Former Vice President, Atiku Abubakar has faulted President Muhammadu Buhari’s proposed N13.08 trillion 2021 budget, saying it contravenes the provisions of the Fiscal Responsibility Act, FRA.
Reacting in a statement made available to the newsmen Friday evening, Atiku identified loopholes, which in his estimation, are capable of stiffening growth and expansion of the nation’s economy next year.
The statement read: “The budget deficit in the proposal is ₦5.21 trillion. This amount is just over 3.5 per cent of Nigeria’s 2019 Gross Domestic Product, GDP.
“This is contrary to the Fiscal Responsibility Act of 2007, which provides in Part II, Section 12, subsection 1 that, “aggregate expenditure and the aggregate amount appropriated by the National Assembly for each financial year shall not be more than the estimated aggregate revenue plus a deficit, not exceeding three per cent of the estimated Gross Domestic Product or any sustainable percentage as may be determined by the national Assembly for each financial year.”
According to the Peoples Democratic Party, PDP, Presidential candidate in the 2019 election, “Nigeria had a GDP of approximately $447 billion in 2019. Three per cent of this amount is $13. 3 billion, which at the current official exchange rate of ₦379 to $1, gives you a figure of ₦5.07 trillion. So clearly, the budget deficit of ₦5.21 trillion, as announced by President Muhammadu, is above 3 per cent of our GDP and is therefore in contravention of the Fiscal Responsibility Act of 2007.”
The statement continued: “Even more disturbing is the fact that our GDP has fallen sharply from its 2019 figures, and has been projected by the World Bank and other multilateral institutions at somewhere between $400 billion and $350 billion. Meaning that in actual sense, the ₦5.21 trillion budget deficits is actually far above the 3% threshold stipulated by the FRA.
“That this escaped the notice of the Buhari administration shows a glaring lack of rigour in the formulation of the Budget; a very disturbing development.
“Furthermore, this deficit shows the precarious state of our national finances, which have since been overburdened by excessive borrowing on the part of the Buhari administration.
“It has not escaped my attention that the Fiscal Responsibility Act of 2007 makes provision for the National Assembly to raise the threshold of the budget deficit from 3 per cent to a higher figure. However, if this is done, they will be serving this administration’s interests, not Nigeria’s, because the Act says that such a threshold must be sustainable. Is it sustainable when our budget makes almost as much provision for debt servicing, as it does for capital expenditure?
“As such, I call on the President, to recall this budget, and recalibrate it to reflect the provisions of the Fiscal Responsibility Act of 2007, and the current economic realities of the nation. To do otherwise will not only be unpatriotic, it will also be catastrophic for our nation’s economy.”
Minister Affirms Nigeria Air Will Take Off April 2022
Nigeria’s national carrier, Nigeria Air, will take off by April 2022, Hadi Sirika, minister of aviation, said on Wednesday.
The minister announced the take-off date while briefing state house correspondents after the federal executive council (FEC) meeting at the presidential villa, Abuja.
He said the national carrier will be run by a company in which the Nigerian government will hold a five percent stake while Nigerian entrepreneurs will hold 46 percent.
He said the remaining 49 percent will be reserved for yet to be assigned strategic equity partners, including foreign investors.
Sirika said the national carrier, when operational, will create about 70,000 jobs for Nigerians.
Nigeria Needs $1.5trn To Bridge Infrastructure Gap, Says Buhari
President Muhammadu Buhari says Nigeria needs $1.5 trillion within a 10-year period to achieve an appreciable level of infrastructural development.
According to a statement by Garba Shehu, presidential spokesperson, Buhari said this on Tuesday at the COP26 side event on improving global infrastructure.
COP26 is currently holding in Glasgow, Scotland.
The president said his administration has taken infrastructure expansion in Nigeria seriously, while being conscious of the fact that new investments in critical sectors of the economy would aid lifting 100 million Nigerians out of poverty by 2030.
“There is a nexus between infrastructural development and the overall economic development of a nation,” Buhari said.
