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.Justifies N1.767 trillion borrowing plan
…As NNPCL, FIRS, Customs, others surpass revenue targets
Revenue generating agencies of government, on Monday, told the National Assembly that the Federal Government only borrowed funds approved by the National Assembly, as it is the only arm of government with power of approval.
The agencies threw the challenge when the Senator Sani Musa-led joint Committees took them up on why the Federal Government was still seeking foreign loans despite the high increase of Internally Generated Revenues (IGP).
The Federal Government also justified its plans to borrow a whopping sum of N1.767 trillion (approximately $2 billion) to augment its expenditure in the 2025 Appropriation Bill due to be presented to the National Assembly before the end of the year.
The Minister of Finance and Coordinating Minister for the Economy, Mr Wale Edun while addressed the issue at a meeting with the Joint Committee on Finance, Budget and National Planning on 2025- 2027 Medium Term Expenditure Frame Work (MTEF) and Fiscal Strategy Paper ( FSP) said all over the world including the United States, borrowing is an integral aspect of budgeting.
He said countries and corporate organisations borrow in order to fill gaps created by the shortfall in revenue and to ensure the execution of critical projects proposed in a given budget cycle.
The explanation followed observations and criticisms from a cross-section of legislators on the continued resort to borrowing every budget year even after the revenue-generating agencies had surpassed their targets.
At the meeting, revenue-generating agencies such as the Nigeria Customs Service, Nigeria Ports Authority and the Federal Inland Revenue reported that they had already surpassed their targets for the 2024 Budget and were optimistic they would repeat the same feat in the coming year.
First to make the submission, was the Comptroller-General of Nigeria Customs Service (NCS) Bashir Adeniyi, who said that by 30th of September this year, Customs had raked in N5.352 trillion revenue which is above N5.09trillion targeted for the entire 2024 fiscal year.
Some lawmakers said they were uncomfortable with the recurring borrowing and the mounting debt burden it has imposed on Nigeria.
However, Edun reminded them that the borrowings were not done unilaterally by the executive but usually received the endorsement of the National Assembly.
“The revenue agencies have tried to meet and surpass their targets but we still need to borrow to meet the demands in the budget. These include provisions for health services, social services and social safety nets for the poor and most vulnerable in society.
“The borrowing is also done to provide foreign exchange for production to the extent that we require it for payments and you require it for raw materials. I think that we are trying and we are committed to attracting enough foreign exchange, foreign direct investments,” he said.
Also corroborating the position of the government, the Chairman of the Federal Inland Revenue Service (FIRS), Mr Zaccheus Adedeji. told the lawmakers that the fact that revenue-generating agencies were meeting and surpassing their targets in a given budget cycle does not mean there should be no more borrowing.
Apparently throwing the challenge back to the lawmakers, Adedeji said that while the Executive makes provisions for borrowing, it takes the approval of the National Assembly for the borrowing to be effectual.
“Borrowing is part of what has been approved by the National Assembly for the federal government, meaning that the executive borrows based on approval of the legislature.
“The fact that we meet revenue targets and even surpassed them as revenue generating agencies, does not mean that the borrowing component of an appropriation law, passed by the National Assembly should not be activated”, he said.
The fact that we meet revenue targets does not mean the government can not borrow again. The budget we have has both borrowing and internally generated revenue components. The executive implements the budget as approved by the National Assembly,” Adedeji said.
Senator Adamu Aliero (PDP Kebbi Central), who first asked the question said: “What is the Federal Government doing with excess revenues generated by the various agencies in view of its unending request for for foreign loan approval?”
Giving a similar reason, the Minister of Budget and Economic Planning, Senator Atiku Bagudu, said the federal lawmakers should not forget that the borrowing plans contained in the N35.5trillion 2024vbudget, were primarily meant to fund the deficit which is N9.7 trillion.
“Despite revenue targets surpassing some of the revenue generating agencies, the government still needs to borrow for proper funding of the budget, particularly in the area of deficit and productivity for the poorest and most vulnerable. We have a long-term development perspective plan agenda 2050 aiming at GDP per capita of $33,000”, he explained.
The Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company Limited (NNPCL), Mr Mele Kyari in his own presentation, said the Company exceeded the N12.3trillion revenue projected for 2024 by already raking in, N13.1trillion.
“For the 2025 fiscal year, N23.7trillion is projected by NNPCL to be remitted into the federation account”, he said.
However, the Immigration Service of Nigeria ran into troubled waters at the interactive session over highly lopsided Public Public Partnership arrangements on Passport production, which gave consultancy firm 70% of the proceeds and the government 30%.
The Chairman of the Committee, Senator Sani Musa, ordered Immigration to present all the documents on the unacceptable PPP arrangement to the committee before the end of the week.
“The so-called PPP arrangement must be reviewed or cancelled because Nigeria and Nigerians, are seriously being short-changed”, he raged.
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