…PDP, Ndume, expert caution on fresh borrowing by FG
House of Representatives may kick against provision for subsidy on Premium Motor Spirit, popularly known as petrol, in the 2022 budget.
This, it was learnt, is to ensure a raise in the percentage budgetary allocation to capital projects.
The chairman of the House committee on Media and Public Affairs, Hon Benjamin Kalu, hinted journalists yesterday that the House was worried about the low budgetary allocation to capital projects which stands at 26 per cent of the budget.
“We have also observed that some MDAs were not remitting sufficiently to the federation account”
“The expenditure framework is at N13.9 trillion, capital expenditure accounts for only 26 per cent. This worries the House, because of the continued provision for subsidy which is a drain to this government. The House believes that the capital expenditure should be increased from what it is to what it ought to be,” he noted.
This, however, contrary to the statement by the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, who said the federal government would sustain subsidisation of PMS till 2022.
Kyari, while speaking at a stakeholders’ hearing organised by the Senate Joint Committees on Finance, National Planning, Foreign and Local Debts, Banking, Insurance, and other financial institutions and Petroleum Resources on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (MTEF-FSP) in Abuja, said the decision to exit the subsidy regime would be determined by the outcome of the ongoing negotiations between the authorities and organised labour.
But Kalu, while briefing journalists on the focus of the House as the lawmakers resume commencing the 3rd session of the 9th Assembly, said “One of the issues on the front burner of the National Assembly is to review the elements around the oil subsidy for the sake of closing up the gaps for leakages in this country,” he said.
He also noted that the House was concerned about incoherent data from agencies of government, adding that some agencies were under remitting to the federation account.
He, however, noted that some agencies that do not remit funds to the federation accounts due to the provisions of their establishment Acts would have their Acts amended.
“We have also observed that some MDAs were not remitting sufficiently to the federation account. They were under remitting and there were agencies that were not remitting at all because their establishment acts do not give them the permission to remit.
“We need to amend some of those establishment acts, because of the impact of COVID, the government is looking for money from left-right and centre and if there are leakages that have been encouraged by the establishment acts, that piece of legislation will be looked into for possible amendment,” he said.
While raising concerns about the inconsistent records in the petroleum sector, Kalu said that the House would resolve the mystery around the specific oil revenue by determining the actual volume of oil produced per day.
The spokesperson of the House stated: “Incoherent data among the agencies such as customs, NNPC, PPRA, PEF, and DPR, especially on issues like the specie volume of crude oil produced per day; secondly, what is the level of our PMS consumption per day? These things are necessary because there is a determination by the House to close areas of leakages so that the federal government will have enough to take care of the welfare of citizens.”
According to him, it is important to note that out of the N7.26 trillion aggregate revenue available for the government for 2022, N3.16 trillion will be coming from oil-related sources.
The House, however, threatened to withhold the budget of MDAs that are yet to appear before the House Committee on Finance if they fail to appear upon the next invitation.
The House also frowned at the revelation that some MDAs merely recycle budgets without introducing anything new.
“Agencies that were invited and didn’t make it will be invited again and if they didn’t come, we are going to ensure that we remove their capital and overhead expenses from the 2022 budget,” Kalu noted.
Meanwhile, the House has declared that it would only approve President Muhammadu Buhari’s request to borrow another $4 billion ($4,054,476,863) and €710 million loans from bilateral and multilateral organisations if the lawmakers are satisfied with the details of the spending plan.
“Projected new borrowing will be approved only when the details of where the borrowing is going to be provided,” he said.
In another development, the Peoples Democratic Party (PDP) has described the outcry by the chairman of Economic Advisory Council (EAC), Dr Doyin Salami, on the debt accumulation and spending by the All Progressives Congress (APC) administration as confirmation that Nigeria is being wrecked.
The opposition party added that the “State of the Nation” revelation by Dr Salami that the nation’s debt profile has become “unmaintainable” at N35 trillion and growing, with an alarming debt service-to-revenue ratio of 97.7 percent, also confirmed that President Muhammadu Buhari and APC have mortgaged Nigeria’s national patrimony to foreign interests.
National publicity secretary of PDP, Kola Ologbondiyan, said Dr Salami’s revelation validates apprehensions that the president, who is still borrowing more money, is completely disconnected from his economic team, “while the corrupt cabal in his Presidency has taken advantage of the situation to pillage the vaults.”
Ologbondiyan, in a statement, added: “It is distressing that despite the already terrifying situation, and with the further depreciation of our naira to N570 to a dollar, President Buhari is moving to take a fresh N2.66 trillion ($4 billion and €710 million) external loan, for very opaque purposes.
“More frightening is the revelation by EAC that the nation’s debt stock might soon hit N45 trillion.
“This is especially as rather than developing strategies to create wealth to run its affairs and repay the loans it collected, the incompetent, lethargic and corrupt Buhari administration is only resorting to more loans in a reckless fashion.
“Moreover, the fact that the APC and its government cannot point to any legacy project financed with the loans validates apprehensions in the public space that the funds are being frittered by APC leaders and cabal in the corridors of power.
“This position is corroborated by Dr. Salami’s report that Federal Government expenditure had been “on the increase and at a faster pace” even when there are no projects on ground to justify such astronomical increase.
“Moreover, the corruption and incompetence, in addition to policy inconsistency, insecurity and macroeconomic instability, under the Buhari-led APC administration, as also observed by the EAC, had stifled investments and crippled our national economy.”
Also, the Senator representing Borno South Senatorial District, Ali Ndume, yesterday warned the executive and the legislature against what he described as excessive borrowing.
He said even though it is not a crime, Nigeria must be cautious in taking it.
The APC Senator, who decried the increasing requests for loans by the executive arm of government and expeditious approval by the National Assembly, said the situation was worrisome.
Ndume stated this while speaking with Senate correspondents at the National Assembly.
He said Nigerians are now suspicious of the manner in which the federal lawmakers are expeditiously passing loan requests and have tagged them with a rubber stamp.
According to him, some of such requests hurriedly approved in the past are even yet to be granted.
He explained further that in as much as loans or borrowings are required by the government to address the problem of infrastructural deficits facing the country, such loans should be cautiously considered in the face of debt servicing getting to 80 or 90%.
Ndume said, “Borrowing is not a crime but when the rate of debt services increases which I understand is getting to 80% to 90% you have to be cautious, you have to look for alternatives.
“There are some loans that are not just absolutely necessary, there are some that can be delayed, and there are some that can be negotiated or renegotiated in terms of conditions attached to them. I think this is what the media should analyse and see whether it is necessary.
“We have infrastructural deficit in this country and all we hear is that when people come to Abuja and allocation is made you don’t see anything happening, for me, is better to borrow that money and do the road instead of giving it out for people to collect it and go and spend it without accountability .
“What I am worried about again is the way the Senate is handling it. The Senate by definition is the house of deliberation, when things like this come we don’t just rush and approve it.
“Such requests are supposed to be looked at critically by crossing the Ts and dotting the Is, ask questions, carry the people you are representing along and not sit down here in the National Assembly carrying out expeditious approvals which make the people we represent look at us with suspicion.
“They call us rubber stamps because we don’t carry people along. We rushed to approve certain Borrowings which up till now, not granted by targeted creditors”.
SOURCE: leadership.ng