Businessman Ramaphosa leads South Africa into recession
Cyril Ramaphosa, a big-time businessman took over from Jacob Zuma as the President of South Africa last February. He took over a relatively bourgeoning economy. Six months down the line, South Africa, the second largest economy in Africa is in recession.
South Africa is going into recession for the first time since 2009 following two consecutive quarters of negative GDP growth.
The news has come as a surprise to many analysts as they expected the economy to narrowly avoid a second quarter of decline.
The second largest economy in Africa is reeling: rising fuel prices, increased cost of living and an unemployment rate close to 30% is a stark indicator of how much work President Ramaphosa will have to do to rescue the country from a cliff edge.
Statistics South Africa said the economy contracted at an annualised rate of 0.7% in the second quarter, and this follows a 2.6% negative growth in the previous three months.
The biggest contributor to South Africa’s recession has been a massive 29% decline in agricultural output.
The president told parliament last month that his cabinet was working on a stimulus package for the economy; and South Africa is seeking $100bn (£78bn) investments from international investors.
Statistics South Africa had said in 2017 that the economy was in recession, but its figures have since been revised.
Ramaphosa was the only candidate nominated in parliament after fierce criticism of Zuma on corruption. MPs from the ruling African National Congress broke into song at the announcement.
In a speech to parliament Mr Ramaphosa, 65, said that corruption was on his radar.
The ANC had told Mr Zuma to step down or face a vote of no-confidence.
In a televised statement he said he was quitting with immediate effect but said he disagreed with his party’s decision.
Mr Zuma faces numerous corruption allegations but denies any wrongdoing.
One opposition party, the Economic Freedom Fighters, walked out of the parliamentary debate. It wants new elections, rather than the ANC deciding on the identity of the new president.
The BBC said it is often said that Mr Ramaphosa has had his eye on the position of president since the ANC came to power in 1994.
“The story goes that he was so upset at not having been chosen by Nelson Mandela as his successor that he left politics and went into business.
But Mr Ramaphosa has now finally realised that dream”, said the platform.
He has said his priority is reviving South Africa’s battered economy. But it won’t be easy: Unemployment is currently at almost 30%, a rate which rises to nearly 40% for young people.
Low growth rates and dwindling investor confidence were compounded by two credit agencies downgrading the economy to junk status.
One of the first steps in improving that investor confidence is addressing the persistent claims of corruption at the heart of government
There is a renewed sense of hope as Mr Ramaphosa is taking over the reins of Africa’s most industrialised economy.
The markets appeared to welcome Mr Zuma’s resignation. The South African currency, the rand, reaching its strongest levels in three years – at 11.6570 rand for $1 in early trading.
Some will miss him though, pointing to achievements like announcing the abolition of fees for higher education, says the BBC’s Milton Nkosi in Johannesburg.
Mr Zuma, a former member of the ANC’s military wing in the days of apartheid, rose through the ranks of the party to become president. He led the country for more than a third of its time after apartheid.
But he leaves office with several scandals hanging over him, and with South Africa’s economy in dire straits. e
Emmanuel Ibe Kachikwu, Minister of State for Petroleum Resources, Federal Republic of Nigeria is expected to be part of the Oil and Gas event
October Oil and Gas event in Equatorial Guinea to draw oil majors
Since the discovery of significant oil reserves in the 1990s, natural gas exploitation and export have become one of the most important assets and economy drivers in Equatorial Guinea. As often expressed by the Government, the country has a vision to become the region’s Gas Hub, which entails close cooperation with local and international energy companies.
On the wave of recent developments in the Equatoguinean gas market, and with the vast interest from international and local investors, SONAGAS G.E. and the CWC Group will host the Equatorial Guinea Gas Summit and Exhibition under the auspices of the Ministry of Mines & Hydrocarbons and GEPetrol. This important regional meeting will take place at the Sipopo Congress Center, Malabo, on 4 and 5 October 2018 as part of the country’s 50th Independence Anniversary celebrations.
‘I am delighted to be delivering the opening keynote address and sharing the President and Government’s vision and making important announcements that will help boost the oil and gas sector in country’ expressed H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons who will deliver a keynote address following the opening remarks from the country’s President, H.E. Teodoro Obiang Nguema Mbasogo.
The Equatorial Guinea Gas Summit will feature the participation of international delegations from Equatorial Guinea, Nigeria, Burkina Faso, Ghana, Tchad and others. Distinguished speakers include:
·H.E. Teodoro Obiang Nguema Mbasogo, President of the Republic of Equatorial Guinea
·H.E. Gabriel M Obiang Lima, Minister of Mines & Hydrocarbons, Equatorial Guinea
·H.E. Lucas Abaga Nchama, Minister of Finance, Economy and Planning, Equatorial Guinea
·Hon. Dr. Emmanuel Ibe Kachikwu, Minister of State for Petroleum Resources, Federal Republic of Nigeria
·Juan Antonio Ndong Ondo, Director General, SONAGAS, G.E.
·Antonio Oburu Ondo, Director General, GEPetrol
·Hilaire Kabore, Director General, Sonabhy Burkina Faso
·Tahir Hamid Nguilin, Societé des Hydrocarbures du Tchad, Republic of Tchad
The event is organised with support from industry stakeholders: Noble Energy, Marathon Oil, EG LNG, Atlantic Methanol Production Company, Kosmos Energy, Trident Energy, Ophir, Shell, Mitsui and Marubeni.The two-day programme will include ample networking opportunities with government and stakeholders alongside the Summit sessions which will address the opportunities and challenges in the upstream, midstream and downstream as well as the following themes and projects:
·Updates and opportunities in:
o Farm-in in exploration projects
o Fortuna Project
o Bioko Oil Terminal
o Refinery: Modular and Fixed
o Petrochemical Plant
·Strategies to attract investment into equatorial guinea
·Economic diversification: New partnerships and initiatives between international and national investors
·Gas hub opportunity
·Trading and global LNG markets for Equatorial Guinea’s gas and LNG
·Developing National Content and a network of national companies along the oil & gas value chain
Tunde Fowler, Executive Chairman of FIRS hinted the review of Nigeria’s Transfer Pricing regulation
Nigeria releases revised Transfer Pricing regulation
The Federal Inland Revenue Service (FIRS), in exercise of powers conferred on it by Section 61 of the Federal Inland Revenue Service (Establishment) Act No.13 of 2007, has updated the Income Tax (Transfer Pricing) Regulations, 2012 (Old Regulations). The revised Transfer Pricing (TP) Regulations (the Revised Regulations) came into effect from March 2018 and the updates are first to be made to the TP Regulations in Nigeria since its introduction in 2012.
Transfer pricing is a set of substantive and administrative regulatory requirements which tax jurisdictions or governments impose on certain taxpayers. These set of rules foresee distortions of taxable income in across-the-border transactions within and between enterprises under common ownership or control.
Setting effective Transfer Pricing regulations will empower the tax authority legally to forestall and solve distortion of taxable income. This is primarily why tax authorities (for instance Nigeria) in many countries can adjust intragroup transfer prices that differ from what would have been charged by unrelated enterprises dealing at arm’s length.
The Regulations aim at increased compliance with the TP requirements and are in line with the TP Guidelines for Multinational Enterprises and Tax Administrations published by the Organisation for Economic Corporation and Development (OECD) in July 2017. The main highlights of the changes in the revised TP Regulations are as follows:
Old Regulations
Revised Regulations
Scope of application
The Regulations gave effect to the provisions of the following legislation as they relate to connected transactions:
· Personal Income Tax Act
· Companies Income Tax Act
· Petroleum Profits Tax Act
The scope of the Regulations have been expanded to give effect to the provisions of the following legislation:
· Personal Income Tax Act
· Companies Income Tax Act
· Petroleum Profits Tax Act
· Capital Gains Tax Act
· Value Added Tax Act
Materiality threshold for applying for Advance Pricing Agreement (APA”)
The materiality threshold for APA was set at ₦250m
There is no materiality threshold
Materiality threshold for maintaining contemporaneous documentation
There was no materiality threshold
The threshold for maintaining contemporaneous documentation is set at ₦300m
Documents required to be filed with FIRS
The following documents were required to be filed on annual basis:
· TP Disclosure form,
· TP Declaration form and
· Local TP Documentation
A Group Masterfile is required to be filed with FIRS in addition to the documents under the Old Regulations
Penalty for failure to file TP Declaration form within the stipulated time
· ₦25,000 for the first month of default, and
· ₦5,000 for every month the failure continues
Penalty has been increased as follows:
· ₦10m for the first month of default, and
· ₦10,000 for every day the failure continues
Penalties for failure to file
(1) TP Disclosure Form, or
(2) TP Documentation within the stipulated time
₦25,000 for the first month of default and ₦5,000 for every month the failure continues
Penalty has been amended as shown below:
· ₦10m or 1% of the value of controlled transaction(s) not disclosed; whichever is higher, for the first month of default, and
· ₦10,000 for every day the failure continues
Penalties for making an incorrect disclosure in the TP Disclosure form submitted to FIRS
None
₦10m or 1% of the value of controlled transactions incorrectly disclosed, whichever is higher, shall apply.
