Economy
2022 Budget: Reps Groan Over N3.61trn Debt Service Proposal
By Ubong Ukpong, Abuja
Opposition lawmakers in the House of Representatives, at the 2022 budget debates yesterday, canvassed that all the Ministries, Departments and Agencies (MDAs), of the Federal Government, that failed to implement the 2021 budget satisfactorily, should not be given allocations in the 2022 budget.
The position was strongly supported by the House presided by Speaker Femi Gbajabiamila, as the opposition also held that the allocation of N3.
61trilion for debt servicing in the budget was quite high, asking that it be reviewed downward.The opposition lawmakers also asked the House to consider actions that would reduce the budget deficits, borrowing, as well as asked that the oil price benchmark of $57per barrel, should be moved up to $60 per barrel.
Opposition Leader, Hon. Ndudi Elumelu, who spoke during debates on the general principles of the 2022 Appropriation bill, said that there were some agencies of government that received their releases, but refused to implement the 2021 budget.
“Some agencies refused to implement the budget even though they had releases. I see no reason this House should patronise them. National Assembly should not give them even one Naira”, the Minority Leader told the House.
Elumelu underscored the need for the House to ensure that all the standing committees collate the list of erring Ministries, Departments and Agencies (MDAs) that failed to implement the capital projects despite the release of about 70 percent fund in the 2020 Appropriation Act.
To this end, he urged the House to give zero allocations to all erring MDAs, and channel their allocations to other productive sectors of the nation’s economy.
He said N3.61 trillion earmarked for debt servicing, took a large chunk of the budget and was quite worrisome.
“6.2 trillion Naira deficit is worrisome, and government is proposing more borrowing. Let us try to do what we can to reduce deficits and borrowing”, he said.
Stressing that he had no problems with borrowing, Elumelu said, the money borrows must be put into good use, such as roads, power, public transport and other infrastructure, for the benefits of citizens.
“My worry is loan”, he said stressing that the House should work at strengthening the transmission of power, and hospital infrastructure should be given attention so that the people could have quality treatments when they go for treatments.
Also speaking, Hon Onofiok Luke, commended the provision of N50bilion for the hazard allowance for medical personnel, asking for a upward review of the present N5000 per head, to encourage hard work and improved services in the hospitals.
Luke said this would be part of measures toward reversing the exodus of medical personnel to other countries amidst the lingering pandemic of COVID-19.
“Following from the above, there are plausible recommendations by the FG in the 2022 proposals which my constituents have asked me to share and then appreciate and look at it and commend it.
“One of them is the provision of about 50 billion for hazard allowance for medical personnel. We would recall that as part of the issues that led the medical personnel to go on strike is the hazard allowances which were not paid and even as of now those hazard allowances are quite very minimal. We commend this effort of the Federal Government to capture this. I believe that this would stem the tide of industrial action in the health sector in 2022.
“It is also commendable in the sense that we are still fighting COVID 19, we know that the Federal Government had paid for about three months Covid-19 allowance, and after that those allowances have not been paid. We know what are medical personnel are exposed to daily so there is need for them for to be paid these allowance so it can be a morale booster.
“We have had a lot of brain drain in the last few years, because our eggheads have been pushed to go into other climes because of the challenges we have here. So while we are commending Mr. President for this, there is need for us to up that hazard allowance from N5,000 which has been for over 20 years to something that will boost the morale of those medical personnel. So this is commendable but we can equally look at how we can increase the hazard allowance for medical personnel”, Luke said.
On debt serving, Hon. Luke, who observed that the sum of N3. 61 trillion for debt servicing representing about 25 percent of the whole budget was worrisome, also tasked government on the need to review it.
“Another source of concern is that the proposal before us has a deficit of N6.2 trillion and government is proposing new borrowings to finance this deficit. What this implies is that then total public debt of Nigeria is expected to rise to N5 trillion in 2022 fiscal year. This is worrisome not only for today but generations unborn and the future of Nigeria.
“Let us do what we can to try to reduce the deficit and how we can reduce borrowing. Now to the next point on the issue so borrowing. There is nothing wrong with borrowing provided we borrow and put it for production not for consumption. So as we begin to look at it let us take the future generations of Nigeria into consideration while we get to borrow and make sure the borrowing are being put into productive ventures.
“While we put the money borrowed to infrastructure three clear things come to mind. We have looked at security. We need to invest in power. Let us borrow to invest in power and roads. We have road challenges across the country. Let me use for instance Mr. Speaker, the Calabar-Itu road that area is being cut-off. People spend 8 hours on the road. And we have seen something less than a billion naira allotted to that road in the different lots that have been given. That is quite inadequate. We have to invest in our road and in our public transportation.
“We are talking about recoveries of loot and misappropriated funds, if we apply these it can help in reducing our deficits and borrowings. I don’t know whether these loots are still in the stomach of snakes or rats or animals. But if we apply these loots it would be to the better of the country.
