Adeosun: FG to borrow $2.3bn from World Bank, China
Omololu Ogunmade in Abuja and Obinna Chima in Lagos with agency report
The March 8 deadline set by the Senate for the passage of 2017 budget is no longer feasible, as the chairmen of the sub-committee on the Appropriation Committee tuesday complained that the three weeks set aside for budget defence had exposed fundamental flaws in the document.
At a closed-door session held between the principal officers of the Senate and all the committee chairmen tuesday, the senators said contrary to the belief that this year’s budget was better packaged than that of last year, the budget was actually a “mess”.
THISDAY was told after the meeting that the sub-committee chairmen complained that the details of the budget had shown that several ministries, departments and agencies (MDAs) did not learn any lessons from the discrepancies that characterised the 2016 budget.
The chairmen were reported to have informed the Senate President, Senator Bukola Saraki, that they could no longer meet the deadline set for the conclusion of the budget process because the document was characterised by inconsistencies, shortfalls in the spending for 2016 appropriations, and failure or inability of the MDAs to explain how the funds were disbursed.
THISDAY further learnt that the tale of woes by the committee chairmen compelled the Senate President to head for the Presidential Villa after the meeting yesterday to relay the Senate’s concern over the budget.
THISDAY further learnt that the Minister of Finance, Mrs. Kemi Adeosun, was put on the spot on Monday when she appeared before the Senate Committee on Finance where she was confronted with the flaws in the budget.
The minister, it was learnt, was challenged over her failure to provide details of the budget proposal including the breakdown of the figures in the budget.
At the end of her meeting with the committee, she was told to come back with the budget details and breakdown of some proposed expenditure.
Among the details that the executive was accused of failing to provide, included proposals on the N500 billion proposed for the social intervention fund and N100 billion proposed for housing, among others.
However, it was also learnt that the minister did not show an understanding of the issues raised by the senators and felt that the Senate by its handling of the budget was attempting to usurp her power as the finance minister.
It was also learnt that the committee chairmen also decried the failure of a number of heads of MDAs to appear before the Senate committees and consequently complicated the budget process.
The MDA heads were alleged to have stayed away and opted to send representatives for fear of being put on the spot over allegations of budget padding.
The senators named the Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami, among the heads of MDAs who stayed away during the budget defence.
The highlights of the stalemate identified by senators during the budget defence included a sharp disagreement over N700 million in the budget by the Budget Office and Debt Management Office (DMO).
In the end, it was learnt that the meeting resolved that the sub-committees should carry out a lot of engagements with the MDAs with a view to helping them to clean up the discrepancies in the budget.
The senators’ submissions at the meeting appeared to have confirmed the report of civil society organisations submitted to the National Assembly last week that the budget was full of fraudulent and frivolous proposals.
A coalition of CSOs under the aegis of Citizen Wealth Platform (CWP) had at the opening of a three-day public hearing organised last week by the National Assembly on the 2017 budget, said it had uncovered a range of frivolous, inappropriate, unclear and wasteful expenditure proposals in the budget.
According to the group, a range of wasteful, duplicated and needless proposals, amounting to N151.536 billion had been identified in the budget which it wanted the National Assembly to expunge.
The group further reported that a number of proposals for which funds had been appropriated in 2016 budget were again smuggled into the 2017 budget.
On this basis, the committee chairmen were said to have reported yesterday that a number of questionable proposals found in the budget included fake items such as computers and other items that were duplicated.
Nonetheless, the meeting was said to have resolved that the sub-committees should speed up the budget process and ensure its completion by the end of February so that the Appropriation Committee can receive their reports at the end of the month.
Also, the Senate did not hold plenary session yesterday but only met, read the correspondence that had sent to them during its recess, and adjourned till today in honour of a member of the House of Representatives from Marshi constituency in Katsina State, Hon. Sani Bello, who passed on February 15.
FG to Borrow $2.3bn from World Bank, China
Meanwhile, the Minister of Finance has disclosed that the federal government wants to borrow at least $1 billion from the World Bank and will sign within months a $1.3 billion loan from China to fund railway projects.
Africa’s biggest economy needs to plug a gap in its record N7.3 trillion 2017 budget, which boosts capital expenditure by a quarter to end its first recession in 25 years due to low oil prices.
The government has been in talks with the World Bank for a year and wants to finalise this month a reform proposal necessary for a loan application, according to officials.
“We expected to borrow at least $1 billion,” Reuters quoted Adeosun to have said when she was asked about the talks with the World Bank on a CNBC programme.
“There is also some possibility of doing sector specific intervention in the power sector, they are working very closely with us on power,” she added, without being more specific.
Nigeria had initially promised to submit an economic plan to the World Bank by the end of December but did not do so, sources told Reuters last month.
Adeosun also said Nigeria had been offered a $1.3 billion loan by China’s state Export-Import Bank (Exim) to fund railway projects.
Nigeria will also present a reform proposal to the African Development Bank (AfDB) to release a second loan tranche of $400 million, officials have said.
AfDB had paid out a first tranche of $600 million but has held back the rest pending reforms. Its president has criticised hard currency curbs hitting investment.
On Monday, the central bank made a step towards reforms by devaluing the naira for retail customers. President Muhammadu Buhari had objected to devaluation, but he is away on sick leave.
Adeosun also said the government wanted to harmonise policies with the central bank and that non-oil revenues were improving, without giving details.
She also said there was no need for a loan from the International Monetary Fund (IMF).
“The IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems per se, it has a fiscal problem.”
Adeosun also said one or two banks were yet to remit state revenues via a Treasury Single Account (TSA) at the central bank created in 2015 to combat corruption.
“Interestingly our whistleblowing programme (to track down graft) actually picks up tips that bankers were being instructed to rename accounts when they knew that the money belongs to the federal government.” She did not name the banks.