Failure to provide FIRS with any information or document required within the time specified in a notice issued to the taxpayer by FIRS
None
· 1% of the value of each controlled transaction for which the information or document was required, in addition to;
The Peoples Democratic Party (PDP) has said President Muhammadu Buhari’s poor understanding of current global economic dynamics and his cover of humongous corruption in his Presidency have completely wrecked our nation and directly responsible for the accumulated N22 trillion national debt burden.
In a statement on Wednesday, the party said had President Buhari heed wise counsel from the PDP to allow competent hands to manage the nation’s economy and had he not continued to provide official cover for corruption in his Presidency, the nation would not have been in this current embarrassing economic situation.
“Since President Buhari assumed office and took control of our once robust economy, his administration has not been able to articulate any germane policy to sustain, let alone, grow the economy, but had instead, resorted to borrowing, while allowing his cronies and APC leaders to fritter away trillions of naira earned by the nation in the last three years.
Why would the Buhari administration not accumulate debts when it has continued to cover up corrupt practices under its watch, including the alleged stealing of N9 trillion, through underhand oil contracts in the NNPC and Ministry of Petroleum Resources as well as the alleged illegal lifting of crude oil worth N1.1 trillion by 18 unregistered companies to service APC interests, among others.
Moreover, the Buhari Presidency has refused to explain the whereabouts of trillions of naira unremitted oil revenue, resulting in the deadlock at the Federal Accounts Allocation Committee (FAAC)”, a statement by its National Publicity Secretary, Kola Ologbondiyan said.
“If these monies were properly accounted for and utilized, Nigeria will not be in this dire economic situation which has brought hunger and starvation on Nigerians and rendered millions of compatriots jobless, while President Buhari and his officials live in affluence.
The PDP recalls various red flags by international agencies, including Transparency International and the World Bank on the poor management of our economy. Besides, the Presidency has been concealing the fact that Petroleum sector under President Buhari has been inducted into the FOI Hall of Shame by Media Rights Agenda (MRA) following government’s relentless secrecy and violation of rules in the sector.
We invite Nigerians to note that since President Buhari intensified his re-election bid, there have been huge dearth in investment inflow, further depreciation of the naira and a dangerous slide in the capital market, all signposting that our nation will continue to face perilous time as long as President Buhari is on the saddle with his array of persons with doubtful credentials as ministers and special advisers.
The PDP therefore urges President Buhari to take responsibility for the escalated debt, stop offering excuses and get ready to accept defeat and quit the stage in 2019, so that more competent Nigerians can revamp our economy on the platform of the repositioned PDP”, said PDP.
President of the African Development Bank Group (www.afdb.org), Akinwumi Adesina,
Technologies up farmers’ output, says Adesina, AfDB President
The President of the African Development Bank Group (www.afdb.org), Akinwumi Adesina, has made an urgent call to give farmers across the continent new technologies with the potential to transform agricultural production. Adesina said the technology transfer was needed immediately and that evidence from countries like Nigeria demonstrated that technology plus strong government backing was already yielding positive results.
”Technologies to achieve Africa’s green revolution exist, but are mostly just sitting on the shelves. The challenge is a lack of supportive policies to ensure that they are scaled up to reach millions of farmers,” Adesina said during a keynote speech delivered at the 2018 Agricultural and Applied Economics Association (AAEA) Annual Meeting held in Washington, D.C August 5, 2018.
Adesina cited the case of Nigeria, where policy during his tenure as the country’s Minister of Agriculture, resulted in a rice production revolution in three years.
“All it took was sheer political will, supported by science, technology and pragmatic policies…Just like in the case of rice, the same can be said of a myriad of technologies, including high-yielding water efficient maize, high-yielding cassava varieties, animal and fisheries technologies,” Adesina said.
The African Development Bank is pointing the way to how this can be done, and is currently working with the World Bank, the Alliance for a Green Revolution in Africa (AGRA), and the Bill and Melinda Gates Foundation to mobilize US$ 1 billion to scale up agricultural technologies across Africa under a new initiative called Technologies for African Agricultural Transformation (TAAT).
TAAT is taking bold steps to bring down some of the barriers preventing farmers from accessing latest seed varieties and technologies to improve their productivity.
“With the rapid pace of growth of the use of drones, automated tractors, artificial intelligence, robotics and block chains, agriculture as we know it today will change,” the President said. “It is more likely that the future farmers will be sitting in their homes with computer applications using drone to determine the size of their farms, monitor and guide the applications of farm inputs, and with driverless combine harvesters bringing in the harvest.”
Adesina used the opportunity to advocate for African universities to adapt their curriculum to enable technology-driven farmers and to focus on agribusiness entrepreneurship for young people, emphasizing the need to rise beyond theories to application.
Through its innovative Enable Youth initiative, the African Development Bank has in the past two years committed close to US$ 300 million to develop the next generation of agribusiness and commercial farmers for Africa.
Adesina stressed the Bank’s resolve to change the face of agriculture in Africa to unleash new sources of wealth.
AAEA President Scott Swinton said Adesina and the African Development Bank exemplify the use of economics that makes a difference in people’s lives.
“If applied economics is economics that make a difference, I think that there is no better example of someone who has used that than Akinwumi Adesina,” Swindon said.
Adesina told delegates at the 2018 conference attended by over 1,600 agricultural and applied economists from around the world: “There is no reason why Africa should be spending US$ 35 billion a year importing food. All it needs to do is to harness the available technologies with the right policies and rapidly raise agricultural productivity and incomes for farmers, and assure lower food prices for consumers.”
Adesina, who was the 2017 World Food Prize winner, is advocating for the creation of staple crops processing zones across Africa (SCPZs): vast areas within rural areas set aside and managed for agribusiness and food manufacturing industries and other agro-allied industries, enabled with right policies and infrastructure.
“I am convinced that just like industrial parks helped China, so will the SCPZs help to create new economic zones in rural areas that will help lift hundreds of millions out of poverty through the transformation of agriculture- the main source of their livelihoods- from a way of life into a viable profitable business that will unleash new sources of wealth,” he said.
The African Development Bank has already begun investing in the development of processing zones in a number of African countries, including Ethiopia, Togo, Democratic Republic of Congo, and Mozambique, with a plan to reach 15 countries in a few years.
To help Africa transform its agriculture, the Bank is investing US$ 24 billion over the next ten years to implement its Feed Africa Strategy.
Ms. Bajabulile “Swazi” Tshabalala as Vice President for Finance and Chief Finance Officer for the African Development Bank Group
Ms ‘Swazi’ Tshabalala is new AfDB Vice President for Finance and Chief Finance Officer
The African Development Bank Group (https://www.AfDB.org/en/) is pleased to announce the appointment of Ms. Bajabulile “Swazi” Tshabalala as Vice President for Finance and Chief Finance Officer for the African Development Bank Group, effective from August 1, 2018.
Ms. Tshabalala, a citizen of South Africa, is currently the Executive Director of Barbican Advisory Group, South Africa, where she is responsible for Financial and Engineering Consulting, Transaction and Financial Advisory.
Ms. Tshabalala brings 26 years of experience in finance, treasury management and capital market operations. She graduated with a BA in Economics from Lawrence University in the USA in 1989. She obtained a Master’s Degree in Business Administration from Wake Forest University, USA in 1992.
