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2022 Budget: FG Borrowings Still Within Legal Framework- FRC

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The Chairman, Fiscal Responsibility Commission (FRC), Mr Victor Muruako, says the Federal Government is still within the legal framework of fiscal borrowings and budget deficit threshold.

He said this on Friday, in Abuja at the signing of a Memorandum of Understanding (MoU) with the Nigerian Institute of Quantity Surveyors (NIQS).

Muruako said that the Fiscal Responsibility Act (FRA) 2007, gave room for exceptions when there was need for it and that the 2022 Appropriation Bill was still within the three per cent fiscal borrowing threshold.

“The FRA clearly defines what the borrowing threshold should be, but it also makes room for exceptions.

“The government and the parliament have taken the bold step to amend the FRA through the Finance Act 2020 and the Finance Act is reviewed annually and as the budget is coming the National Assembly will also take a look at the Finance Act.

“The government is still acting within the legal framework of it and for every law there must be an exception.

“While we continue to push to ensure that the deficit level does not exceed what it should be, we should also appreciate some of the obvious challenges that the government has found itself like COVID-19 which almost crippled the world economy.”

President Muhammadu Buhari presented the N16.39 trillion 2022 Appropriation Bill to a joint session of the National Assembly on Oct. 7, in Abuja.

According to Buhari, total revenue available to fund the 2022 Federal Budget is estimated at N10.13 trillion, including grants and aid of N63.38 billion, as well as the revenues of 63 Government-Owned Enterprises (GOEs).

Of the N16.39 trillion proposed to be spent in 2022, N10.132 trillion was projected to be generated as revenue and N6.26 trillion, being 3.39 per cent of GDP as deficit would be financed majorly by borrowings.

To fund the deficit, N2.51 trillion would come from domestic sources, another N2.51 trillion from foreign borrowings, N1.16 trillion from multi- and bi-lateral loan drawdowns and N90.7 billion from privatization proceeds.

Speaking on the MoU with NIQS, Muruako said that it would help in the evaluation of capital projects as having seasoned professionals on the commission’s team would enhance the quality of its verification of Federal Government projects.

Muruako also said that the FRC was organising a two-day sensitisation workshop on Transparency, Accountability and Prudence (TAP) in the North-West and South-West geo-political zones of the country.

Themed “Fiscal Transparency and Sustainable Development at the Sub-Nationals”, it is part of a series of zonal sensitisation campaigns on TAP in public finance management.

“The core objectives of the events is to expand and deepen the frontiers of fiscal responsibility, transparencty and accountability to the sub-national levels of government in Nigeria.

“The target is to reach government and citizens at all levels, down to the grassroots to enthrone a culture of fiscal responsibility, transparent and prudence and thereby advance the macro-economic stability and sustainability of our dear nation.”

The workshops are scheduled to hold in Kano for the North-West on Oct. 25 and 26 and in Lagos for the South-West on Nov. 1 and 2.

The president of NIQS, Mr Mohammed Abba-Tor, said that NIQS members across the country were willing to support the efforts of the commission in having the FRA amended, while also giving technical support in the fight against corruption.

He said that the impact of the MoU on the commission were the values quantity surveyors lived by which include transparency, value for money and accountability.

“So, we are going to make ourselves available in areas of managing and evaluation monitoring, evaluation of projects, looking at post contract auditing and so on.

“We have templates and frameworks for evaluating whether the process has been diligently followed or not, if they are not followed, there should be some repercussions for those defaulting government agencies.

“In addition to the monetary evaluation is post contract audit, we are also going to make available a kind of technical advice and support in various sectors as we keep on monitoring and partnering with this very important commission.”

Abba-Tor said that the collaboration between the public sector and private sector, demonstrated by the institute’s willingness to partner with FRC was first of its kind and very important for national support.

He added that the private sector was supporting the efforts of the Federal Governments in ensuring value for money as so much money should not be spent on getting so little in terms of project delivery.

According to him, there must be a match between the concept, plan and then the actual achievement of goals.

FRA which came into existence in 2007, is an Act that provides for prudent management of the nation’s resources and ensure long-term macro-economic stability of the national economy.

It also seeks to secure greater accountability and transparency in fiscal operations within a medium-term fiscal policy framework. (NAN)

Economy

Value Addition is new Standard in Mining Operations – Alake

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The Minister of Solid Minerals Development, Dr Dele Alake has declared value addition as the new indispensable standard for mining operations in the country.

Alake made the declaration in a statement issued by his Special Assistant on Media, Mr Segun Tomori, on Tuesday in Abuja.

The minister had earlier said that the federal government had resolved to ensure compliance to value addition before permitting investors to operate.