“Finally the pegging of oil price at $57 per barrel is totally quite very low. It is not sustainable. Permit to add that in the last three years since 2018, we have had a year high at an average of about $60 per barrel. So we should be advocating that there should be the upping of the pegging of $57 per barrel to $60 per barrel.
“In 2018, the year high was $77.41 cents per barrel. 2019 it was $66.24 cents. In 2020 it was $63.23 cent. As of today, the Brent is $83.27 cents. Bonny bright is $82.30 cents. So we can have an average of 60 dollars per barrel and that would be sustainable for us.
“The target of 13 percent inflation is not feasible, but what is achievable is that we should try to have a mechanism that would address the cost of food, cooking gas, and electricity bill. In this case, there should be provision for meters and we should make sure we cater for Nigerians in this regard,” he noted.
In his lead debate, Majority Leader, Hon. Alhassan Doguwa who solicited the support of the House towards ensuring the timely passage of the 2022 Appropriation bill, applauded the Presidency for ongoing efforts toward sustaining the January-December budget cycle and improved infrastructure.
In his remarks, Deputy Chief Whip, Hon. Nkiruika Onyejeocha argued that the present administration would be remembered for full implementation of the budget against the 30 percent budget implementation in the previous administrations.
Other lawmakers, who spoke during the debate, urged MDAs to ensure implementation of budget and reflect gender responsive programmes, review procurement processes with a view to avoiding late implementation of the budget, avoid diversion of funds released and ensure prudence during the implementation of the budget.
They also stressed the need for Standing Committees to investigate how money allocated to various intervention programmes were utilized, and the need for upward review of proposed fund for road projects adding that the Ministry of Works was having N640 billion outstanding certificate against the N280 billion proposed for roads in the 2022 budget estimates, stressing that N500 billion was needed for the road sector.
The lawmakers also tasked the House on the need to ensure adequate funding of education (3.6% of the 2022 budget), health and research, among others.
They also underscored the need to put necessary measures in place to ensure recovery of debts owed by about 77 oil companies owing the country should be looked into with the view to recover the fund to improve the economy, adding that necessary sanctions should be put in place to serve as deterrent.
Nigerian Stockbrokers have proposed strategies by which the Federal Government can deepen the capital market to achieve its proposed one trillion dollar economy.
They made the proposal in a communique signed by Mr Oluropo Dada, President/Chairman of Council of Chartered Institute of Stockbrokers (CIS), and the Registrar/Chief Executive of CIS, Dr Josiah Akerewusi.
The communique was from the 28th Annual Conference of CIS held in Ibadan with the theme: “Capital Market as Catalyst for The One Trillion Dollar Economy’’.
Dada said that, if adhered to, the proposed strategies would help the government to achieve its goal without increasing borrowing.
He urged the Federal Government to list Nigerian National Petroleum Company Ltd.
and moribund state enterprises on the secondary markets.According to him, this is to deepen the markets, enhance the companies’ ability to make profit and generate revenue for the government through tax.
The CIS president also said that there was the need to rebase Nigeria’s Gross Domestic Product (GDP) to reclaim the country’s status as Africa’s largest economy to create opportunities to achieve the one trillion dollar target.
Dada urged policies that would incentivise indigenous and privatised companies as well as Small and Meduim Enterprises (SMEs) to list on the Nigerian capital market.
He said that the informal economy constituted a significant portion of Nigeria’s GDP but remained largely untapped by the capital market.
“Government should conclude the ongoing review of Investment and Securities Act while capital market regulators should review relevant rules and laws in line with global best practices,’’ he said.
According to him, this will boost investor confidence, create a favourable business environment for listed companies and remove restrictions hindering liquidity access for stockbrokers.
“The Nigerian capital market should be integrated into Fintech solutions, blockchain technology and other digital innovations to enhance accessibility, efficiency, transparency and attraction of Millennials, Gen Z, Gen Alpha, among others.
“Market operators should also develop products that attract investment appetite of the technology-savvy youths,” he said.
According to him, the government should address foreign exchange challenges and other inhibitions to participation of foreign investors in Nigeria.
“This will also enhance Foreign Direct Investment.’’
Dada said there was a huge knowledge gap among investors, urging that financial literacy programmes should be pursued with renewed vigour.
He said that financial literacy should cut across all segments of investors and would require collaboration of market regulators with all stakeholders.
He said: “The Nigerian capital market should reflect the key sectors such as agriculture, oil and gas to better align with GDP composition and provide opportunities for capital formation and mobilisation.
“Government at all tiers in Nigeria should leverage more on the capital market to raise long-term funds for infrastructure development,’’ he said.
Dada said that this should be done by issuing project-tied bonds with irrevocable standing payment order which would remove the risk of default.
“In order to relieve itself of perennial debt overhang, Nigeria should opt for debt restructuring and extension of maturity period to enable it to manage its resources for the overall development of the economy.