Her early career included working as Trainee Client Manager for the Old Mutual Employee Benefits (1992-1993). Later, she worked as a Corporate Dealer for the Standard Bank Group for two years. She subsequently moved to the giant conglomerate, Transnet Limited, South Africa. Having worked initially in Treasury Operations, as Deputy Treasury Manager (1996-1998), Treasury Manager (1998-2001), she was promoted to General Manager, Corporate Services (2001-2004) at Transnet. In this position she oversaw the transformation of the old Portnet into the new Transnet National Ports Authority and Transnet Limited mandated to control and manage all eight commercial ports in South Africa.
Ms. Tshabalala was promoted to the Group Treasurer of Transnet (2004-2006), where she oversaw all treasury operations for all the divisions of the company, except South African Airways. She moved from Transnet in 2006 to become the Chief Executive Officer of the Industrial Development Group (IDG), where she worked until 2014. The operations of the IDG Group covered petroleum, mineral resources, energy and property.
Since 2015, Ms. Tshabalala has been the Executive Director of the Barbican Advisory Group, where she is responsible for financial and engineering consulting, transaction and financial advisory services. She owns her own consulting and advisory company, Kupanua Investments.
Ms. Tshabalala has built extensive experience as Non-Executive Director on the Board of Directors of several leading corporations, including MTN, Tiger Brands (SA) and South African Airways. She has previously served on the Boards of various Johannesburg Stock Exchange-listed companies, including Liberty Group South Africa, Standard Bank Group, STANLIB Asset Management Limited, Transnet Pension Fund and V & A Waterfront Holdings. She is also the founder and past Deputy President of the Association of Black Securities and Investment Professionals of South Africa.
Ms. Tshabalala brings solid senior management and leadership experience. With a background in banking, she has extensive experience in Finance and Treasury operations and strong knowledge in local and international capital markets.
Commenting on her appointment, Ms. Tshabalala noted: “I am excited to join the African Development Bank Group and be part of the talented senior management team that President Adesina has been attracting to the Bank. I am passionate about the Bank’s development agenda that has attracted global attention as bold and innovative for accelerating Africa’s development”.
“The African Development Bank Group already has world-class and high-performing finance and treasury teams. I am honored to join to lead these outstanding teams to further build the Bank’s financial strength and capability to help Africa achieve accelerated development”, said Ms. Tshabalala.
The President of the African Development Bank Group, Dr. Akinwumi Adesina said “I am delighted Ms. Tshabalala will be joining as our new Vice President for Finance and Chief Finance Officer. She brings extensive experience managing finance and treasury operations of large public and private sector corporations, where she has distinguished herself with a record of performance”.
“Swazi’s vast private sector experience will be highly valuable to the African Development Bank Group as we continue to build on the Bank’s very strong financial performance and drive innovative financial approaches to leverage more resources to deliver faster-paced development for African countries and the private sector”, said Dr. Adesina
Dr Kapil Kapoor is Director General, Southern Africa Regional Development and Business Delivery Office with effect from 1st September 2018
AfDB says Kapoor is DG Southern Africa Regional Development and Business Delivery Office
The African Development Bank Group (https://www.AfDB.org/en/) is pleased to announce the appointment of Dr Kapil Kapoor as Director General, Southern Africa Regional Development and Business Delivery Office with effect from 1st September 2018.
Dr Kapoor, a citizen of India, has been the Director for Strategy and Operational Policies since February 2012, when he joined the African Development Bank. He has an established track record of effectively engaging national governments in high level policy dialogue, catalyzing policy change in a variety of difficult economic and political settings and supporting development initiatives through innovative project finance. He had earlier worked as a manager and development economist with the World Bank, where he managed an annual portfolio of projects in excess of $1 billion.
He has led numerous development initiatives in diverse country settings, ranging from fragile states like Afghanistan and Somalia, to small island economies like Mauritius and Sri Lanka, to large and fast growing economies like Bangladesh and India.
In his capacity as Director of Strategy and Operational Policies, he helped to lead the preparation of several strategies for the Bank Group, including the Bank’s Ten Year Strategy and Private Sector Development Strategy. As Acting Vice President for Sector Operations, he provided leadership for the preparation of the Feed Africa and Jobs for Youth strategies of the Bank. He led the process for amending the Bank’s Credit Policy to enable eligible African Development Fund countries to get access to the African Development Bank resources, a move that has enabled the Bank to significantly scale up its support to Africa’s least developed economies. More recently, he guided the preparation for the Bank’s new Results Based Lending Policy.
As the Bank’s Sherpa for the Heads of Multilateral Development Banks group, he routinely organized high level exchanges with leaders of multilateral finance institutions to shape thinking on issues impacting international financial architecture. As the Bank’s representative to the G20, he played a central role in the development and implementation of the Compact with Africa initiative. As a member of the Senior Management Coordinating Committee and the Bank’s Operations Committee, a key aspect of his role in recent years has been to build strong relationships across the Bank, to help complexes succeed in the work that they are doing and to promote a “one-Bank” culture.
Dr. Kapoor holds a PhD degree in Economics from the George Washington University, USA. Prior to joining the African Development Bank Group in 2012, he held a series of senior positions with the World Bank Group, including the World Bank’s Representative for Uganda and Zambia and the World Bank’s Sector Manager for its poverty reduction, economic management and governance program in Asia.
Commenting on his appointment, Dr.. Kapoor said “I am excited and truly honoured to be appointed as the Director General for Southern Africa. I look forward to leveraging my diverse experience from within and outside the African Development Bank to build a healthy, high impact sustainable business in the Southern Africa region through an engaged skilled workforce across the region.”
The President of the African Development Bank Group, Dr. Akinwumi Adesina said of the appointment “Dr. Kapoor brings wide experience and a deep knowledge of the operations of the Bank. He has provided rich strategic thought leadership for the Bank’s Strategy formulation and understands well the New Business Delivery Model of the Bank. Kapil’s depth of experience in high level policy dialogue, stakeholder engagement and his deep knowledge and experience in the Southern Africa region will further help in our drive for accelerated delivery and greater impacts for the Bank’s investments in the Southern Africa Region”.
President Adesina added: “I wish to thank Dr Josephine Ngure, who has been acting as the Director General for the past one year, for having stepped up and delivered outstanding work, providing leadership, direction and support for the Bank’s staff and operations in the region. I wish her continued success in her substantive role as Deputy Director General. I am confident that Kapil and Josephine will together help to drive the business of the Bank effectively”.
From L: Representative of the Chief Executive Officer of SMEDAN and Director, Policy, Advocacy and Coordination, Monday Ewans, Representative of the Executive Chairman of FIRS and Secretary of JTB, Oseni Elamah, FIRS State Coordinator, Kano, Jigawa and Katsina, Pam Davou at the MSMEs sensitisation in Kano on Wednesday, July 25, 2018
SPONSORED PHOTOS: FIRS, JTB and SMEDAN MSMEs SENSITISATION IN KANO
The Federal Inland Revenue Service (FIRS), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the Joint Tax Board (JTB) jointly organised a one-day workshop for awareness creation and sensitization for small and medium enterprises on the importance and procedure for payment of taxes.
The sensitisation is a part of programmes rolled out by FIRS, JTB and SMEDAN to harness the Micro, Small and Medium Scale Enterprises (SMEs) in Nigeria and make them viable. See photos from the event which was held at the Royal Tropicana Hotel, Kano, Kano State on Wednesday, July 25th, 2018.
Special Adviser to the Executive Chairman of FIRS on Investigations, Mrs. Clara Nnachi at eventCross-section of participants at the one-day event
More participants at the event
Why FIRS, JTB, SMEDAN focus on sensitizing over 37million MSMEs in Nigeria—by JTB, Secretary
When properly harnessed, the Micro, Small and Medium Enterprises (MSMEs) sub-sector of Nigeria, which is currently over 37 million in number, will be the springboard for Nigeria’s economic growth, the Executive Secretary of Joint Tax Board (JTB), Oseni Elamah, has said.
Elamah made this remark in Kano on Wednesday at a workshop jointly organised by the Federal Inland Revenue Service (FIRS), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and JTB for awareness creation and sensitization on small and medium enterprises on the importance and procedure for payment of taxes.
The sensitisation is a part of programmes rolled out by FIRS, JTB and SMEDAN to harness the Micro, Small and Medium Scale Enterprises and make them viable.