He said that his seven-point agenda for the ministry had placed the mining sector on the global front burner since assuming office, which had generated renewed interest from the international community in Nigeria`s mineral resources.

According to the statement, the minister lauded a mining company, African Natural Resources and Mines Ltd.

(ANRML), during an inspection tour in Kaduna State, for its 600 million dollar facility dedicated to the mining and processing of magnetite iron-ore.

He described the move as in line with the government`s resolve for value addition, which is especially apt given President Bola Tinubu`s quest to develop the solid minerals, to boost Nigeria`s economic profile and to meet the global upsurge in energy transition.

“The company aligns with our vision of value addition and beneficiation through its processing of iron-ore, and I urge other mining companies to take a cue from them, “ he said.

He reiterated the government`s commitment to abstain from granting mining licenses to companies that lack the necessary plans for value addition.

The minister acknowledged that resilience, courage and laying a solid foundation were critical in contributing to the company success.

He added that such factors also serve as guidelines for President Tinubu`s administration in its efforts for economic transformation.

“ We have set our minds in this administration and invariably in Nigeria to achieve success, that is why Mr President is restructuring the economy.

“When this company (ANRML) started seven years ago, we saw one of the foundations through the video documentary, the amount of concrete that went in to erect a foundation, just to carry a giant edifice.

“That is what we are going through. When we get through the gestation period, the results will manifest, and it will herald prosperity, “he said.

The minister had stated that no license would be granted to companies wishing to enter the mineral sector without presenting a plan for value addition, such as processing and refining which has multiplier effect on the economy. (NAN)

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Economy

Life Insurance Records 95% Net Claims in Q4 2023-NAICOM

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The National Insurance Commission (NAICOM) says Life insurance business recorded about 95 per cent net claims of the total claims in the fourth quarter of 2023.

A report by NAICOM in Abuja on Tuesday hinted that the record was due to the direct reflection of the ongoing regulatory measures by the Commission regarding claims settlements.

NAICOM said the insurance market average stood at about 71.

4 per cent of the N536.
5 billion gross claims reported at the close of the fourth quarter.

The Commission said the market also recorded retention of about 87.7 per cent for the life business, 54 per cent for non-life while the aggregate market average retention stood at 66.

7 per cent for the period.

It showed that the insurance industry sustained its progressive trend of positive market performance at the close of 2023 fourth quarter.

According to NAICOM, the insurance market recorded a milestone growth to close at N1.003 trillion, representing about 27 per cent growth compared to the N790 billion recorded in 2022.

”Major growth drivers in the non-life segment of the market were oil and gas and fire Insurances contributing 27.3 per cent and 24.1 per cent respectively.

”In a direct reflection to the “no-premium no-cover” policy of the Commission, the outstanding premium continues to decline.

”The premium posted 1.6 per cent as outstanding of all the premiums generated in the market during the period.

”Statistics also shows that the market recorded total assets of about N2.67trillion and capitalisation of N851billion in 2023,” NAICOM said. (NAN)

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Economy

No Mining License without Mineral Value Addition Plans-Alake Warns

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The Minister of Solid Minerals Development, Dr Dele Alake has warned that no mining license would be issued to prospective investors without requisite plans for value addition on minerals.

Alake gave the warning in a statement  by his Special Assistant on Media, Segun Tomori on Tuesday.

He said the Federal Government had resolved to ensure compliance before permitting investors to operate.

He said that his Seven -Point Agenda for the ministry had placed the mining sector on global front burner since assuming office, which had generated renewed interest from the international community in Nigeria’s mineral resources.

He said the support of the executive and the legislature had enabled the ministry to showcase the solid minerals sector globally, resulting in his election as the Chairman of the Africa Minerals Strategy Group (AMSG) at the Future Minerals Forum in Riyadh, Saudi Arabia.

According to him, with the pact that led to the formation of the AMSG, there is now unity of purpose on the African continent regarding the issue of local value addition.

“We are no longer going to allow anybody or license any company that wants to go into the mineral sector without giving us a plan for local value addition,  like processing, refining and this has a multiplier effect on the economy.

“It instantly generates employment rather than a few people carting away lithium, gold, and the likes to other countries to sell.

“These minerals must now be processed in Nigeria, creating more value and beneficiation for local communities where they are sourced, ” he said.

Reports says that the minister had earlier received members of the House Committee on Solid Minerals who were on oversight visit to his office.

The minister commended the lawmakers for their support in repositioning the mining sector, stressing that boosting the economic profile of Nigeria required joint task by both the executive and legislature.

He acknowledged the significant contribution of sub-nationals to mining development, emphasising that state chairmen of  Mineral Resources and Environmental Management Committee (MIREMCO) and five committee members were nominated by state governments. (NAN)

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