Buhari seeks NASS approval to borrow $29.96bn

Buhari seeks NASS approval to borrow $29.96bn
October 26 06:18 2016

President Muhammadu Buhari has sought the approval of the National Assembly for his external borrowing plan of $29.96 billion.

According to two letters the President sent to both the Senate President, Dr Bukola Saraki and House of Representatives Speaker, Yakubu Dogara, the  fund was needed  for the execution of key programmes and infrastructural projects in the 2016 budget till 2018.

The President also sought legislative approval for virements totalling N180.8bn in the 2016 budget to take care for votes by some sectors of the economy.

“The total cost of the projects and programmes under the borrowing (rolling) plan is $29.960bn, made up of proposed projects and programmes’ loan of $11.274bn; special national infrastructure projects, $10.686bn; Eurobonds, $4.5bn; and Federal Government budget support, $3.5bn.

“Considering the huge infrastructure deficit currently being experienced in the country and the enormous financial resources required to fill the gap in the face of dwindling resources, and the inability of our annual budgetary provisions to bridge the deficit, it has become necessary to resort to prudent external borrowing to bridge the financing gap, which will largely be applied to key infrastructure projects, namely power, railway and roads projects, among others,” Buhari stated in the letters.

In the N180bn virement request, the President noted that it would involve the transfer of the money already appropriated for special intervention programmes, both recurrent and capital, to critical recurrent and capital items.

The request, he said, was necessitated by shortfalls in provisions for personnel costs, inadequate provision for the Amnesty Programme, continued requirements to sustain the war against insurgency, and the depreciation of the naira.

The President’s letter on the subject read in part, “In the course of implementing the 2016 Appropriation Act, several MDAs have presented issues pertaining to salary shortfalls, the settlement of part of which has led to the depletion of the public service wage adjustment. This vote, which had a provision of N33,597,400,000, now has a balance of N2,758,296,000.

“The Committee on Salary Shortfalls, set up by the Minister of Finance, has come up with a figure of N41,875,983,020 as the amount required to settle salary shortfalls of non-lPPlS MDAs. Similarly, most of the lPPlS (Integrated Payroll and Personnel Information System) MDAs have already been notified by the Office of the Accountant-General of the Federation that they would soon be locked out of the IPPIS platform, as their personnel cost budgets would not cover salaries for the rest of the year.

“The contingency vote of N12bn has a balance of only N1,827,570,443. It is considered necessary to augment this vote in the light of frequently emerging contingencies. Only N20,000,000,000 (already fully released) was provided in the 2016 budget for the Niger Delta Amnesty Programme. Consequently, the allowances to ex-militants have only been paid up to May 2016. This is creating a lot of restiveness and compounding the security challenge in the Niger Delta.”

“The provision for the NYSC (National Youth Service Corps) in the 2016 budget is inadequate to cater for the number of corps members to be mobilised this year. In fact, an additional N8.5bn is required to cover the backlog of 129,469 corps members who are currently due for call-up but would otherwise be left out till next year due to funding constraints. Similarly, the provision for meal subsidy for the Unity Colleges is inadequate for the number of students in the schools.”

A breakdown of the virement proposal showed that N71.8bn is for public service wage adjustment; N35bn for the Amnesty Programme; N19.8bn for the mobilisation of remaining batches of youth corps members for the year, among others.

The letter added, “You may also wish to be informed that the Federal Ministry of Power, Works and Housing has also requested for the virement of the sum of N300m appropriated under the 2016 appropriation of the Transmission Company of Nigeria for the construction of the 132KVA substation at Gwaram, Jigawa State, with Project Code No. TCN 018023829, and the construction of two units of 60MVA 132/33 in Gagarawa, Jigawa State.

“However, it was observed that while the line to be vired from exists in the budget book published by National Assembly, the lines to be vired to do not exist. It is, therefore, recommended that the sum of N300m meant for the construction of the 132KVA substation at Gwaram, Jigawa State be vired to budget line TCN 018021775 for the reconstruction of fallen transmission towers and replacement of glass insulators, etc., which have an appropriation of N4,880,000,000.”