Elamah, who also represented the Executive Chairman of FIRS, Tunde Fowler, at the event said that all over the world, MSMEs are seen as the medium for accelerating the attainment of broad socio-economic objectives, especially for emerging economies. These, he said include poverty reduction, employment generation, wealth creation, income redistribution, trade equilibrium, entrepreneurial diversity, and revenue generation, among others.
“They (MSMEs)are largely unincorporated entities operating as enterprises with registered business names existing within the ambit of the informal sector. They play critical and significant roles via several economic pathways that go well beyond job creation and support growth that contribute significantly to improved living standards and act as a catalyst in promoting local capital formation”, he said.
The Director General and Chief Executive Officer of SMEDAN, Umaru Radda, who was represented by Director Policy, Advocacy and Coordination, Monday Ewans, said the workshop was also meant to help the MSMEs access their rights from the government.
“Though they are numerous incentives and support facilities available to MSMEs in Nigeria, (eg: Federal Government Special Intervention Fund for the MSMEs, Bank of Industry and Central Bank of Nigeria Intervention Fund, etc) access by MSMEs to such incentives and facilities have been hampered by some bottlenecks. Also, lack of understanding of some of his government funds, absence of supportive environment and poor access to finance have reduced the competitiveness of MSMEs in Nigeria.
Ewans added: “This sensitization programme is therefore aimed at sensitizing the MSMEs on the officially approved taxes and procedures for paying them. Fortunately, the FIRS and the JTB have stream-lined the procedures and enhanced the ease of payment of these taxes”.
The SMEDAN CEO also said that the MSMEs when harnessed will play a role in job creation and serve as a tool for economic development. He said SMEDAN works with them to help to reduce unemployment.
The JTB Secretary said the impact that MSMEs have on the economy of Nigeria is better appreciated when we look at some of the contributions they make to the national economy.
“Available statistics from a 2016 survey by the National Bureau of Statistics (NBS) in partnership with the Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN) indicate that there are over 37 million MSMEs operating in the country. This figure is bound to have experienced some increase since the survey was carried out some two years ago. Micro (36,994,578) Small (68,168) Medium (4,670) Total 37,067,419.
“Furthermore, with over 59million Nigerians employed by MSMEs, it accounts for over 84% of the total national labour force. Contribution to National GDP as at 2016 stood at 48.5% with a 7.3% contribution to total national export”, he said.
Elemar in his presentation said Small and Medium Enterprises require education and enlightenment on extant tax laws especially those directly related to their operations, such as Personal Income Tax, Value Added Tax and Withholding Tax. Operators, he added, also require accurate information in relation to changes and emerging trends in the application and administration of various tax laws.
“This is especially more so given the fact that the country’s tax administration system is currently on the threshold of a paradigm change in synergy with global best practice and emerging trends in information communications technology.
“With the consolidation of the nation’s taxpayer database and expected commencement of the Automatic Exchange of Information with other countries of the world, it is essential that operators in this sector adapt to these trends if they are to become serious players in the global market place and to avoid being caught in a paradigm paralysis”, he said.
Senate President BUKOLA Saraki and Speaker of the House, Yakubu DOGARA defend changes in 2018 budget
Buhari’s original budget bill was inequitable, unrealistic, says National Assembly
Nigeria’s National Assembly on Friday defended their adjustment to the original 2018 budget proposal send to them by the Executive, saying the bill had to reflect the federal character principles.
The lawmakers said Buhari’s bill lacked equity based on Federal Character principle and did not reflect the current and urgent national reality.
In a press briefing jointly signed by Senator Aliyu Sabi Abdullahi, Chairman, Senate Committee on Media & Public Affairs and Hon. Abdulrazak Namdas, Chairman, House of Representatives Committee on Media & Public Affairs, the legislators said they have a constitutional responsibility to adjust the document if it is not satisfactory.
“Adjustments and reductions in the locations, costs and number of projects approved were made in order to address geo-political imbalances that came with the Executive proposal. The introduction of new projects was done to ensure the promotion of the principles of Federal Character as contained in Section 14, subsection (3) of the 1999 Constitution of the Federal Republic of Nigeria as amended which states that “the composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such manner as to reflect the federal character of Nigeria…” The number of projects had to be increased in order to give a sense of belonging to every geo-political zone of the country to ensure socio-economic justice, equity, fairness, and to command National loyalty”, the statement said.
The lawmakers said it is within their mandate to make adjustments to the Executive bill.
“You may recall that when the National Assembly passed the 2018 budget, it gave reasons why the budget was increased and why certain projects and programmes had to be provisioned for. However, due to recent developments, it is once again necessary to let Nigerians know the justification for our actions on the 2018 budget, which were based on our Constitutional responsibilities.
“Within the context of the provisions of Sections 4, 80 and 81 of the Constitution, everything that the National Assembly has done is within its powers.
“Furthermore, Chapter 2 of the Constitution emphasizes the need for balance, inclusivity, and equity in the distribution of national resources. The annual budget, which symbolizes the distribution of these resources must reflect the aforementioned values, which we swore to uphold.
“These Constitutional provisions, in addition to a recent Court judgment have affirmed the fact that the budget process is a ‘joint effort’ that must reflect the input of both the executive and the legislature — the latter being the closest representatives of the people. However, we are fully aware that the Executive has the exclusive responsibility to execute all parts of the Appropriation Act once it is signed into law”.
READ THE FULL STATEMENT
THE PRESIDENT’S BUDGET SPEECH: OUR RESPONSE
Gentlemen of the Press.
1. We appreciate the fact that the 2018 Appropriations Law which was passed by the National Assembly on May 16th, 2018 was signed by President Muhammadu Buhari on Wednesday, June 20th, 2018.
2. In his speech at the signing ceremony, certain observations were raised about the work of the National Assembly and its Constitutional responsibility to modify and amend the budget estimates submitted to it by the Executive.
3. You may recall that when the National Assembly passed the 2018 budget, it gave reasons why the budget was increased and why certain projects and programmes had to be provisioned for. However, due to recent developments, it is once again necessary to let Nigerians know the justification for our actions on the 2018 budget, which were based on our Constitutional responsibilities.
4. Adjustments and reductions in the locations, costs and number of projects approved were made in order to address geo-political imbalances that came with the Executive proposal. The introduction of new projects was done to ensure the promotion of the principles of Federal Character as contained in Section 14, subsection (3) of the 1999 Constitution of the Federal Republic of Nigeria as amended which states that “the composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such manner as to reflect the federal character of Nigeria…” The number of projects had to be increased in order to give a sense of belonging to every geo-political zone of the country to ensure socio-economic justice, equity, fairness, and to command National loyalty.
5. Within the context of the provisions of Sections 4, 80 and 81 of the Constitution, everything that the National Assembly has done is within its powers.
6. Furthermore, Chapter 2 of the Constitution emphasizes the need for balance, inclusivity, and equity in the distribution of national resources. The annual budget, which symbolizes the distribution of these resources must reflect the aforementioned values, which we swore to uphold.
7. These Constitutional provisions, in addition to a recent Court judgment have affirmed the fact that the budget process is a ‘joint effort’ that must reflect the input of both the executive and the legislature — the latter being the closest representatives of the people. However, we are fully aware that the Executive has the exclusive responsibility to execute all parts of the Appropriation Act once it is signed into law.
8. It is our firm belief that if the President had been properly briefed by his appointees, he would not have raised most of the concerns that he did in his remarks at the budget signing. It is therefore inevitable for the legislature to give members of the public an insight into what transpired during the appropriations process and how we arrived at the decisions that are contained in the 2018 budget.
9. With the aforementioned background, let us respond to each of the issues raised.
10. On the issue of the period when the budget proposal was submitted and when it was passed by the National Assembly, it is necessary to remind Nigerians that although the budget was submitted in November, as at March 15th 2018 (5 months and 8 days after the budget submission), Mr. President was still directing the Secretary to the Government of the Federation to compel the Heads of Ministries, Departments and Agencies of the Federal Government to appear before the committees of the National Assembly to defend their respective budget. In addition, up till April (6 months after the budget submission), the Executive was still bringing new additions to the 2018 budget which the National Assembly in good faith and in the spirit of collaboration and harmonious working relationship accepted.
