The Senate yesterday laid the foundation for the consideration of the 2021 budget as it approved the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) submitted to it by President Muhammadu Buhari.
While approving the sum of N4.28 trillion to fund the N13.08 trillion 2021 budget deficit of N5.19 trillion, the upper legislative chamber suggested to the executive alternative means of funding infrastructural development which include build, operate and transfer (BOT) and public-private partnerships.
The upper legislative chamber has also postponed its debate of the Petroleum Industry Bill (PIB) earlier scheduled for this week by two weeks.
President of the Senate, Dr. Ahmad Lawan, said at plenary that the bill, which was transmitted to the National Assembly by Buhari last week for approval would now be considered for second reading during plenary in two weeks’ time.
The postponement, he said, was to allow copies of the bill to be circulated among the senators by the Sergeant-at-Arms so that the lawmakers would have enough time to peruse the document.
The approval of the MTEF/FSP by the Senate followed the debate of the report of joint Committee on Finance and National Planning and Economic Affairs on the 2021-2023 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The Senate also approved N7.89 trillion as revenue for the federal government in the 2021 fiscal year, while aggregate expenditure of N13.08 trillion approved, is made up of total Recurrent (Non-debt) of N5.66 trillion; Personnel Costs (MDAs) of N3.05 trillion; Capital expenditure (exclusive of Transfers) N3.58 trillion; Special Intervention (Recurrent) amounting to N350 billion; and Special intervention (Capital) of N20billion.
The budget is also predicated on key assumptions, which includes, 1.86 mbpd daily crude oil production and the Benchmark oil price of $40 per barrel.
An exchange rate of N379/$ was equally approved while the projected GDP growth rate of three per cent was adopted and the projected Inflation rate of 11.95 per cent was also approved.
Some senators in their debate of the report expressed concern over the budget proposals, pointing out that the upper chamber ought to have reviewed the performance of the 2020 budget before approving the 2021-2023 MTEF.
In her contribution, ranking Senator Betty Apiafi said: “We all know that the 2020 budget had its own challenges because of the pandemic but the question we should ask ourselves, is how has the budget implementation been, how have the releases been? Most of the projects we have in the budget have not been implemented. So we need to have an idea about those issues before we proceed”.
She also questioned the rationale behind borrowing about N4 trillion while loan repayment or debt servicing is N3.2 trillion.
However, in approving the MTEF/FSP, the Senate resolved to commence immediate legislative actions to amend the Fiscal Responsibility Act (FRA, 2007) to improve revenue-generating and remittance capacity of agencies of the federal government, with particular attention to Section 21 (1) and Section 22(1)(2).
It directed relevant Standing Committees to take immediate steps to examine the laws guiding the operations of all revenue-generating agencies under their oversight to determine specific sections/clauses requiring amendment with a view to plugging wastages and boosting revenue generation capacity of government.
The Senate also urged the federal government to streamline all stamp duty collection activities by the MDAs and domicile with FIRS, to eliminate loss and to deploy the use of ICT in the collection of these stamp duties.
It equally asked the Ministry of Finance, Budget and National Planning, as well as the Budget Office of the Federation to re-examine the assumptions underlying the revenue targets of all the Federal Government agencies, to ensure the credibility of such assumptions, and the figures arising therefrom.
The upper legislative chamber also charged the Federal Government to constantly consider carefully the qualifications and suitability of heads of agencies to ensure that the overall revenue objective of the government in the MTEF/FSP and the annual budgets are always achieved.
In his speech, the President of the Senate, Lawan insisted on proper monitoring of revenue agencies and tasked the Senate Committee on Finance to closely monitor the meeting of revenue targets by revenue-generating agencies of government.
He stressed the need for a review of the performances of these agencies with a view to checking that they are actually meeting their targets.
Lawan also emphasised the importance of ensuring that revenue agencies of government are efficient in the discharge of their functions.
He condemned indiscriminate borrowing for capital projects by government agencies, adding that “there are some projects I think we shouldn’t borrow. We should explore other opportunities and sources of funding as a way to minimize borrowing.”
According to him, borrowing should be mixed with the diversification of funding capital projects in view of a growing deficit in the national budget.
“We should explore the other alternatives in the sourcing of funding – the build, operate and transfer, public-private partnerships and so many other options. I think we should explore those options. There are a lot of businesses that have an interest in our infrastructural development. Then again, we cannot eliminate borrowing; that is the sad part of it.
“In the past, I think we deluded ourselves thinking that Nigeria is the greatest country in the world meanwhile we were not developing our infrastructure because if we had applied the resources we had before, especially in good days and good years, we would have found out that we didn’t have anything to spare by calmly ourselves free.
“There were much more challenges on the side of developing infrastructure than what we were getting. But we squandered those very good days that we realised that all our contemporaries then are now somewhere far away from us in terms of development.
So we have to mix borrowing with diversification in going about meeting our development needs. The deficit, of course, is high and this is telling us the story of the history of our economic journey. “
Commenting on the high cost of governance, Lawan stressed the need to merge revenue regenerating agencies of government with a view to streamlining the cost of government.
He explained that contrary to public sentiment that the legislature should be collapsed to ensure effective governance, the National Assembly is not responsible for the bloated cost of governing the country.
Advocating a holistic approach to addressing governance in the country, hé maintained that the deficit in the budget is high, indicating a lack of savings on the part of government.
