LAGOS — Major stakeholders in the polity, including the Nigeria Labour Congress, NLC, Nigeria Employers Consultative Association, NECA, and Labour Party, LP, among others, were up in arms yesterday with the National Assembly for jerking up the 2024 budget by N1.2trillion.
Recall that President Bola Tinubu had sent a budget proposal of N27.5 trillion to NASS for approval but the lawmakers on Saturday increased it to N28.78 trillion before passing it into law.
Though the Speaker of the House of Representatives, Tajudeen Abbas, and chairmen of the appropriation committees of the two arms of the National Assembly, Adeola Solomon (Senate) and Abubabar Bichi (House of Representatives) had explained why the increase was necessary, the stakeholders would have none of that.
Speaking with journalists after a Christmas homage to President Bola Tinubu in his residence in Lagos yesterday, the speaker, Tajudeen Abbas, assured that Nigerians should expect a notable difference in budget implementation, once President Tinubu signs the 2024 appropriation bill into law, adding that the N28.78 trillion harmonised budget passed by the National Assembly on Saturday would define Tinubu’s administration as people-centric.
According to him, “after we received the budget proposal, we worked extra hours, no weekends, no breaks, even during Christmas we had to work to ensure that we’re able to deliver on our promise to Mr President that the budget will be passed before the end of the year.
“It’s a lot of sacrifice put into this work but to God be the glory, we’re able to deliver and we delivered well,” he said.
On the adjustments made in the budget from N27.5 trillion presented by the President to N28.78 trillion passed by the House and the Senate, the speaker noted that the lawmakers diligently scrutinized every aspect of the budget.
He said: “We expect the budget to deliver because there’s no sector that we did not cross-check, scrutinize, and we made enquiries as to what is required to make the desired impact to the economy and to the people.
‘’I assure you that by the time the 2024 appropriation is signed into law, and we start implementing it, Nigerians will see the difference.
‘’This is a budget that is going to define the Tinubu administration’s commitment to the people of this country. “
Recall that at a briefing after the passage of the budget on Saturday, Chairman of the Appropriation Committee of the Senate, Adeola Solomon and his colleague in the House of Representatives, Abubakar Bichi, Adeola, had said the budget was increased based on current economic realities.
Adeola had said: “The government has just removed fuel subsidy; the government is also intensifying efforts to unify the exchange rates that we usually have and that comes with a lot of price and Nigerians are paying dearly for it in terms of price of fuel and the dollar rate.
“When we got the budget document, the President implored us to interrogate and investigate it and make sure that we come up with a document that is all-encompassing and can suit the needs and yearning of Nigerians.
“To start with, the increase in budget has to do with the issue of the exchange rate differences.
“The current rate of the dollar at the black market is between N1,200 and N1,300 and in the Central Bank of Nigeria, it is between N950 and N1,000, and we have a budget, which was pegged at N750; if you look at the gap, you’d realise that it has covered a lot of gaps already.
“Again, we did some external consultations, most especially in the area of oil benchmark and petroleum resources; if we had gone in that line, we’d have pegged it at N850/N900 to a dollar and we agreed that we wanted to be conservative in our approach so that nobody will think that we want to increase the budget for any ulterior motive. That was why we left it at N490 billion out of which N44billion is for statutory transfers; so effectively, the increment is about N446 billion that is going into the Federal Government’s pocket as consolidated revenue.
“So, you can see that what necessitated our action is the economic reality and what is obtainable in both the black and open markets.”
Withhold assent, NLC tells Tinubu
But reacting to this yesterday, the Nigeria Labour Congress, NLC, expressed outrage over the increase in the budget by N1.2 trillion.
President of NLC, Joe Ajaero, said the labour movement found it difficult to believe that a nation already borrowing to service its debt will allow itself to be dragged down the path of increasing its debt burden which is what the extra budgetary provision entailed.
He said: “The unfortunate news of the National Assembly’s additional N1.2 trillion in the total budgetary expenditure as proposed in the 2024 appropriation bill is not just saddening but highly insensitive for a nation that is already haemorrhaging with its citizens suffering.
“This is despite initial assurances to the contrary by Senator Opeyemi Bamidele, the Senate majority leader.
“For a nation that is already in a fiscal quandary to add extra N1.2trn to its budget, which is nearly five per cent of the entire budget it proposes to spend not on productive or capital projects but on recurrent expenditures, can only be described as fiscally thoughtless.
