The Speaker of the House of Representatives, Femi Gbajabiamila, has said members of the parliament are concerned about the long-term impact of the burden that the endless borrowings by the Federal Government and growing debt profile will place on Nigeria.
Gbajabiamila, who said the President, Major General Muhammadu Buhari (retd.), was expected to lay the 2023 Appropriation Bill before the National Assembly early October, decried the huge deficit in the proposed budget of the Federal Government.
The Federal Government is proposing a budget with estimates totalling N19.76tn, while the deficit will hover between N11.30tn and N12.41tn, depending on the duration that the Premium Motor Spirit (petrol) subsidy regime will be extended, in the 2023 fiscal year.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had, on August 29, 2022, in her presentation to the House Committee on Finance, at the hearing on the proposed 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, decried that the government might be unable to provide for treasury-funded capital projects next year, especially due to dwindling revenue and petrol subsidy.
Ahmed had pointed out that crude oil production challenges and the PMS subsidy deductions by the Nigerian National Petroleum Company Limited (formerly Nigerian National Petroleum Corporation) constitute a major threat to the country’s revenue growth targets.
Gbajabiamila, in his remarks at the opening of plenary on Tuesday after the National Assembly returned from its two-month annual break, expressed concerns over the revelations from the proposal.
He said, “We hope to receive the 2023 Appropriations Bill from the President of the Federal Republic of Nigeria, His Excellency Muhammadu Buhari, GCFR, in the first week of October. In advance of this, the Senate and House Committees on Finance have begun interactive sessions with the Ministries, Departments and Agencies of the government on the Medium Term Expenditure Framework and Fiscal Strategy Paper.
“Some concerns have emerged from these interactions, most prominently of which are the issues of the scope of deficit financing to be proposed in the new budget and the decline in crude oil production due to theft and sabotage.
“While the House appreciates that our current fiscal conditions necessitate borrowing to finance budgetary expenditures, we are, nonetheless, concerned about the long-term impact of this burden on the country and our ability to pay what we owe in a responsible and sustainable way. These questions will be central to our consideration of the 2023 Appropriations Bill when presented.
“We will also be mindful of the provisions of our laws, especially the Fiscal Responsibility Act, as it relates to the scope of deficit financing of the budget. Ministries, departments and agencies of the government should take note that appropriations for new projects will be influenced by the extent to which existing projects have been funded and their performance in executing these projects as intended.”
The Speaker also noted that due to theft and various acts of economic sabotage, the country is experiencing a massive decline in the volume of crude oil exports.
“Our crude oil export of 972,394 barrels per day for August is the lowest we have recorded in the last two decades,” he said.
Gbajabiamila added, “At a time when we are already experiencing severe financial constraints, the perpetrators of this brazen heist threaten our ability to serve the Nigerian people and meet the demands of governance and nation-building. Their actions constitute treason against our country, for which they must be held accountable.
“There are mechanisms in place to prevent these sorts of bad actors, and the government spends significant amounts of money each year to protect oil and gas resources in the country. Evidently, these existing arrangements do not suffice.
“As such, there is an urgent need to review them and make the necessary improvements. It is also of particular importance that the perpetrators of these crimes against the state are identified, prosecuted and subjected to the stiffest penalties the law allows. Those who seek to impoverish our country in this manner have declared war against the Nigerian people. They are no different from the insurgents and terrorists against whom we are battling in various theatres.
“The government’s response must be sufficient to convince them of the error of their ways and deter others who might be tempted to join in their treason.
“I met with the Finance Minister and the DG Budget (Office, Ben Akabueze) and made it clear to them that ‘enough of crude oil theft.’ Nigerians don’t want to hear that again. What do you intend to do about it? That’s the important question.”