• Saturday, June 15, 2024
businessday logo

BusinessDay

Senate approves new budget framework, targets fiscal responsibility

10th Senate @ 1: Any hope for the nation?

Nigerian Senate has approved the Medium-term Expenditure framework for 2024-2026 and Fiscal Strategy Paper (FSP), which contains projections for budget appropriations over the next three years.

The upper legislative chamber approved it after considering the report of the joint committee chaired by Sani Musa, Chairman of the Senate Committee on Finance, during plenary on Wednesday.

The lawmakers approved $73.96, $73.76 and $69.90 per barrel, respectively as benchmark oil prices for daily crude oil production of 1.78 million bpd, 1.80 million bpd, and 1.81 million bpd for 2024, 2025 and 2026.

This is, however, subject to the confirmation of the Nigerian National Petroleum Company Limited on actual and verifiable deliverables.

The Senate approved the federal government’s recommended spending N26 trillion, with N16.9 trillion in retained revenue, a N9 trillion budget deficit, N7.8 trillion in new borrowings (including borrowing from foreign and domestic sources); N1.3 trillion worth of statutory transfers, an estimated N8.2 trillion in debt service; N243.6 billion in the Sinking Fund; N1.27 trillion in pension, gratuity, and retiree benefits

The upper chamber also approved the exchange rate of N700 to $1, 665.61 to $1, and N669.79 to $1 as proposed by the executive for 2024, 2O24, and 2026 respectively.

During debates on the report, some lawmakers proposed that the exchange rate be increased to N900 to reflect current realities, but when put to a voice vote, lawmakers agreed that the committee’s report should be sustained.

Read also Senate to review Nigeria’s financial services sector laws for economic sustainability

The Senate recommended that all items locally produced for the Nigerian Market be outrightly banned from importation and customs tariffs be amended accordingly.

The Red Chamber approved that the Central Bank of Nigeria should ensure that banks can access dollars to prevent patronage at the parallel markets.

That Senate also approved a Gross Domestic Product (GDP) growth rate of 3.76 per cent, 4.22 per cent, and 4.78 per cent in 2024, 2025, and 2026; and an Inflation rate of 21.4%, 20. 3% , and 18.6 % for 2024, 2025 and 2026 respectively.

The Senate further approved that the federal government’s target-setting approach and its determination to enhance the major revenue-generating agencies’ collection efficiency to support the fiscal deficit estimate of N9 trillion is noted and hereby approved;

The N7.8 trillion in new borrowings—both domestic and foreign be supported as well, given the country’s current effective debt management strategy, which has moderated borrowing costs and decreased the amount of short-term debt in the portfolio and refinancing risk;

The Senate further approved that the MTEF/FSP document’s ancillary parameters listed below for 2024–2026 should also be maintained.

The National Assembly begins the process of amending the Fiscal Responsibility Act (FRA, 2007) to enhance the agencies’ ability to enforce fiscal responsibility and impose sanctions on erring staff. Specifically with regards to Sections 21 (1) and 22 (1)(2);

The National Assembly’s Standing Committees take prompt action to review the laws governing the activities of all revenue-generating agencies under their purview to identify specific sections or clauses that need to be amended to plug the loophole of wattage and increase the government’s capacity to generate revenue;

The federal government agencies should ensure the deployment of ICT in the collection of oil revenues by MDAs, including stamp duty to block loopholes of leakages;

That the subsidiaries of NIPOST are irregular and illegal should be wound up and deregistered. It advised that N10 billion released by the ministry of finance for the proposed NIPOST restructuring and recapitalisation be investigated and the funds fully recovered if established to be injudiciously utilised.

During the debate, Lawmakers resolved to step down the recommendations on NIPOST to carry out further investigation. Still, Deputy Senate Jibrin Barau urged that the House had already passed it and, given the urgency, it should allow it to go, but an investigation should be carried out.

The Senate further recommends that the Federal and Ministry of Finance’s budget office reevaluate federal agencies’ income targets to confirm the veracity of those assumptions and effects.;

The federal government should continuously assess the performances of agencies in to ensure that their targets are met;

That All MDAs pay for services provided by other government agencies and in full unless they are exempted; That the Ministry of Finance Incorporated (MOFI) examines the activities of all agencies currently operating

The BPP Act should be amended to remove the clauses that cause conflicts with MOFI, where MOFI should be authorised as the custodian of all FG Assets.

NNPCL should work towards reducing its production and operational costs to increase revenue of the

All tax waivers not directly linked to NGOs and not-for-profit organisations should not be granted, and relevant committees of the Senate should investigate all tax waivers from 2015.

After due deliberations, the report was put to a voice vote and passed by the Upper Legislative Chamber.