11. More importantly, the 2017 budget, was signed into law on June 5th, 2017 and by the provisions of Section 318 of the Constitution, which defines the Financial Year as “any period of 12 months beginning on the first day of January in any year, or other date as the National Assembly may prescribe” – the 2017 budget lapsed on the 5th of June 2018. This same provision is replicated in the 2017 Appropriation Act.
12. It is important to also note that if not for the fact that the 2017 budget elapsed on the 5th of June 2018, the Federal Government would not have recorded notable capital projects for the just ended financial year. This is because the Federal Government only started releasing funds for capital projects in December 2017 when the funds from the Federal Government’s loans were released and disbursed to contractors.
13. On the issue of an Organic Budget Law to improve the budgetary process, the proposed law is pending in the National Assembly and cannot be considered without the amendment of Section 81 of the 1999 Constitution (as amended) which gives the President the power to propose “estimates” at ANYTIME in the financial year. Nigerians need to know that during the last Constitutional Review exercise, the National Assembly in its wisdom amended this provision and it was approved by over two-thirds of the State Houses of Assembly. The new Constitution Amendment requires the President to submit the budget not later than 90 days to the end of the financial year. As of today, the President has not yet signed this Constitutional Amendment Bill which would have helped us to have a proper budget calendar, which shall eventually lead to the realization of the proposed January to December budget cycle.
14. It was stated that the legislature made cuts amounting to N347 billion which were meant for 4,700 projects. Again, these reductions of N347 billion were made from low priority areas to higher priority areas to support the generation of employment for our youth by MSMEs. We took the decision to reduce the funds in some areas in order to ensure balance and equity in the spread and utilization of our national funds. Additionally, the figures given amounts of the reductions made by the National Assembly were unduly exaggerated as we did not make any substantial reduction on any project to the extent of affecting its implementation.
15. To give the exact detail of the projects where we made deductions, it should be noted that the counterpart funding for the Mambilla Power Plant, Second Niger Bridge/Ancillary roads, the East-West Road, Bonny-Bodo Road, Lagos-Ibadan Express Road and Itakpe-Ajaokuta Rail Project, was reduced by only N3,956,400,290 – which represents only 1.78 % of the total N222,569,335,924 submitted by President Buhari. This left these projects with N218,612,935,634 which cannot negatively affect their implementation. This obviously contradicts the claim that these projects lost “an aggregate of N11.5 billion”.
16. Specifically:
A. The counterpart Funding for 3050mw Mambilla Hydropower Project was reduced from N8.5billion to N8.2billion (a reduction of N300million);
B. The construction of the Second Niger bridge including access roads phases 2a and 2b in Anambra and Delta states and other projects in the South East were reduced from N10billion to N9.1billion (a reduction of N900million);
C. The construction of Bodo-Bonny road with a bridge across the Opobo channel in Rivers State was reduced from N10billion to N8.7billion (a reduction of N1.3billion);
D. The funding for the Lagos-Ibadan Expressway was reduced from N20billion to N18billion (a reduction of N2billion), which would not significantly affect the construction of the road in one appropriations cycle;
E. The Railway Projects (Counterpart Funds): 1. Lagos-Kano (ongoing) 2. Calabar-Lagos (Ongoing) 3. Ajaokuta-Itakpe-Aladja (Warri) (Ongoing) 4. Port Harcourt- Maiduguri (New) 5. Kano-Katsina-Jibiya-Maradi in Niger Republic (New) 6. Abuja-Itakpe and Aladja (Warri)-Warri Port and Refinery including Warri new Harbour (New) 7. Bonny deep Sea Port & Port Harcourt of N162,284,335,924 was retained by the National Assembly as presented by Mr. President; and
F. The National Assembly increased the aggregate funding for the East-West Road from N11,285,000,000 to N12,085,000,000 because we realized the strategic importance of the road to the entire oil producing areas of our country and the fact that the road project has lingered for too long;
17. Addressing the issue of the Second Niger Bridge project, apart from early works, as of today, there is no existing contract for the Second Niger Bridge in spite of frequent requests from the National Assembly. The N900million reduced from the N10billion proposed by the Executive was deployed to fund ancillary roads that connect to the Bridge. It should again be noted that the N12.5billion and the N7.5billion appropriated for the Second Niger Bridge in the 2016 and 2017 budget by the National Assembly were never utilized for the project.
18. We also need to call the attention of the public to the fact that the National Assembly allocated an additional N2billion to the Enugu-Port Harcourt Expressway project. This was more than the Executive proposed.
19. As part of the implementation of the 2017 budget, the contracts for 15 roads were awarded by the Federal Executive Council with no budgetary provisions. Realizing the importance of these projects, the National Assembly decided to spread the N3.9billion saved from the earlier mentioned projects funding to facilitate the take-off of these projects that include: the rehabilitation of Ikorodu-Shagamu road in Lagos State; the rehabilitation of 9th Mile-Orakam to Benue Border; and the general maintenance of Pankshin – Ballang – Nyelleng – Sararele – Gindiri road in Plateau State, etc. These are the projects purported to be “project inclusions without conceptualization.” On these projects, the National Assembly needs to be commended by Mr. President for helping to to support the take-off of these awarded but unfunded projects.
20. Furthermore, it was stated that the budget of the FCT was cut by N 7.5 billion. This is true. The legislators stand by this decision because, through its oversight of the Federal Capital Territory (FCT), the National Assembly discovered that in the 2016 and 2017 budget cycle, there was a severe non-performance of the budgetary allocations to the FCT. During the two years in question, over 50% of the funds that were allocated and released to the FCT were not utilized. These funds were ultimately returned to the treasury. Hence, in order to ensure that scarce resources were allocated in accordance to ‘needs over wants’, funding for the FCT which has historically been under-utilised were allocated to other MDAs that have demonstrated the capacity to implement their allocation for the development of the nation and its people. It was part of the allocation that we spread over the roads for which contracts were awarded with no budgetary allocation.
21. On the provisions for strategic interventions in the health sector which were said to be cut by an aggregate of N7.45billion, it is on record that for the first time since the National Health Act was enacted in 2014, the National Assembly made provision of an additional N55billion for funding primary healthcare through the Basic Primary Healthcare Fund which will be sourced from 1% of the Consolidated Revenue Fund. Thus, contrary to the claim that the health sector suffered any budgetary cuts, we actually provided more funds that will make access to health services possible for over 180 million Nigerians.
22. The presence of this provision for primary healthcare will help us to eliminate the prevalence of maternal, infant and child mortality as well as create a healthier population. With this increased funding, we will be able to ensure that all Nigerian children get the necessary immunization that keeps various diseases away from them and ensure that mothers are well-catered for during childbirth.
23. On the issue of the 104 Unity Schools across the nation and the claim that N3billion was cut from their funding, Nigerians need to know that after careful consultation by the committees of the National Assembly with stakeholders in the sector, the National Assembly actually provided an additional N3.7billion more for meal subsidies in these 104 Unity Schools.
24. Furthermore, it was claimed that the provision for Construction of the Terminal Building at Enugu Airport was cut from 2 billion Naira to 500 million Naira and that this will further delay the completion of this critical project. However, for the avoidance of doubt, it is necessary to again clarify that during the budget defense and oversight processes, the National Assembly discovered that out of the N2billion contract for the Enugu Terminal Building, N1.7billion had already been paid to the contractor. And what is left to complete this project is justN300million. Hence, the National Assembly approved N500million for the project — which is even N200million more than was required. We refer Nigerians to a publication in THISDAY newspaper published in April and titled “Giving Enugu Airport a Facelift” and written by the newspaper’s Aviation correspondent, Chinedu Eze, where the Minister of State (Aviation), Mr. Hadi Sirika was quoted as saying “We just last week released N1.7billion to the contractor and hopefully also, within the shortest possible time, we will release another N300million for him so that they can quickly finish the airport terminal. This will bring the airport to its desired standard.”
25. In the case of statutory transfers where the increase in the National Assembly’s budget was isolated, it is important to note that the increase in the oil price benchmark from the projected $45 to the actual price of $51 generated additional N523.65 billion for the Federal Government.
