AMID concerns raised by senators on the nation’s dwindling economy and heavy borrowing by the Federal Government, the Senate, yesterday, approved the sum of N4.28 trillion to fund the N13.08 trillion 2021 budget deficit of N5.19 trillion.
With the approval, debt service estimate now hits the sum of N3.12 trillion, just as 2021 debt service estimate is far higher than the 2020 and was pegged at N1.58 trillion.
The Senate explained that the 2021 budget would be based on key assumptions, including 1.86 mbpd daily crude oil production and the benchmark oil price of USD$40 per barrel.
It also approved an exchange rate of N379/US$ while the projected GDP growth rate of three percent was adopted and the projected Inflation rate of 11.95 percent was also approved.
The approval of the Senate followed the debate of the report of the joint Committee on Finance and National Planning and Economic Affairs on the 2021-2023 Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP, chaired by Senators Solomon Adeola (APC, Lagos West) and Olunbunmi Adetunmbi (APC, Ekiti North).
Approving the 2021-2023 MTEF and FSP, the Senate retained the sum of N7.89 trillion as revenue for the Federal Government in the 2021 fiscal year.
According to the Senate, the N13.08 trillion approval is made up of Recurrent (Non-debt) expenditure of N5.66 trillion; Personnel Costs (MDAs) of N3.05 trillion; Capital expenditure (exclusive of Transfers) of N3.58 trillion; Special Intervention (Recurrent) amounting to N350 billion; and Special intervention (Capital) of N20 billion.
Meanwhile, the Senate has resolved to commence immediate legislative work to amend the Fiscal Responsibility Act (FRA, 2007) to improve revenue generation and remittance capacity of agencies of the Federal Government, with particular attention to Section 21 (1) and Section 22(1)(2).
Relevant Standing Committees were directed to take immediate steps to examine the laws guiding the operations of all revenue generating agencies under their oversight to determine specific sections/clauses requiring amendment with a view to plugging wastages and boosting revenue generation capacity of government.
The Senate urged the Federal Government to streamline all stamp duty collection activities by the MDAs and domicile with FIRS, to eliminate loss and deploy the use of ICT in the collection of these stamp duties.
It also urged the Ministry of Finance, Budget and National Planning, as well as the Budget Office of the Federation to re-examine the assumptions underlying the revenue targets of all the Federal Government agencies, to ensure the credibility of such assumptions, and the figures arising therefrom.
The upper legislative chamber also charged the Federal Government to constantly consider carefully, the qualifications and suitability of heads of agencies to ensure that the overall revenue objective of government in the MTEF/FSP and the annual budgets are always achieved.
The Senate added that “There is a need to institute sanctions for inability to meet revenue targets, where it is established that there are no visible constraints for such non-performance, whilst positive performance in revenue generation by MDAs should be rewarded.”
It also urged the “Nigeria National Petroleum Corporation, NNPC, to device strategies to reduce the corporation’s average cost of production in accordance with the international best practices, which currently hovers at $31 barrel per day.”
It charged the Federal Government “to ensure that all Ministries, Departments and Agencies, MDAs, pay in full and promptly, for services rendered by other agencies of government, except where it is established that the beneficiary agencies are statutorily exempted from such payments.