“On the monetary side, the Central Bank of Nigeria should intensify tight monetary policy to control inflation.
“Government should exploit opportunities in the commodities ecosystem to grow the GDP. Commodities Ecosystem remains a niche market in Nigeria.
“Government should implement the policies enunciated to strengthen commodity trading and commodity exchanges to enhance export trades, generate forex, boost external reserve and strengthen the Naira.’’
According to him, government should also implement structural reforms, including deregulation, debt management and public awareness campaigns by collaborating with the market stakeholders to unlock Nigeria’s economic potential.
Dada said that the government should put in place policies to attract private equity, venture capitalists and angel investors, adding that at all tiers of the government should leverage tariff policies to support local industries.
This, he said, would pave way for participation of private equity, venture capitalists and angel investors to support the growth of SMEs. (NAN)
Mr Adegboyega Oyetola, the Minister of Marine and Blue Economy says upgrading the Maritime Academy of Nigeria (MAN), Oron to a university, will unlock opportunities in the maritime economy.
Oyetola made the expression at the 2024 MAN cadets graduation ceremony in Oron, Akwa Ibom on Saturday.
Represented by Mr Babatunde Bombata, the Director, Maritime Safety and Security, the minister said the Federal Government was working assiduously to unlock opportunities within the marine and blue economy.
He said that the ministry was already collaborating with the Ministry of Education and the Nigerian Universities Commission to ensure MAN’s seamless transition to a university.
“It is our hope that this upgrade will unlock new opportunities for advanced learning, cutting edge research and innovation within the marine and blue economy fields,” he said.
Oyetola urged the graduating cadets to be innovative, resourceful and forward looking in their future endeavours.
“The maritime and blue economy sectors are filled with opportunities, so your contributions to the sector will be instrumental in ensuring a brighter future.
“The government is committed to fostering excellence and innovation in these fields, and we eagerly anticipate the positive impact you will make in your careers,” he said.
He further said that the Federal Government was working on developing a national policy on marine and blue economy.
“This policy will serve as a strategic framework to drive economic diversification, attract investments, create jobs and youth empowerment.
In his remarks, Gov. Umo Eno of Akwa Ibom, said the state government would continue to collaborate with the academy to develop the maritime sector.
Represented by the Commissioner for Internal Security and Waterways, Gen. Koko Essien, (Rtd), Eno urged the graduating cadets to utilise their training in developing the maritime sector.
“I am hopeful that you will utilise the training you have acquired here to further your career as seafarers and in the development of our blue economy,” he said.
Eno commended the Acting Rector, Dr Kevin Okonna and his management team for their commitment towards repositioning the academy for greater results.
Earlier, Okonna said that graduates of the institution had contributed immensely to the growth of Nigeria’s maritime and blue economy.
“Today, we have an opportunity to celebrate a new set of well-trained personnel to the maritime and allied industries.
“We pride ourselves as the pioneer maritime training institution, this is because of the institution’s contributions to national development,” he said.
The acting rector urged the graduating cadets to made effective use of the knowledge gained during their training to make meaningful impact on the growth of the maritime sector.
Report says that awards were given to graduating cadets who distinguished themselves in character and learning. (NAN)
The Nigerian Exchange Ltd. (NGX) continued its bullish trend on Wednesday, gaining N183 billion.
Accordingly, the market capitalisation, which opened at N59.532 trillion, gained N184 billion or 0.31 per cent to close at N59.715 trillion.
The All-Share Index also added 0.31 per cent or 303 points, to settle at 98,509.
68, against 98,206. 97 recorded on Tuesday.Consequently, the Year-To-Date (YTD) return increased to 31.
74 per cent.Gains in Aradel Holdings, Zenith Bank, United Bank For Africa(UBA), Oando Plc, Nigerian Breweries among other advanced equities drove the market performance up.
Market breadth closed positive with 34 gainers and 17 losers.
On the gainers’ chart, Africa Prudential, Conoil and RT Briscoe led by 10 per cent each to close at N14.30, N352 and N2.42 per share, respectively.
Golden Guinea Breweries followed by 9.95 per cent to close at N7.18, while NEM Insurance rose by 9.74 per cent to close at N10.70 per share.
On the other hand, Julius Berger led the losers’ chart by 10 per cent to close at N155.25, Secure Electronic Technology Plc trailed by 9.52 per cent to close at 57k per share.
Multiverse lost 7.63 per cent to close at N5.45, Haldane McCall dropped 6.07 per cent to close at N4.95 and Honeywell Flour shed 5.62 per cent to close at N4.70 per share.
Analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 49.44 per cent.
A total of 320.10 million shares valued at N6.48 billion were exchanged in 7,943 deals, compared with 939.41 million shares valued at N12.81billion traded in 9,098 deals posted in the previous session.
Meanwhile, ETranzact led the activity chart in volume with 70.27 million shares, while Aradel led in value of deals worth N1.22 billion.(NAN)
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