FG Risks Paying N1.8trn Interest On N23.7trn Loanm – Buhari

FG Risks Paying N1.8trn Interest On N23.7trn Loanm – Buhari

President Muhammadu Buhari said yesterday that if the National Assembly fails to approve N23.7 trillion in extra-budgetary spending, it would cost the federal government N1.8 trillion in interest.

The President also stated that his administration had included adequate provisions in the 2023 budget for the successful conduct of the upcoming general elections and transition program.

Recall that Buhari had asked the National Assembly to approve a sum he claimed was provided by the Central Bank of Nigeria, CBN, through emergency loans over a 10-year period.

Following a raucous session last week, the Senate suspended the President’s request.

Senators Betty Apiafi and Thompson Sekibo claimed the request was unconstitutional.

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They also demanded that the Senate receive details on how the funds were spent before it could approve the request.

However, speaking at the signing ceremony for the N21.83 trillion budget for 2023 at the Presidential Villa in Abuja, Buhari stated that he had no intention of contesting the lawmakers’ decision.

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.

“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 also accused the National Assembly of introducing N770.72 billion in new projects into the 2023 budget proposal he submitted, adding that the national legislative body increased MDA provisions by N58.55 billion.

He stated that the total expenditure of N21.83 trillion was an increase of N1.32 trillion over the initial executive proposal of N20.51 trillion.

He explained that the 2022 Supplementary Appropriations Act would allow the administration to respond to the devastation caused by recent nationwide floods in the infrastructure and agriculture sectors, and he asked for his support.

the Minister of Finance, Budget and National Planning to subsequently provide more details of the approved budget and the supporting 2022 Finance Act.

”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.

Buhari said his decision to sign the 2023 Appropriation Bill into law as passed by the National Assembly was to enable its implementation commence without delay, considering the imminent transition process to another democratically elected government.

He, however, directed the Minister of Finance, Budget and National Planning to engage with the legislature to revisit some of the changes made to the executive budget proposal, expressing the hope that the National Assembly would cooperate with the executive arm of government in this regard.”

He urged the National Assembly to reconsider its position on his proposal to securitize the Federal Government’s outstanding Ways and Means balance at the Central Bank of Nigeria, CBN.

Buhari thanked the National Assembly for approving his request for an extension of its validity date to March 31, 2023.

He directed the Ministry of Finance, Budget and National Planning to work towards early release of the 2023 capital votes to enable Ministries, Departments and Agencies commence the implementation of their capital projects in good time to support efforts to deliver key projects and public services as well as improve the living conditions of Nigerians.

Reiterating that the 2023 Budget was developed to promote fiscal sustainability, macroeconomic stability and ensure smooth transition to the incoming administration, the President said it was also designed to promote social inclusion and strengthen the resilience of the economy.

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He pledged that adequate provisions had been made in the budget for the successful conduct of the forthcoming general elections and the transition programme.

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.”

On achieving revenue targets for the budget, the President directed MDAs and Government Owned Enterprises, GOEs, to intensify their revenue mobilization efforts, including ensuring that all taxable organizations and individuals pay taxes due.

To achieve the objectives of the 2023 Budget, he said relevant agencies must sustain current efforts towards the realization of crude oil production and export targets.

”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.”

Concerning Finance Bill 2022, the President expressed disappointment that its review, as passed by the National Assembly, had not yet been completed.