The Defence Headquarters (DHQ) on Monday said the N100 billion proposed in the Armed Forces Support Trust Fund Bill would be inadequate to address the worsening insecurity across the country.
Director of production, DHQ, M. A. Yakubu (air vice marshal) said this at the public hearing on the Armed Forces Support Trust Fund Bill organised by the House of Representatives committee.
The bill which passed second reading last year seeks to create a five-year funding plan for the Nigerian Armed Forces, outside the annual budgetary allocations to help in the war against insecurity.
It proposed that the support fund would be derived from an amount constituting one percent of the total money accruing to the Federation Account and 0.5 percent of profit made from the investment of the National Sovereign Wealth Fund (NSWF) by the Nigerian Sovereign Investment Authority (NSIA), 1 percent of Value Added Tax (VAT) remitted to the Consolidated Revenue Fund (CFR), amongst others.
Yakubu while presenting the position of the DHQ said fluctuating exchange rates sometimes makes it impossible to fund procurement of equipment already signed for, forcing the armed forces to run back to the federal government for interventions.
He said: “The maximum we have received from 2017 to date in capital allocation for the air force was about N44 billion per annum. Convert that at the current exchange rate. How many years do you need to gather $500 million to buy just 12 aircraft? Look at the expanse of land we are required to cover? Nigeria is over 920, 000 square kilometres. Every inch of the land needs to be covered by either surveillance or capability to attack.
”We are estimating something in the range of N100 billion per annum. Convert that to dollars because virtually all the equipment are imported. This will go nowhere. And it would not address the problem we are seeking to address unless we expand the sources.
“If we are not able to raise a minimum of $2 billion per annum in the next three years for a start, subsequently maybe we can begin to taper down the percentages. But for a start, we need a bulk sum because many of these manufacturers of equipment require 100 percent down payment to even start production.
“So you cannot sign a contract, for example, with the US manufacturers and pay 15 percent mobilisation as required by the procurement act. Nobody would look at you. Their terms must be followed. Many times we are asked to pay 100 percent”.
On his part, director-general, Defence Research and Development Bureau, U.P Uzezi (air vice marshall) insisted that research and development be taken more seriously so that the required military hardware can be produced locally.
“This bill is very needed at this point in time in the history of our country, bearing in mind the national security challenges we are facing. I was thinking to myself how we are going to achieve this local production without adequate research that is being done to encourage local production. I did not find one. Of course, it is implied in the bill but not explicitly capture. I thought that R&D should be included as one of the priorities in this bill, explicitly captured.
“There are many research institutes but they have suffered and they have been able to achieve a lot because of this singular inadequate funding.”
While declaring the public hearing open, speaker of the House, Femi Gbajabiamila represented by the majority leader, Alhassan Ado-Doguwa explained that the bill was informed by the dwindling resources available to the Armed Forces of Nigeria to carry out its various security operations.
“This bill seeks to provide an injection of additional capital funding for the Armed Forces of Nigeria at a crucial time in our nation. I am sure many of you will wonder why the Armed Forces of Nigeria need an additional financial injection at this time.
“The fact-based on appropriation records is that about 91 percent of the current funding to the armed forces go on recurrent overhead, salaries and welfare, leaving only 9 percent for capital purchases. This reality has prompted this 9th House of Representatives to seek a way of providing funds that will be focused on the capital needs and training of our armed forces”.
Chairman of House committee on defence, Benson stated that the current annual budgetary allocation remains inadequate, considering the ongoing expansion by the armed forces in terms of personnel and the provision of platforms, weapons and equipment to sustain its ever-increasing operations.
“Efforts in the past by the armed forces of Nigeria to procure the needed military hardware and provide requisite training to meet the challenges currently being faced have hit the brick wall due to limited financial resources. This also underscores the immense importance of this bill.”
