President Muhammadu Buhari has written to the Senate, seeking the approval of a supplementary budget of N2.557 trillion.
The letter, an amendment to the Appropriations Act passed in December 2021, was read out at the start of plenary on Tuesday.
The budget, Mr. Buhari said, is meant to provide for subsidy on petroleum products from June to December 2022.
He requested that an additional provision for N2.557 trillion naira be appropriated by the National Assembly for this purpose.
This comes about a month after the federal government suspended plans to remove subsidy on petroleum products.
The Finance Minister, Zainab Ahmed, had said only N443 billion was available to fund subsidy in 2022.
She also said the Nigerian National Petroleum Company Limited (NNPC) requested a total of N3 trillion from the federal government to fund fuel subsidy in 2022.
With the supplementary budget of N2.557 trillion approved, the federal government will now have about N3 trillion to fund subsidy.
Queries/required amendments
The president, in the letter, said while the sum of N106.1 billion provided in the Supplementary Bill would be used as capital expenditure, N43.87 billion would be for recurrent expenditures.
He also sought a review of the Finance Act 2021.
He also ordered the lawmakers to remove all capital projects that were replicated in the 2022 Appropriation Act.
The president identified 139 out of the 254 projects in the budget totaling N13.24 billion to be deleted.
He emphasized the need to reinstate four capital projects totaling N1.4 billion in the Executive Proposal for the Federal Ministry of Water Resources, and N22.0 billion cut from the provision for the Sinking Fund to retire mature loans needed to meet government’s obligations under already Issued Bonds.
“It is important to restore the provisions made for various key capital projects in the 2022 Executive Proposal (see details in Schedule l) that were cut by the National Assembly. This is to ensure that critical ongoing projects that are cardinal to this administration, and those nearing completion, do not suffer a setback due to reduced funding.
“It is equally important to reinstate the N25.81 billion cut from the provision for the Power Sector Reform Programme in order to meet the Federal Government’s commitment under the financing plan agreed with the World Bank.
“In addition, it is necessary to reinstate the four (4) capital projects totaling N1.42 billion in the Executive Proposal for the Federal Ministry of Water Resources that were removed in the 2022 Appropriation Act.
“Furthermore, there is critical and urgent need to restore the N3 billion cut from the provision made for payment of mostly long outstanding Local Contractors’ Debts and Other Liabilities as part of our strategy to reflate the economy and spur growth (see Schedule I).”
The president also queried the lawmakers for including the National Assembly’s expenditures in the budget of the Executive.
This, he said, negates the principles of separation of powers and financial autonomy of the legislature.
He, therefore, asked the National Assembly to transfer its expenditures totaling N16.59 billion in the Service Wide Vote back to National Assembly Statutory Transfer provision.
“It is also imperative to reinstate the N22.0 billion cut from the provision for Sinking Fund to Retire Mature Loans to ensure that government can meet its obligations under already issued bonds as and when they mature.
“The cuts made from provisions for the recurrent spending of Nigeria’s Foreign Missions, which are already constrained, are capable of causing serious embarrassment to the country as they mostly relate to office and residential rentals.
“Similarly, the reductions in provisions for allowances payable to personnel of the Nigerian Navy and Police Formations and Commands could create serious issues for government. It is therefore imperative that these provisions be restored as proposed.
“It is also absolutely necessary to remove all capital projects is that replicated in the 2022 Appropriation Act; 139 out of the 254 such projects totaling N13.24 billion have been identified to be deleted from the budget.”
More amendments
The president also identified some “significant and non-mandate projects” that were introduced in the budgets of the Ministry of Transportation, Office of the Secretary to the Government of the Federation, and Office of the Head of Civil Service of the Federation.
He said there are several other projects that have been included by the National Assembly in the budgets of agencies that are outside their mandate areas.
He, therefore, directed the Federal Ministry of Finance, Budget, and National Planning to work with the relevant committees to comprehensively identify and realign all such misplaced projects.
“It is also necessary to restore the titles/descriptions of 32 projects in the Appropriation Act to the titles contained in the Executive Proposal for the Ministry of Water Resources (see Schedule IV) in furtherance of our efforts to complete and put to use critical agenda projects.
“…I, therefore, request the National Assembly to make the above amendments without increasing the budget deficit. I urge you to roll back some of the N887.99 billion of projects earlier inserted in the budget by the National Assembly to accommodate these amendments.”
Mr. Buhari said the total budget deficit is projected to increase by N1.01 trillion to N7.40 trillion, representing 4.01 percent of GDP – the incremental deficit will be financed by new borrowings from the domestic market.
The lawmakers are expected to consider the proposed amendments by the president on another legislative day.
By QueenEsther Iroanusi,
Premium Times