FEC Approves 2018 Budget

There are indications that the Federal Executive Council (FEC) will today approve the 2018 budget.

The weekly Council meeting, which was shifted from yesterday to today, åhas budget submission as the only item its agenda.

The presidency had set October as the deadline for submission of the budget to the National Assembly in a bid to return the budget cycle from January to December.

LEADERSHIP gathered that barring any last minute change, President Muhammadu Buhari would present the budget to a joint session of the National Assembly on Tuesday next week.

It was also learnt that the president will today evening host the leadership of the National Assembly to a dinner to smoothen the relationship between the executive and legislature ahead of the submission of the budget to the National Assembly.

As part of effort to beat the October deadline, President Buhari had two weeks ago presented the 2018-2020 medium term expenditure framework (MTEF) and the fiscal strategy paper (FSP) to the House of Representatives in preparation for the presentation of the 2018 budget.

Speaker of the House of Representatives, Yakubu Dogara, read a letter dated October 9, 2017, conveying the MTEF/FSP to the House.

Although the Speaker read the letter without giving details, LEADERSHIP gathered reliably that in the MTEF, the federal government projected a budget of N7.9 trillion for 2018, about N500 billion more than the 2017 N7.44 trillion appropriations.

It was also learnt that the federal government proposed $45 per barrel of oil and a 2.3 million barrel per day (mbpd) oil production quota for the 2018 budget.

The executive is said to have equally proposed an exchange rate of N305/$1, with 12.42 inflation rates, a 4.8 per cent GDP growth rate and nominal GDP of N133.97 trillion, as well as N81.60 trillion nominal consumption.

It is also expected that N2.4 trillion would be spent on capital projects implementation as against N2.17 trillion approved for 2017.

The 2016 and 2017 budgets submitted by the president to the National Assembly in December were marred by controversies.

To avoid issues of missing budget and budget padding, the executive is keen on avoiding zany form of controversy in the 2018 budget.

Senate Mulls Scrapping Of Agencies Over N2tn Revenue Loss

Several Acts and laws setting up some federal government agencies risk being repealed by the Senate.

Some lawmakers who spoke on the floor of the Red Chamber yesterday called for the scrapping of the revenue generating agencies.

They attributed their suggestion to the huge revenue leakages annually, resulting in over N2 trillion in losses incurred by the federal government from remittances of the agencies between 2012 and 2016.

Also, the Senate committee on Public Accounts (SPAC) has threatened to publish names of agencies that have not submitted their annual reports and audited accounts for 2016 in the mass media.

Call for scrapping of some of the federal agencies were made following debate on the interim reports of the Senate ad-hoc committee on alleged misuse, under-remittance and other fraudulent activities in collection, accounting, remittance and expenditure of IGR by revenue generating agencies.

The Senators were palpably angered by the discovery in the report that about N2 trillion loss was incurred from under-remittances by various agencies of the federal government and that about N19 out of the N21.5 trillion generated revenue was spent by them during period under review.

Senator Ben Murray Bruce (PDP Bayelsa) said the report should give the Senate and by extension, the National Assembly, the required legislative weapon for scrapping many of the agencies that are nothing but drain pipes in the nation’s economy.

According to him, the Voice of Nigeria (VON), which was created during the era of cold war between the western and eastern blocs, has lost its relevance of existence and yet, it is still being heavily funded by the federal government without remitting any reasonable revenue to the federation account.

“The Federal Radio Corporation of Nigeria (FRCN) which made N1.2 billion under-remittance out of N7billion generated, going by this report, needs just about 2,000 efficient workforce as against the over bloated 8,000 workforce it presently parades”, he stated.

In his submission, Senator Tayo Alasoadura declared that all the 601 federal government agencies are over bloated and not understaffed in anyway, with attendant heavy burden on the nation’s revenues in form of huge salaries.

Also contributing, the deputy President of the Senate, Ike Ekweremadu, said besides amending the laws, it was imperative to either merge or scrap some of the agencies of government that are not productive or useful to the economy.

He called on the Senate to study the Orosanya committee report and make further recommendations for the scrapping or merger of some agencies that are consuming government revenue rather than generating funds.

In the 32 – page report presented by the committee chairman, Senator Solomon Olamilekan Adeola (APC Lagos West), 25 out of the entire 93 revenue-generating agencies covered are alleged to have defrauded the federal government to the tune of N2 trillion through under-remittances of revenues made between 2012 and 2016.

Specifically, the Senator said the Nigeria Customs Service, which generated N335.855billion during the period under review, failed to remit N83.963billion as 25% of the amount generated in line with the provisions of the Fiscal Responsibility Act 2007.

Similarly, as contained in the report, the Federal Inland Revenue Service (FIRS) made under-remittance of N33.83billion out of the N455.5billion it generated.

Also included is the Nigerian Ports Authority, which recorded under-remittance of N86.636 billion into the Consolidated Revenue Fund (CRF), despite generating N789.104billion.

Others are CBN, N13.716billion under-remittance, out of N3.098 trillion generated; NIMASA, N184.489 billion under remittance out of N301.160billion generated and NTA N5.567billion under remittance out of N56.817 billion generated.

For NNPC, the committee stated that, while the Nation’s cash cow during the period under review, generated N15.541trillion, its entire expenditure during the period was N18.657 trillion, exceeding the corporation’s revenue profile by N3.115trillion.

But consideration for the recommendations made in the interim report was deferred till submission of the final report in six weeks.

Meanwhile, the Public Accounts Committee (PAC) of the Senate yesterday threatened to publish the names and details of Ministries, Departments and Agencies (MDAs) of government that do not comply with the constitutional provision requiring them to submit their annual reports and audited accounts to the Office of the Auditor General of the Federation.



The chairman of the committee, Senator Matthew Uroghide, who issued the threat, said the committee would also make recommendations to the Senate to suspend the budget approvals of the defaulting MDAs until they comply.

“Information from the Office of the Auditor General shows that all the federal government statutory corporations, commissions, authorities and agencies are not up to date with their submission of their annual accounts and audited reports as specified by section 85 (3) of the constitution. They have, therefore, violated the provisions of the constitution”, Uroghide said.

He said the committee will conduct status inquiry on the revenue generation and expenditure of the MDAs as appropriated, as part of its function to expose inefficiency, waste and ineffectiveness in the management of public funds.

$3bn Of Proposed Borrowing to Refinance Loans By Past Administration – Adeosun

Meanwhile, the Minister of Finance, Mrs Kemi Adeosun, has revealed that $3 billion of the $5.5 billion, which it plans to raise from the international financial market, will be used to refinance debts the President Muhammadu Buhari-led government inherited from the past administration.

The Minister, who appeared on Arise TV News Programme, said the proposed $5.5 billion loan is made up of two components namely refinancing of heritage debts to the tune of $3 billion and new borrowing of $2.5 billion for the 2017 Budget.

She said, “Let me explain the $5.5 billion borrowing because there have been some misrepresentations in the media in the last few weeks. The first component of $2.5 billion represents new external borrowing provided for in the 2017 Appropriation Act to partly finance the deficit in that Budget.

“The borrowing will enable the country to bridge the gap in the 2017 budget currently facing liquidity problem to finance some capital projects

“For the second component, we are refinancing existing domestic debt with the $3 billion external borrowing. This is purely a portfolio restructuring activity that will not result in any increase in the public debt”.

Adeosun noted that the country’s debt puzzlingly rose from N7.9 trillion in June 2013 to N12.1 trillion in June 2015, despite the fact that only 10 per cent of the budget was allocated to capital expenditure when oil price exceeded $120 per barrel.
source: Leadershipng