26. Thus, based on agreement between the National Assembly and the Executive as represented by the Ministry of Budget and National Planning, the additional revenues were allocated among the three arms of government as follows:
a. The Executive’s proposal for the National Judicial Council was N100billion, however, the National Assembly appropriated N110billion which represents N10 billion increase;
b. The Executive’s proposal for the Niger Delta Development Commission (NDDC) was N71,195,023,529, however the National Assembly appropriated N81,882,555,891 — which represents a N10,687,532,363 increase;
c. An additional N33,981,437,188 was also appropriated for the outstanding liabilities to the NDDC by the Federal Government to enable the commission settle some of its contractors that were owed over N1 trillion ;
d. The National Assembly received an additional N14.5billion in funding;
e. In order to ensure that they are able to meet their mandate, the National Assembly increased the Public Complaint’s Commission’s budget from the N4,200,000,000 proposed by the President to N7,480,000,000 — which represents a N3,280,000,000 increase; and
f. Lastly, the National Human Rights Commission’s budget was increased from N1.5billion to N3,013,745,000, which represents a N1,513,745,000 increase.
27. It is therefore very clear that the three arms of government benefited from the increase which was mutually agreed on with the Ministry of Budget and Planning. In fact, we have correspondences addressed to the leadership of the National Assembly from Ministry of Budget making requests on how to spread the increment arising from the Benchmark differentials.
28. It should be noted that the budget of the National Assembly as at 2014 was N150billion, which is still N10.5billion more than our current figure despite increased national challenges that requires: frequent public hearings held on almost a daily basis at high costs; and intense oversight, which has become more thorough and incisive in order to check the Executive. The N139.5billion budget of the National Assembly represents less than 1.5percent of the entire N9trillion budget. Does it not make sense to use 1.5percent to protect the other 98.5percent?
29. The public should note that this increase in the legislature’s budget was also necessitated by the drastic inflation of the last four years; the need to rehabilitate the National Assembly’s deteriorating facilities, like the elevators which shutdown almost weekly; spending hundreds of millions to procure diesel to constantly power the entire complex; and the need to immediately upgrade the security facilities of the complex. It is important to point out at this juncture that the collapse of the CCTV system facilitated the mace theft in April.
30. Finally, the following 24 additions, which were done to the 2018 Appropriations Bill, due to the increase in the benchmark price of oil were duly appropriated by the National Assembly after full consultations, and in many cases, requests by the Executive branch through the Ministry of Budget and National Planning.
1. Augmentation to unity schools meal subsidy in Education Sector. 3,701,587,104
2. Outstanding liability on exchange rate differential for 2015 & 2016 Bea ongoing remittances to 12 Bea countries (scholarship). 3,265,720,064
3. Rehabilitation of block C, D, G & H at the Headquarters and Lagos state office of Federal Ministry Of Industry, Trade & Investment. 1,207,942,115.
4. Construction of Kashimbilla/Gamovo multipurpose dam. 2,000,000,000
5. Strengthening public health against LASSA fever/other outbreaks: procurement and installation of incinerators, procurement of personal protective equipment, ribavirin and laboratory reagents and training of health personnel, construction of isolation ward at university of Abuja teaching hospital, Gwagwalada. 2,000,000,000
6. Fast Power Programme Accelerated Gas and Solar Power Generation. 12,500,000,000
7. Expansion and reinforcement of infrastructure in 11 distribution companies to reduce stranded generation capacity. 30,000,000,000
8. Alternative energy development fund. 1,000,000,000
9. Completion of headquarters building (FMWA). 500,000,000
10. Construction of 3000 capacity maximum security prison in Abuja (Phase I). 6,031,862,972.
11. Procurement of 3 x jf17 thunder aircraft. 12,792,939,682
12. Security vote (including augmentation of shortfall in operational funds) for Nigerian Navy. 3,000,000,000
13. Department of state security – pensions (including arrears). 6,318,326,710
14. Contributions to international Organisations. 11,000,000,000
15. Contingency. 2,800,000,000
16. Military operation: Lafiya dole & other operations of the armed forces. 3,000,000,000
17. Subscription to shares in international Organisations. 11,000,000,000.
18. SDG special projects 3. 8,000,000,000
19. Contingency (capital). 2,000,000,000
20. Promotion, recruitment & appointment for police service commission. 5,393,947,080
21. Additional provision to some security agencies. 10,000,000,000
22. Additional provision of 82b naira on critical federal roads e.g. rehabilitation of Abuja-Kaduna-Zaria-Kano 10b naira, rehabilitation of Lagos-Badagry-Seme road 4b naira, rehabilitation/dualisation of Calabar-Itu-Ikot Ekpene-Aba-Owerri Road 7b. 92,000,000,000
23. Additional 12b naira to new federal universities. 12,000,000,000
24. National Institute for Legislative Studies (NILS). 4,000,000,000.
TOTAL. 245,512,325,726.
31. It is important to state that on many occasions, Mr. President emphasized to the nation the urgent need to develop our human capital, which are our people and especially the youth. It is on this note that the National Assembly should be commended to the degree that most of the human development projects were captured in the budget by the legislature.
32. Nigerians should note that due to the back and forth that we have experienced in the past, the improvement of the budgetary process should be a higher priority than trading blames. This trading of blames and unnecessary scapegoating is not healthy — as it creates needless conflict between the two arms of government.
33. Finally, in order to ensure that all Capital Projects in the 2018 budget receive their necessary financing in the 2018 budget, we call on Mr. President to present the borrowing plan to the National Assembly so that we can approve it.
34. We therefore want to urge all Executive appointees to ensure that they brief Mr. President with the truth and facts of their engagement, to promote healthy and harmonious relationships between the Executive and the Legislature.
Signed:
Senator Aliyu Sabi Abdullahi
Chairman, Senate Committee on Media & Public Affairs
Signed:
Hon. Abdulrazak Namdas
Chairman, House of Representatives Committee on Media & Public Affairs
From L-R Senate President BUKOLA Saraki, Deputy Senate President Ike Ekweremadu and Speaker of House of Representatives, Yakubu Dogara put heads together to defend National Assembly adjustment to 2018 budget
Why we preferred adjustment to 2018 Budget, By National Assembly
Nigeria’s National Assembly on Friday defended their adjustment to the original 2018 budget proposal send to them by the Executive, saying a good budget bill for Nigeria has to reflect the federal character principles and address the current and urgent national issues.
The lawmakers said Buhari’s bill lacked equity based on Federal Character principle and did not reflect the current and urgent national reality.
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Nigeria’s National Assembly to defend adjustments in budget on Friday
In a press briefing jointly signed by Senator Aliyu Sabi Abdullahi, Chairman, Senate Committee on Media & Public Affairs and Hon. Abdulrazak Namdas, Chairman, House of Representatives Committee on Media & Public Affairs, the legislators said they have a constitutional responsibility to adjust the document if it is not satisfactory.
“Adjustments and reductions in the locations, costs and number of projects approved were made in order to address geo-political imbalances that came with the Executive proposal. The introduction of new projects was done to ensure the promotion of the principles of Federal Character as contained in Section 14, subsection (3) of the 1999 Constitution of the Federal Republic of Nigeria as amended which states that “the composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such manner as to reflect the federal character of Nigeria…” The number of projects had to be increased in order to give a sense of belonging to every geo-political zone of the country to ensure socio-economic justice, equity, fairness, and to command National loyalty”, the statement said.
The lawmakers said it is within their mandate to make adjustments to the Executive bill.
“You may recall that when the National Assembly passed the 2018 budget, it gave reasons why the budget was increased and why certain projects and programmes had to be provisioned for. However, due to recent developments, it is once again necessary to let Nigerians know the justification for our actions on the 2018 budget, which were based on our Constitutional responsibilities.
“Within the context of the provisions of Sections 4, 80 and 81 of the Constitution, everything that the National Assembly has done is within its powers.
“Furthermore, Chapter 2 of the Constitution emphasizes the need for balance, inclusivity, and equity in the distribution of national resources. The annual budget, which symbolizes the distribution of these resources must reflect the aforementioned values, which we swore to uphold.
“These Constitutional provisions, in addition to a recent Court judgment have affirmed the fact that the budget process is a ‘joint effort’ that must reflect the input of both the executive and the legislature — the latter being the closest representatives of the people. However, we are fully aware that the Executive has the exclusive responsibility to execute all parts of the Appropriation Act once it is signed into law”.
