According to President Muhammadu Buhari, if the National Assembly does not authorize N23.7 trillion in extra-budgetary spending, it will cost the federal government N1.8 trillion in interest.
The President added that his administration has included sufficient funding in the 2023 budget to ensure the smooth running of the upcoming general elections and the transition plan.
Recall that Buhari had asked the National Assembly to approve a certain amount that he said came from loans made by the Central Bank of Nigeria (CBN) over a ten-year period for emergencies.
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Following a boisterous session last week, the Senate had suspended the President’s request.
The request was deemed to be unconstitutional by Senators Betty Apiafi and Thompson Sekibo.
Additionally, they required that the Senate receive information on how the money was used before it could approve the request.
Buhari, however, stated that he had no plan to challenge the lawmakers’ decision while addressing during the signing ceremony for the N21.83 trillion 2023 budget at the Presidential Villa, Abuja.
He said: “I also urge the National Assembly to reconsider its position on my proposal to securitise the federal government’s outstanding Ways and Means balance at the Central Bank of Nigeria, CBN.
“As I stated, the balance has accumulated over several years and represents funding provided by the CBN as lender of last resort to the government to enable it to meet obligations to lenders, as well as cover budgetary shortfalls in projected revenues and/or borrowings.
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“I have no intention to fetter the right of the national assembly to interrogate the composition of this balance, which can still be done even after granting the requested approval.
“Failure to grant the securitisation approval will however cost the government about N1.8 trillion in additional interest in 2023 given the differential between the applicable interest rates which is currently MPR plus three percent and the negotiated interest rate of nine percent and a 40-year repayment period on the securitised debt of the Ways and Means.”
The President further claimed that the National Assembly added N770.72 billion in new projects to the 2023 budget plan he submitted, as well as N58.55 billion in additional funding for Ministries, Departments, and Agencies (MDAs).
In comparison to the initial executive plan, which called for a total spending of N20.51 trillion, he said that the total expenditure of N21.83 trillion represented an increase of N1.32 trillion.
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He outlined how the administration would be able to respond to the damage inflicted by the most recent nationwide floods on infrastructure and farm sectors and urged
More information on the approved budget and the accompanying 2022 Finance Act will thereafter be provided by the Minister of Finance, Budget, and National Planning.
”We have examined the changes made by the National Assembly to the 2023 Executive Budget proposal. The amended fiscal framework for 2023 as approved by the National Assembly, showed additional revenue of N765.79 billion, and an unfunded deficit of N553.46 billion.
”It is clear that the National Assembly and the executive need to capture some of the proposed additional revenue sources in the fiscal framework. This must be rectified.
”I have also noted that the National Assembly introduced new projects into the 2023 budget proposal for which it has appropriated N770.72 billion. The National Assembly also increased the provisions made by Ministries, Departments and Agencies (MDAs) by N58.55 billion,” he said.
According to Buhari, he decided to sign the 2023 Appropriations Bill into law in the form it was passed by the National Assembly in order to allow its implementation to start right away in light of the upcoming process of switching to another democratically elected government.
Although he expressed hope that the National Assembly would work with the executive branch of government on this, he gave the Minister of Finance, Budget, and National Planning instructions to contact the legislature to discuss some of the adjustments made to the executive budget proposal.
He pleaded with the National Assembly to change its mind over his proposal to securitize the remaining Ways and Means balance at the Central Bank of Nigeria, CBN, for the Federal Government.
Buhari expressed his gratitude to the National Assembly for granting his request to extend the date of expiration to March 31, 2023.
In order to support efforts to deliver important projects and public services and improve the living conditions of Nigerians, he directed the Ministry of Finance, Budget, and National Planning to work toward the early release of the 2023 capital votes. This will enable Ministries, Departments, and Agencies to begin the implementation of their capital projects in good time.
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The President reaffirmed that the 2023 Budget was created to support fiscal sustainability, macroeconomic stability, and a seamless transition to the new administration. He also stated that it was intended to support social inclusion and boost the economy’s resilience.
He assured that sufficient budgetary arrangements had been established for the smooth running of the next general elections and the transition program.
According to him, “As I mentioned during the presentation of the 2023 Appropriation Bill, the budget was developed to promote fiscal sustainability, macroeconomic stability and ensure smooth transition to the incoming administration.
“The budget was also designed to promote social inclusion and strengthen the resilience of the economy. Adequate provisions have been made in the 2023 Budget for the successful conduct of the forth-coming general elections and the transition programme.”
The President instructed MDAs and Government Owned Enterprises (GOEs) to step up their revenue mobilization efforts, including making sure that all taxable entities and people pay any outstanding taxes, in order to meet the budget’s revenue goals.
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He stated that pertinent agencies must maintain present efforts toward the achievement of crude oil production and export targets if they are to meet the goals of the 2023 Budget.
”To augment available fiscal resources, MDAs are to accelerate the implementation of Public Private Partnership initiatives, especially those designed to fast-track the pace of our infrastructure development.”
On the Finance Bill 2022, the President expressed regrets that its review, as passed by the National Assembly, was yet to be finalized.
”This is because some of the changes made by the National Assembly need to be reviewed by the relevant agencies of government. I urge that this should be done speedily to enable me assent law,” he said.
The Senate President, Ahmad Lawan, promised in his remarks that the National Assembly will seek to enhance funding for the government and lower the rate of budget deficit.
“But that is not to say that we should raise taxes that will be out of the roof to cause problems for our citizens. But I believe that as a National Assembly, in the next five months, we must be looking at increasing the funds available to the government and also ensuring that the deficit budget is minimized in the next assembly by the grace of God,” he said.
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Femi Gbajabiamila, speaker of the House of Representatives, rejected any padding or jerking up of the budget on his side, stating that the MPs had done an excellent job of fulfilling their constitutional duties.
“If you understand constitutional democracy, there are different layers of government and it’s called separation of powers. Ours is for us to receive proposals and that’s why they’re called proposals anywhere in the world.
“The National Assembly has done very well in meeting its constitutional mandate. It takes all arms of government to be on board to give a true working document for the country. The executive did everything they could; and we have even a wider view, a bird’s eye view of what’s going on in all the agencies.
”We have also complemented what the executive has done. It’s all for the good of the country and that’s what we’ve done,” he said.
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