‘’There may not be any other motive behind this increase except the usual creation of channels to corner public resources into private pockets. We do not see any serious reasons or an exigency that warrants such additions which have every potential of increasing the size of a budget that is already kwashiorkored and burdened by deficits.
“We find it difficult to believe that a nation that is already borrowing to service its debt will allow itself to be dragged down the path of increasing its debt burden which is what this extra-budgetary provision entails for all intents and purposes.
‘’We consider the stated purpose as frivolous and would have been accommodated in the original budget if it was tweaked a little. Those in government must remember the consequences of every one of their actions on the poor and vulnerable, especially on the future of our dear nation.
‘’This nation has already been pushed into a debt trap and it requires creativity and restraint by government operatives to pull us out of its grips.
“We, therefore, urge the President of the Federal Republic to see in this an opportunity to demonstrate to Nigerians that he is truly prepared to combat corruption and close all channels that allow the leakage of our meagre national resources by withholding assent to this bill until the vexatious addition is removed.
‘’We count on the President to protect our nation and ensure that we do not exacerbate an already bad situation. The initial N27.5 trillion as already presented, is sufficient to take care of the extra which Nigerians may already perceive as budget padding for the benefit of a few individuals in government.
“Buhari’s first budget in 2015 was bedevilled by allegations of budget padding. Tinubu’s first budget in office should not be tarnished by another type of padding, so, we plead.”
It’s worrisome, says NECA
Reacting, Nigeria Employers’ Consultative Association, NECA, noted that bogus allocation to items without direct correlation to the listed items above was worrisome.
Director-General of NECA, Adewale-Smart Oyerinde, said this development called to question the seriousness of the administration in pursuing the 7-point agenda of the government.
He said: “While we commend the National Assembly for expeditiously passing the 2024 budget, the general expectation remains that the welfare of the masses, improvement in infrastructure, education, security and health, among other critical budget and developmental items, will take priority over other budget items.
“In line with the need to repair the foundation for local production, we hope greater attention will be given to infrastructure that will aid local manufacturing to boost the capacity of the private sector to create jobs, generate more revenue for the government and reduce the spiralling insecurity situation in the country.
“Bogus allocations to items without direct correlation to the listed items above is not only worrisome but also calls to question the seriousness of the administration in pursuing the 7-point agenda of the government.”
LP faults hefty allocation for NASS, demands priority for welfare, security of Nigerians
On its part, the Labour Party, LP, also picked holes in the miserly allocations to education and health in the passed N28.777 trillion in which the National Assembly earmarked hefty sums for itself.
The party demanded that the President Bola Tinubu-led All Progressives Congress, APC, administration revisit the budget and pay greater attention to the security and welfare of Nigerians in the new year as opposed to its current fixation on the comfort of government officials.
In a statement by its National Publicity Secretary, Obiora Ifoh, the LP said: “As we bid the year 2023 farewell and usher in 2024, we in the Labour Party pray that God intervenes and brings succour to us all as Nigerians have been exposed to uphold hardships because of maladministration and insensitive government in place.
“While we pray, we also enjoin Nigerians to take a closer look at budgetary provisions and sectoral allocations in the 2024 budget.
“Without a doubt, the President-led APC administration has displayed a disdain for the security and welfare of Nigerians.
“Looking at the 2024 budget, we cannot fail to notice the undue attention given to the comfort of those in power to the detriment of the majority of Nigerians.
“Critical sectors of the economy such as education and health were allocated N1.27trn and N1.33trn, representing 7.9 and 4.8 percent of the entire budget respectively.
“This is in a budget which has items such as N3bn for Senate car park; N1bn for constitution review; N78.62bn for the House of Representatives and N36.727bn for the National Assembly Office, N4bn for National Assembly Recreation Centre among other unbelievable allocations.
“Our presidential candidate in the 2023 elections, Mr. Peter Obi, had earlier drawn attention to the misplaced priorities and insensitivity of the President and his party in the allocation of staggering sums for the renovation of the President and Vice President’s offices and trips for them and their hangers on for which a humongous amount of N35.961bn was set aside.
“Nigerians have continued to suffer in the hands of bandits, terrorists, kidnappers and criminals of all sorts but all the administration is concerned about is the comfort of those elected to serve and make life better and more meaningful for ordinary Nigerians.