“My administration identified this early enough as a major enabler of sustainable economic development and the realisation of other continental and global development aspirations, particularly the 2030 Agenda for Sustainable Development Goals.
“On my assumption of office in 2015, Nigeria faced a huge infrastructure deficit and the total National Infrastructure Stock was estimated at 35% of our Gross Domestic Product.
“In solving these problems, we embarked on a massive infrastructure expansion programme in the areas of Health care, Education, Transportation, Manufacturing, Energy, Housing, Agriculture, and Water Resources.
“We provided more financial resources for these policies, charted new international partnerships and pursued liberalisation policies to allow private sector participation.
“We introduced the revised National Integrated Infrastructure Master Plan – a policy document that ensures our infrastructure expansion projects is cross-sectorally integrated and environmentally friendly.”
The president welcomed the plan of the G7 countries to mobilise hundreds of billions of dollars of infrastructure investment for low- and middle-income countries.
He noted that the ‘Build Back Better World’ plan, an initiative of the G7 countries, is expected to be a value-driven, high-standard, and transparent infrastructure partnership.
Buhari also told the world leaders that Nigeria is open to investment in infrastructural development.
‘‘Nigeria is ready for your investments in infrastructural development in the country,” he said.
‘‘My administration has established a clear legal and regulatory framework for private financing of infrastructure to establish a standard process, especially on the monitoring and evaluation process.
‘‘We look forward to working with you in this regard.”
PenCom Moves To Diversify Pension Funds Portfolios, Reduce FG’s Pension Liabilities
By Sola Alabadan
The National Pension Commission (PenCom) has promised to focus efforts on facilitating increased diversification of Pension Fund portfolios, as well as aggressively pursue efforts aimed at reducing pension liabilities of the Federal Government.
PenCom’s Director General, Mrs. Aisha Dahir Umar, stated this in her report contained in the 2020 annual report of the commission made available today.
She also assured that the commission would seek to expand coverage of the Contributory Pension Scheme in States, Local Governments and the informal sector; while also enhancing public awareness campaign efforts, and striving to improve service delivery in the industry.
Going forward, the PenCom boss pointed out that the commission would re-evaluate the milestones of the past years and consolidate its efforts to build a future-ready and resilient work environment underpinned by various initiatives.
She emphasised that PenCom’s focus shall be on a five-prong strategic approach that steadily pursues and addresses identified gaps while creating a more agile organisation with a culture that supports innovation and continuous improvement.
Meanwhile, the annual report indicated that the Pension Fund Administrators (PFAs) generated total earnings of N109.68billion in 2020, representing an increase of 3% when compared with the N106.70billion recorded in 2019.
The combined operating expenses incurred by the PFAs amounted to N55.20billion, while profits before taxes amounted to N54.48billion.
The major source of income for the PFAs was fund management fees, which accounted for over 80% of total Income.
The PFAs recorded a combined Return on Assets of 30.07% and a combined Return on Equity of 35.19%. This indicated that the PFAs sustained their profitability in the year under review.
The six CPFAs generated a total revenue (income and transfers from Sponsors) of N2.68billion, which was a 7.58% decrease compared to the N2.90bllion generated in 2019.
The major source of revenue for the CPFAs were inflows from their sponsor companies, which constituted 55% of their total revenue, while management fees and investment income accounted for 41% and 4%, respectively.
The CPFAs incurred a total expenditure of N2.74billion and a combined profit of N52.38million in 2020. Operating expenses comprised mainly of staff costs, which accounted for over 69% of operating expenses.
The PFCs generated a combined income of N24.09billion, representing a 2.75% decrease when compared with the N24.77billion generated in 2019.
The major source of income for the PFCs was custodial fees, which constituted 80% of their total income, while investment income and other income accounted for about 20% of PFCs total income.
The PFCs incurred total operating expenses of N7.73billion and a combined profit of N16.36billion in 2020. This indicated a 12.61% decline in the PFCs’ profitability when compared to the N18.72 billion recorded in 2019.