of Water Resources is N15,500,000,000.

The approval on Wednesday, was sequel to the presentation and consideration of a report of the Senate Joint Committee on the 2022 Supplementary Appropriations  Bill, 2022 (SB.1091) by the Chairman, Senator Jibrin Barau, APC, Kano North.

Barau said, “The Appropriations Committee having considered the detailed provisions of the Bill, the contributions of its Sub-Committees and the general impact it will make in ameliorating the havoc caused by flood across the country and recommended the following for the various MDAs

“i. Federal Ministry of Agriculture and Rural Development; ii. Federal Ministry of Works and Housing; iii. Federal Capital Territory; iv. Federal Ministry of Water Resources.

“The Committee hereby recommends that the Senate do consider and approve: A Bill for an Act to authorise the issue from the Consolidated Revenue Fund (CFR) the total sum of N819,536,937,813 (Eight Hundred and Nineteen Billion, Five Hundred and Thirty-Six Million, Nine Hundred and Thirty-Seven Thousand, Eight Hundred and Thirteen Naira), only.

“i Federal Ministry of Agriculture and Rural Development – N69,247,175,770; ii. Federal Ministry of Works and Housing – N704,789,762,043; iii. Federal Capital Territory – N30,000,000,000; iv. Federal Ministry of Water Resources – N15,500,000,000.”

In the report, Senator Barau said, “The Committee observed as follows: The effects of the 2022 flood across the country and its attendant consequences on our roads, bridges, farmlands and the water sector necessitated the Supplementary Appropriation Bill request.

“MDAs involved in the Supplementary Appropriation Bill requests are: Federal Ministry of Agriculture and Rural Development; Federal Ministry of Works and Housing; Federal Ministry of water Resources.”

…NASS passes 2023 Appropriation Bill, raises budget by N1.31 trn

Meanwhile, the National Assembly (NASS) on Wednesday, passed the 2023 Appropriation Bill to the tune of N21,827,188,747,391 for the fiscal year.

However, while many have lamented the huge deficit of the fiscal document when presented an Appropriation Bill, the National Assembly, in the bill passed, jerked the budget up by N1.31 trillion – an upward review from the initial proposed N20.1trillion to N21.8 trillion.

Recall that President Muhammadu Buhari had on Friday, October 7th 2022 proposed and laid a N20.51 trillion Appropriation Bill for consideration by both the lower and upper chambers of the National Assembly.

The passage of the Appropriation Bill was sequel to the consideration and approval of the report of the Senator Jibrin Barau, APC, Kano North led Senate Committee on Appropriations and the House Committee on Appropriation presented by the Chairman, Hon. Aliyu Betara.

The Appropriation Bill was after the clause by clause consideration of the report as it was then read the third time and passed after the Senate and House of Representatives went into the Committee of Supply.

The breakdown shows that of the total sum, N967.48 billion was earmarked for Statutory Transfers, N6.55 trillion was for debt servicing; N8.32 trillion was for recurrent (non-debt) expenditure, while the sum of N5.97 trillion was for capital expenditure for the year ending 31st day of December, 2023.

The Benchmark Price of Crude Oil is pegged at $75 USD Per Barrel; Crude Oil Production at 1.69 mbpd; Exchange Rate at N435 57/ US$;  Gross Domestic Production (GDP) Growth Rate at 3.75percent and Inflation Rate at 17.16 per cent.

In the passed budget, from the statutory transfers, the National Judicial Council takes N165 billion; Niger-Delta Development Commission gets N119.93 billion, Universal Basic Education N103.28 billion; Independent National Electoral Commission (INEC) N173.63 billion; National Human Right Commission N4.5 billion; North East Development Commission, N59.03 billion; Basic Health Care Fund, N51.64 billion and National Agency for Science and Engineering Infrastructure (NASENI), N51.64 billion.

Also under the Statutory Transfers, the National Assembly Severance/Inauguration of outgoing and incoming 9th and 10th Assembly (Legislators and Legislative Aides) is allocated N30.17 billion, National Assembly Office gulps N30.49 billion; Senate N33.26 billion, House of Representatives, N51.99 billion; National Assembly Service Commission, N10.55 billion; National Institute for Legislative and Democratic Studies (NILDS), N7.41billion and Service Wide Vote, N671.3 million.

Further breakdown shows that Office of Retired Clerks and Permanent Secretaries takes N1.05 billion, National Assembly Library Building, N4.25 billion; Constitution Review, N850 million; Completion of NILDS headquarters, N2.5 billion; Construction of National Assembly Service Commission Building, N10 billion and Public Complaints Commission, N10.69 billion.

Similarly, the debt service, domestic debts (including Ways and Means) got N4.49 trillion; foreign debts was allocated N1.81 trillion; sinking fund to retire maturing loans takes N247.72 billion.

Under recurrent expenditure (Non-debt), the presidency was allocated N76.40 billion, defence got N1.09 trillion, Ministry of foreign affairs, N93.68 billion; Federal Ministry of Information & Culture, N59.82 billion; Interior, N278.69 billion; Police Affairs, N777.40 billion; Communications and Digital economy, N32.13 billion; National Security Adviser, N172.60 billion and Secretary to the Government of the Federation takes N70.08 billion.

For recurrent expenditure, the Federal Ministry of Special Duties & Inter-Governmental Affairs gets N4.79 billion; Agriculture and Rural Development, N85.41 billion; Finance, Budget and National Planning, N29.99 billion; Industry, Trade and Investment, N16.82 billion; Labour and Employment N15.52 billion, Science, Technology and Innovation N52.33 billion; Transport N18.01 billion; Aviation N9.43 billion; Petroleum Resources N33.15 billion and Works and Housing N34.98 billion.

For the capital expenditure, Presidency is allocated N20.11 billion, Defence gets N285 billion, Foreign Affairs, N5.85 billion; Information & Culture N11.87 billion; Interior N45.62 billion; Police N60.64 billion; National Security Adviser, N70.33 billion; Agriculture and Rural Development, N248.35 billion, Finance, Budget and National Planning, N166.74 billion.

Further breakdown of the capital expenditure indicated that Science, Technology and Innovation is allocated N132.57 billion; Transport N74.26 billion; Aviation N49.41 billion;  Power N56.14 billion; Works and Housing N398.27 billion; Federal Capital Territory Administration, N15.47 billion; Education N153.73 billion; Health N134.90 billion and Humanitarian Affairs, Disaster Management and Social Development N32.05 billion.

In a related development, the National Assembly also passed the Finance bill, 2022 designed to provide support for the funding of the 2023 budget.

The passage of the bill with proposed amendments fiscal laws such as capital gains tax, company income tax, customs excise tariff Act, Federal Inland Revenue Service Act, Personal Income Tax and Stamp Duties Act followed the consideration and adoption of the report on it presented by the deputy Chairman Committee on Finance, Hon. Saidu Abdullahi at the plenary.

Moreover, the National Assembly considered and passed the sum of N262,959,510,955 as the budget for Federal Inland Revenue (FIRS) in the fiscal year 2023.