“It is our hope that those concerned will have a rethink and put the welfare and security of ordinary Nigerians first in the coming year, it is not too late to revisit the 2024 budget.”
Jerking up of 2024 budget, uncharitable, uncalled for —CACOL
Also reacting yesterday, The Centre for Anti-Corruption and Open Leadership, CACOL, Chairman, Mr Debo Adeniran, described the action as “uncharitable, unwarranted” by the lawmakers.
He said: “The problem with our Nigeria political leaders is that they are not realistic with their projection. Even the initial budget proposal is beyond our capacity, we are targeting borrowing to fund the budget.
“Nobody is talking about the effects on Nigeria’s economy and the citizens. Our leaders did not make adequate efforts to retrack all the trapped funds discovered in different parts of the world. They have not taken back Diezeni, Abacha’s loots.
“The jerking up is unwarranted, uncharitable of our leaders. It will put Nigeria into further debts.
Nigerians should be vigilant and ready to take action if the fund is not well utilised for the purpose.”
It will stoke inflation, drive up budget deficit —David Adonri
Also reacting to the increase in the national budget by the NASS, David Adonri, Vice Chairman, Highcap Securities, said that bloating the expenditure would not only stoke inflationary pressure but also increase budget deficit.
He said: “The increase of the proposed budget by N1.2 trillion, amid an excruciating debt burden that FGN is currently bearing, is surprising. Perhaps, NASS assumes that if foreign exchange rate increases to N800/$ in 2024, more revenue will accrue to the government to meet the increase.
‘’This may be counter-productive because rising exchange rate is a major cause of inflation which the government intends to reduce in 2024.
“While commending the NASS for speedy passage of the 2024 budget, bloating it further will increase budget deficit which will in turn increase borrowing and make fiscal policy expansionary while monetary policy is contractionary. This may lead to policy mis-match.
“I hope NASS is not paving the way for further macroeconomic instability by this ill-advised amendment.”
It’ll put more pressure on the currency —Nnamdi Nwizu
Nnamdi Nwizu, co-founder, Comercio Partners Limited, an investment bank, said: “I need to see the full details of the increase alongside the rationale for it . However, from a monetary policy standpoint, more spending means more inflationary pressure and pressure on the currency .
“The adjustment in the exchange rate also points to expectations of the National Assembly on the exchange rate next year , but also means more revenue for the government and they will convert the USD at a higher rate.”
Not bad for economy —Yomi Falana
On his part, a Lagos-based analyst, Mr. Yomi Falana, said: “We have not yet been told the reasons for budget increase. But it is likely to be fueled partly by the increase of foreign exchange rate to $850/$, from the earlier proposed $800/$.
‘’Generally, it is not a bad thing to increase the budget, provided the basis for the increase is good for the nation’s economy.”
It’ll reduce ultimate size of fiscal deficit –Olayinka
However, Tajudeen Olayinka, CEO, Wyoming Capital and Partners, said that the increase will reduce the size of the fiscal deficit.
“Since the average Naira exchange rate is currently above N800, and that only an improvement in dollar liquidity can get it to trade below N800/$, it follows therefore, that the adjustment by National Assembly will only increase Naira component of the federation account, and by extension, the projected revenue of federal government, thereby reducing the ultimate size of fiscal deficit.
“Furthermore, a major improvement in dollar liquidity through the market, and stability in the external sector, will together, bring down the exchange rate and cause inflation to moderate. “What the National Assembly is signaling to the president is; do whatever you can do to bring down the exchange rate to N750/$ through the market, but until then, let us use a more realistic forecast to deal with the ultimate size of fiscal deficit. So, the adjustment by the National Assembly has not done any damage to the budget parameters,” he said.
N800/$1 exchange rate looks too optimistic —Former CIS President
Commenting as well, Immediate past President, Chartered Institute of Stockbrokers, CIS,Olatunde Amolegbe, said : “I have said the budget is a little conservative given where we are coming from and the stated ambition of this government.I do not have any issue with the increase in budget size by the National Assembly as long as the increase is targeted towards Capital Expenditure and not to balloon the already bloated recurrent expenditure in the budget
“Increasing the exchange rate assumption by the NA is an indication that the Budget Office was too optimistic in its estimates in the first place.Even the N800/$1 looks too optimistic where we stand at the moment.
“For me, budget performance is more important than just rhetorics. The government needs to expedite those portions of the budget that will have an immediate impact on poverty reduction and generate employment for the people.”