READ THE FULL STATEMENT
THE PRESIDENT’S BUDGET SPEECH: OUR RESPONSE
Gentlemen of the Press.
We appreciate the fact that the 2018 Appropriations Law which was passed by the National Assembly on May 16th, 2018 was signed by President Muhammadu Buhari on Wednesday, June 20th, 2018.
In his speech at the signing ceremony, certain observations were raised about the work of the National Assembly and its Constitutional responsibility to modify and amend the budget estimates submitted to it by the Executive.
You may recall that when the National Assembly passed the 2018 budget, it gave reasons why the budget was increased and why certain projects and programmes had to be provisioned for. However, due to recent developments, it is once again necessary to let Nigerians know the justification for our actions on the 2018 budget, which were based on our Constitutional responsibilities.
Adjustments and reductions in the locations, costs and number of projects approved were made in order to address geo-political imbalances that came with the Executive proposal. The introduction of new projects was done to ensure the promotion of the principles of Federal Character as contained in Section 14, subsection (3) of the 1999 Constitution of the Federal Republic of Nigeria as amended which states that “the composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such manner as to reflect the federal character of Nigeria…” The number of projects had to be increased in order to give a sense of belonging to every geo-political zone of the country to ensure socio-economic justice, equity, fairness, and to command National loyalty.
Within the context of the provisions of Sections 4, 80 and 81 of the Constitution, everything that the National Assembly has done is within its powers.
Furthermore, Chapter 2 of the Constitution emphasizes the need for balance, inclusivity, and equity in the distribution of national resources. The annual budget, which symbolizes the distribution of these resources must reflect the aforementioned values, which we swore to uphold.
These Constitutional provisions, in addition to a recent Court judgment have affirmed the fact that the budget process is a ‘joint effort’ that must reflect the input of both the executive and the legislature — the latter being the closest representatives of the people. However, we are fully aware that the Executive has the exclusive responsibility to execute all parts of the Appropriation Act once it is signed into law.
It is our firm belief that if the President had been properly briefed by his appointees, he would not have raised most of the concerns that he did in his remarks at the budget signing. It is therefore inevitable for the legislature to give members of the public an insight into what transpired during the appropriations process and how we arrived at the decisions that are contained in the 2018 budget.
With the aforementioned background, let us respond to each of the issues raised.
On the issue of the period when the budget proposal was submitted and when it was passed by the National Assembly, it is necessary to remind Nigerians that although the budget was submitted in November, as at March 15th 2018 (5 months and 8 days after the budget submission), Mr. President was still directing the Secretary to the Government of the Federation to compel the Heads of Ministries, Departments and Agencies of the Federal Government to appear before the committees of the National Assembly to defend their respective budget. In addition, up till April (6 months after the budget submission), the Executive was still bringing new additions to the 2018 budget which the National Assembly in good faith and in the spirit of collaboration and harmonious working relationship accepted.
More importantly, the 2017 budget, was signed into law on June 5th, 2017 and by the provisions of Section 318 of the Constitution, which defines the Financial Year as “any period of 12 months beginning on the first day of January in any year, or other date as the National Assembly may prescribe” – the 2017 budget lapsed on the 5th of June 2018. This same provision is replicated in the 2017 Appropriation Act.
It is important to also note that if not for the fact that the 2017 budget elapsed on the 5th of June 2018, the Federal Government would not have recorded notable capital projects for the just ended financial year. This is because the Federal Government only started releasing funds for capital projects in December 2017 when the funds from the Federal Government’s loans were released and disbursed to contractors.
On the issue of an Organic Budget Law to improve the budgetary process, the proposed law is pending in the National Assembly and cannot be considered without the amendment of Section 81 of the 1999 Constitution (as amended) which gives the President the power to propose “estimates” at ANYTIME in the financial year. Nigerians need to know that during the last Constitutional Review exercise, the National Assembly in its wisdom amended this provision and it was approved by over two-thirds of the State Houses of Assembly. The new Constitution Amendment requires the President to submit the budget not later than 90 days to the end of the financial year. As of today, the President has not yet signed this Constitutional Amendment Bill which would have helped us to have a proper budget calendar, which shall eventually lead to the realization of the proposed January to December budget cycle.
It was stated that the legislature made cuts amounting to N347 billion which were meant for 4,700 projects. Again, these reductions of N347 billion were made from low priority areas to higher priority areas to support the generation of employment for our youth by MSMEs. We took the decision to reduce the funds in some areas in order to ensure balance and equity in the spread and utilization of our national funds. Additionally, the figures given amounts of the reductions made by the National Assembly were unduly exaggerated as we did not make any substantial reduction on any project to the extent of affecting its implementation.
To give the exact detail of the projects where we made deductions, it should be noted that the counterpart funding for the Mambilla Power Plant, Second Niger Bridge/Ancillary roads, the East-West Road, Bonny-Bodo Road, Lagos-Ibadan Express Road and Itakpe-Ajaokuta Rail Project, was reduced by only N3,956,400,290 – which represents only 1.78 % of the total N222,569,335,924 submitted by President Buhari. This left these projects with N218,612,935,634 which cannot negatively affect their implementation. This obviously contradicts the claim that these projects lost “an aggregate of N11.5 billion”.
Specifically:
The counterpart Funding for 3050mw Mambilla Hydropower Project was reduced from N8.5billion to N8.2billion (a reduction of N300million);
The construction of the Second Niger bridge including access roads phases 2a and 2b in Anambra and Delta states and other projects in the South East were reduced from N10billion to N9.1billion (a reduction of N900million);
The construction of Bodo-Bonny road with a bridge across the Opobo channel in Rivers State was reduced from N10billion to N8.7billion (a reduction of N1.3billion);
The funding for the Lagos-Ibadan Expressway was reduced from N20billion to N18billion (a reduction of N2billion), which would not significantly affect the construction of the road in one appropriations cycle;
The Railway Projects (Counterpart Funds): 1. Lagos-Kano (ongoing) 2. Calabar-Lagos (Ongoing) 3. Ajaokuta-Itakpe-Aladja (Warri) (Ongoing) 4. Port Harcourt- Maiduguri (New) 5. Kano-Katsina-Jibiya-Maradi in Niger Republic (New) 6. Abuja-Itakpe and Aladja (Warri)-Warri Port and Refinery including Warri new Harbour (New) 7. Bonny deep Sea Port & Port Harcourt of N162,284,335,924 was retained by the National Assembly as presented by Mr. President; and
The National Assembly increased the aggregate funding for the East-West Road from N11,285,000,000 to N12,085,000,000 because we realized the strategic importance of the road to the entire oil producing areas of our country and the fact that the road project has lingered for too long;
Addressing the issue of the Second Niger Bridge project, apart from early works, as of today, there is no existing contract for the Second Niger Bridge in spite of frequent requests from the National Assembly. The N900million reduced from the N10billion proposed by the Executive was deployed to fund ancillary roads that connect to the Bridge. It should again be noted that the N12.5billion and the N7.5billion appropriated for the Second Niger Bridge in the 2016 and 2017 budget by the National Assembly were never utilized for the project.
We also need to call the attention of the public to the fact that the National Assembly allocated an additional N2billion to the Enugu-Port Harcourt Expressway project. This was more than the Executive proposed.
As part of the implementation of the 2017 budget, the contracts for 15 roads were awarded by the Federal Executive Council with no budgetary provisions. Realizing the importance of these projects, the National Assembly decided to spread the N3.9billion saved from the earlier mentioned projects funding to facilitate the take-off of these projects that include: the rehabilitation of Ikorodu-Shagamu road in Lagos State; the rehabilitation of 9th Mile-Orakam to Benue Border; and the general maintenance of Pankshin – Ballang – Nyelleng – Sararele – Gindiri road in Plateau State, etc. These are the projects purported to be “project inclusions without conceptualization.” On these projects, the National Assembly needs to be commended by Mr. President for helping to to support the take-off of these awarded but unfunded projects.
