The Senate on Wednesday advised the Federal Government to consider other options of funding projects and cautioned against excessive borrowing in order to preserve the economy.
It also approved N4.28 trillion loan (foreign and local) under the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper, subject to the provision of details of the borrowing plan to the National Assembly.
The red chamber advised the government to consider scrapping some agencies that had outlived their objectives in order to reduce the cost of running the government.
The Senate President, Ahmed Lawan, handed over the caution at the plenary after considering the report of the 2021-2023 MTEF/FSP presented by the Chairman of the Senate Committee on Finance, Solomon Adeola.
Lawan said, “There are other sources of funding such as Build Operate and Transfer (BOT), Public and Private Partnership (PPP) and many other other options we can explore so that we minimise borrowing.
“There are lots of countries and businesses that are interested in our infrastructure development.
“But then again, we cannot eliminate borrowing, that is the sad part of it. In the past we have deluded ourselves thinking Nigeria is the richest in the world whereas we failed to develop our infrastructure. If we had applied whatever we earned before, especially in our good days we would have found out that we didn’t have enough money to spare to call ourselves the richest.
“There were more challenges on our development that what we were earning but we squandered our riches that our contemporaries are now far ahead of us in terms of development.
“We have to mix borrowing with diversification of how we go about funding our development needs.
“The deficit of proceeds is high and this is telling us the history of our economic journey. We simply could not figure out the right thing to do when we had plenty of it. We didn’t save for the rainy day. We need to look at possibilities of reducing our borrowing so that we don’t incur so much deficit and we end up using our revenues servicing the debt.”
“When we talk about cost of governance we think of merging different agencies. We know what to do but when it comes to doing the right thing we lack the political will. I think the time has come for government to address this issue.
“There are so many agencies. These are agencies that some were created to address specific challenges, now they are irrelevant. They are simply conduit that will be given money every year to stay afloat while they have no value to add to the government.”
Lawan said government needed to look into scrapping some of the agencies in order to save cost of running of government.
He said government needed to find a way around although the time was not right for people to lose their job.
He, however, cautioned that it should not be taken as an opportunity for people to seek to cut down the budget of the National Assembly which he put at N128bn out of over N13 trillion.
“We need to have a holistic way of considering how we can reduce agencies and cost of running the agencies that will survive.”
The senate after deliberating the MTEF report approved that the daily crude oil production of 1.86million barrels per day (bpd), 2.09mbpd, and 2.38mbpd for 2021, 2022 and 2023 respectively, be approved, in view of average 1.97mbpd over the past three years and the fact that a very conservative oil output benchmark had been adopted for the medium term in order to ensure greater budget realism and disruptions due to attacks/sabotage in the Niger-Delta which has substantially abated for a while.
It also approved the benchmark oil price of USD$40 per barrel and the exchange rate of N379/US$ proposed by the Executive for the 2021-2023.
It also approved the projected GDP growth rate of 3.00%, given the Federal Government’s response fiscal policies adapted specifically to contain the damage from Covid-19, including the N500billion stimulus fund.
It approved the projected Inflation rate of 11.95% and the fiscal deficit estimate of N5.19 trillion (including Government Own Enterprises.
The senate also directed 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.