Furthermore, it was stated that the budget of the FCT was cut by N 7.5 billion. This is true. The legislators stand by this decision because, through its oversight of the Federal Capital Territory (FCT), the National Assembly discovered that in the 2016 and 2017 budget cycle, there was a severe non-performance of the budgetary allocations to the FCT. During the two years in question, over 50% of the funds that were allocated and released to the FCT were not utilized. These funds were ultimately returned to the treasury. Hence, in order to ensure that scarce resources were allocated in accordance to ‘needs over wants’, funding for the FCT which has historically been under-utilised were allocated to other MDAs that have demonstrated the capacity to implement their allocation for the development of the nation and its people. It was part of the allocation that we spread over the roads for which contracts were awarded with no budgetary allocation.
On the provisions for strategic interventions in the health sector which were said to be cut by an aggregate of N7.45billion, it is on record that for the first time since the National Health Act was enacted in 2014, the National Assembly made provision of an additional N55billion for funding primary healthcare through the Basic Primary Healthcare Fund which will be sourced from 1% of the Consolidated Revenue Fund. Thus, contrary to the claim that the health sector suffered any budgetary cuts, we actually provided more funds that will make access to health services possible for over 180 million Nigerians.
The presence of this provision for primary healthcare will help us to eliminate the prevalence of maternal, infant and child mortality as well as create a healthier population. With this increased funding, we will be able to ensure that all Nigerian children get the necessary immunization that keeps various diseases away from them and ensure that mothers are well-catered for during childbirth.
On the issue of the 104 Unity Schools across the nation and the claim that N3billion was cut from their funding, Nigerians need to know that after careful consultation by the committees of the National Assembly with stakeholders in the sector, the National Assembly actually provided an additional N3.7billion more for meal subsidies in these 104 Unity Schools.
Furthermore, it was claimed that the provision for Construction of the Terminal Building at Enugu Airport was cut from 2 billion Naira to 500 million Naira and that this will further delay the completion of this critical project. However, for the avoidance of doubt, it is necessary to again clarify that during the budget defense and oversight processes, the National Assembly discovered that out of the N2billion contract for the Enugu Terminal Building, N1.7billion had already been paid to the contractor. And what is left to complete this project is justN300million. Hence, the National Assembly approved N500million for the project — which is even N200million more than was required. We refer Nigerians to a publication in THISDAY newspaper published in April and titled “Giving Enugu Airport a Facelift” and written by the newspaper’s Aviation correspondent, Chinedu Eze, where the Minister of State (Aviation), Mr. Hadi Sirika was quoted as saying “We just last week released N1.7billion to the contractor and hopefully also, within the shortest possible time, we will release another N300million for him so that they can quickly finish the airport terminal. This will bring the airport to its desired standard.”
In the case of statutory transfers where the increase in the National Assembly’s budget was isolated, it is important to note that the increase in the oil price benchmark from the projected $45 to the actual price of $51 generated additional N523.65 billion for the Federal Government.
Thus, based on agreement between the National Assembly and the Executive as represented by the Ministry of Budget and National Planning, the additional revenues were allocated among the three arms of government as follows:
The Executive’s proposal for the National Judicial Council was N100billion, however, the National Assembly appropriated N110billion which represents N10 billion increase;
The Executive’s proposal for the Niger Delta Development Commission (NDDC) was N71,195,023,529, however the National Assembly appropriated N81,882,555,891 — which represents a N10,687,532,363 increase;
An additional N33,981,437,188 was also appropriated for the outstanding liabilities to the NDDC by the Federal Government to enable the commission settle some of its contractors that were owed over N1 trillion ;
The National Assembly received an additional N14.5billion in funding;
In order to ensure that they are able to meet their mandate, the National Assembly increased the Public Complaint’s Commission’s budget from the N4,200,000,000 proposed by the President to N7,480,000,000 — which represents a N3,280,000,000 increase; and
Lastly, the National Human Rights Commission’s budget was increased from N1.5billion to N3,013,745,000, which represents a N1,513,745,000 increase.
It is therefore very clear that the three arms of government benefited from the increase which was mutually agreed on with the Ministry of Budget and Planning. In fact, we have correspondences addressed to the leadership of the National Assembly from Ministry of Budget making requests on how to spread the increment arising from the Benchmark differentials.
It should be noted that the budget of the National Assembly as at 2014 was N150billion, which is still N10.5billion more than our current figure despite increased national challenges that requires: frequent public hearings held on almost a daily basis at high costs; and intense oversight, which has become more thorough and incisive in order to check the Executive. The N139.5billion budget of the National Assembly represents less than 1.5percent of the entire N9trillion budget. Does it not make sense to use 1.5percent to protect the other 98.5percent?
The public should note that this increase in the legislature’s budget was also necessitated by the drastic inflation of the last four years; the need to rehabilitate the National Assembly’s deteriorating facilities, like the elevators which shutdown almost weekly; spending hundreds of millions to procure diesel to constantly power the entire complex; and the need to immediately upgrade the security facilities of the complex. It is important to point out at this juncture that the collapse of the CCTV system facilitated the mace theft in April.
Finally, the following 24 additions, which were done to the 2018 Appropriations Bill, due to the increase in the benchmark price of oil were duly appropriated by the National Assembly after full consultations, and in many cases, requests by the Executive branch through the Ministry of Budget and National Planning.
Augmentation to unity schools meal subsidy in Education Sector. 3,701,587,104
Outstanding liability on exchange rate differential for 2015 & 2016 Bea ongoing remittances to 12 Bea countries (scholarship). 3,265,720,064
Rehabilitation of block C, D, G & H at the Headquarters and Lagos state office of Federal Ministry Of Industry, Trade & Investment. 1,207,942,115.
Construction of Kashimbilla/Gamovo multipurpose dam. 2,000,000,000
Strengthening public health against LASSA fever/other outbreaks: procurement and installation of incinerators, procurement of personal protective equipment, ribavirin and laboratory reagents and training of health personnel, construction of isolation ward at university of Abuja teaching hospital, Gwagwalada. 2,000,000,000
Fast Power Programme Accelerated Gas and Solar Power Generation. 12,500,000,000
Expansion and reinforcement of infrastructure in 11 distribution companies to reduce stranded generation capacity. 30,000,000,000
Alternative energy development fund. 1,000,000,000
Completion of headquarters building (FMWA). 500,000,000
Construction of 3000 capacity maximum security prison in Abuja (Phase I). 6,031,862,972.
Procurement of 3 x jf17 thunder aircraft. 12,792,939,682
Security vote (including augmentation of shortfall in operational funds) for Nigerian Navy. 3,000,000,000
Department of state security – pensions (including arrears). 6,318,326,710
Contributions to international Organisations. 11,000,000,000
Contingency. 2,800,000,000
Military operation: Lafiya dole & other operations of the armed forces. 3,000,000,000
Subscription to shares in international Organisations. 11,000,000,000.
SDG special projects 3. 8,000,000,000
Contingency (capital). 2,000,000,000
Promotion, recruitment & appointment for police service commission. 5,393,947,080
Additional provision to some security agencies. 10,000,000,000
Additional provision of 82b naira on critical federal roads e.g. rehabilitation of Abuja-Kaduna-Zaria-Kano 10b naira, rehabilitation of Lagos-Badagry-Seme road 4b naira, rehabilitation/dualisation of Calabar-Itu-Ikot Ekpene-Aba-Owerri Road 7b. 92,000,000,000
Additional 12b naira to new federal universities. 12,000,000,000
National Institute for Legislative Studies (NILS). 4,000,000,000.
TOTAL. 245,512,325,726.
It is important to state that on many occasions, Mr. President emphasized to the nation the urgent need to develop our human capital, which are our people and especially the youth. It is on this note that the National Assembly should be commended to the degree that most of the human development projects were captured in the budget by the legislature.
Nigerians should note that due to the back and forth that we have experienced in the past, the improvement of the budgetary process should be a higher priority than trading blames. This trading of blames and unnecessary scapegoating is not healthy — as it creates needless conflict between the two arms of government.
Finally, in order to ensure that all Capital Projects in the 2018 budget receive their necessary financing in the 2018 budget, we call on Mr. President to present the borrowing plan to the National Assembly so that we can approve it.
We therefore want to urge all Executive appointees to ensure that they brief Mr. President with the truth and facts of their engagement, to promote healthy and harmonious relationships between the Executive and the Legislature.
Signed:
Senator Aliyu Sabi Abdullahi
Chairman, Senate Committee on Media & Public Affairs
Signed:
Hon. Abdulrazak Namdas
Chairman, House of Representatives Committee on Media & Public Affairs
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