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Market Digest Nigeria

News Highlights

Nigerian Newspaper Headlines (9th October, 2019)

budget

The National Assembly has slated November 28 for the passage of 2020 appropriation bill, the announcement was made shortly after president Muhammadu Buhari presented the budget to the house.

Major Nigerian Newspapers have more on these stories:

budget

Punch Newspaper:  National Assembly sets November 28 target for budget passage

The National Assembly on Tuesday said it would pass the 2020 Appropriation Bill  on November 28, 2019. The Chairman of the House Committee on Media and Public Affairs, Mr Benjamin Kalu, made this known when he addressed journalists after the budget presentation  by President Muhammadu Buhari. He stated that the lawmakers had the desire to reverse the budget calendar to January-December.

Kalu said, “We are committed to realising this switch from what it used to be to what it ought to be – January-December budget calendar. Luckily enough, the House has inaugurated all the standing committees. The House, in order, to achieve this objective of reversing the calendar will be suspending the plenary – not suspending the House – to enable us to go into our various committees to interact with the MDAs (ministries, departments and agencies. To achieve that, we have set up a road map.” The House’ spokesman said while the appropriation bill was presented on Tuesday, the House would debate the general principles of the budget on Wednesday and Thursday, after which it would be passed for second reading and referred to the standing committees, also known as Sub-Committees on Appropriations.

Kalu also said the House would adjourn plenary on Thursday till October 30, 2019, to allow the committees to hold budget defence sessions with Federal Government ministries, departments and agencies. He added that the leadership of the House would meet with the leaders of the standing committees at 7pm on Thursday to discuss the road map for timely passage of the budget. The lawmakers also said the National Assembly would hold a public hearing on the budget between October 21 and 22, 2019.

Kalu said, “From Wednesday, the 30th of October to Tuesday, the 5th of November, 2019, we are going to have submission and defence of budget reports to the Committee on Appropriations. It is important to note here that the termination date for submission of budget and defence of the same budget will be on the 5th of November. After the 5th of November, we will not accept any submission or defence by any MDA. “From Wednesday, the 6th of November to the 27th of November, 2019, we are going  to have the collation and harmonisation of reports by the Appropriations Committee. It is our expectation – and we are working towards that with this road map we have set – that on the 28th of November, 2019, we will have the presentation of the report by the Committees on Appropriations to the Senate and the House. What it means is that our expectation is that we want to be done with this exercise on the 28 th of November, 2019. We will be done with the budget. “Our idea is that from the beginning of December 2019, the budget is ready. You are aware that if we are able to achieve this by the first week of December or the last week of November, we will be on time to make sure that from January 2020, we will kick-start with our new budget of 2020. It is a great achievement.”

Meanwhile, the Presidency dismissed the fears by Nigerians that the increment of the Value Added Tax from 5 per cent to 7.2 per cent, as reflected in the 2020 budget, would cause more hardship for them. The Senior Special Assistant to the President on National Assembly Matters (House of Reps), Mr Umar el-Yakub, who addressed journalists after the budget presentation, said the revenue from the higher VAT would be used to develop the health and education sectors.

When asked if the Presidency was aware that VAT increment could worsen the plight of Nigerians, el-Yakub said, “No.” He added, “The government is proposing a marginal increment of the VAT to finance the budget. As you heard Mr President say, most of the money would be going to the state governments. However, to explain further, there was a long list; Mr President took time to read out the list of those exempted from the VAT increment. And certainly, those that have been exempted, which are essentially food, medicine, education and health care, are actually those that would have affected the ordinary Nigerians. “So, the straight answer to your question will be no. I believe that it will not worsen the plight of the ordinary Nigerians. As a matter of fact, considering that the revenue  generated would be invested in infrastructure, it would further enhance the welfare and wellbeing of ordinary Nigerians.” El-Yakub also stated that the legislature would approve the new VAT rate before the executive would implement it.

2020 budget will help fight insurgency, revamp power, others – APC

Meanwhile, the All Progressives Congress on Tuesday said the proposed 2020 budget of N10.33trn would help to fight insurgency, revamp power sector, rail and road infrastructure, among others. It commended the executive and legislative arms for their commitment to ensure the return of the passage of budget to January-December cycle.

The APC, in  a statement by its National Publicity Secretary, Lanre Issa-Onilu, said the budget was aimed at consolidating the gains the Buhari administation had made in revamping power, rail and road infrastructure. It stated, “It will help in the fight against emerging crimes, insurgency and rehabilitation, rebuilding of the North-East particularly through the newly-established North-East Development Commission, among other critical interventions.”

Quoting the President’s  budget speech, the statement added, “There is a renewed government’s commitment to plugging revenue leakage with the continued strict implementation of the Treasury Single Account. “We congratulate the leaders of the two chambers of the 9th National Assembly –Senate President Ahmed Lawan and Speaker of the House of Representatives, Rt. Hon. Femi Gbajabiamila – for creating a convivial environment for the budget presentation exercise, a welcome departure from the usual tense and adversarial atmosphere of the previous four years. “The party is confident that the patriotic disposition of the leaders and members of the 9th National Assembly would ensure a cordial relationship with the executive arm, which would surely translate to good governance and proper implementation of the administration’s Next Level plans for Nigerians.”

Also, the Buhari Media Organisation said the budget  would go a long way in ensuring that the country finally began implementing its national budget from the first day of the fiscal year. In a statement by its Chairman, Niyi Akinsiju, and the Secretary, Cassidy Madueke, the BMO stated that the move was in line with  Buhari administration’s goal of leaving the country better than it met it.

The statement said, “For far too long, Nigeria has had a budget cycle that runs contrary to what is obtainable in developed economies and other countries on a growth trajectory.” According to the BMO, in line with his pledge to effect a quantum change in the polity, the President has proved what three predecessors failed to ensure normal budget cycle.

The group said,  “He (Buhari) did not only dare to be different by sending the MTEF/FSP on time, but also in ensuring that  the budgets of the country’s major government owned enterprises are captured in the national budget estimates. “So, for the first time since the return of democracy, Nigeria is on the verge of having a budget cycle that not only aligns with the business cycle of many financial institutions and other large corporations, but will also provide a leeway for robust planning in the economy.”

The BMO noted that by announcing that emphasis would be on completion of ongoing projects rather than starting new ones, the President has shown his readiness to depart from previous trends where annual budgets focused on new projects. The statement added, “Nigerians must have heard him also emphasising government leveraging private sector spending through tax credit schemes, as well as ensuring a reduction in items that are considered as VATable. “These, among others, show that this is indeed a budget on the philosophy of sustainable and inclusive economic growth and shared prosperity.”

The BMO hailed the leadership of the National Assembly for the convivial atmosphere that pervaded the legislative complex during the budget presentation. It also called on the Federal lawmakers to ensure that the passage of  the 2020 Appropriation Bill in good time to ensure that the Buhari administration’s goal of institutionalising the January to December budget cycle was realised.

budget

Guardian Newspaper: Why Buhari’s N10.33 trillion budget drew knocks, kudos

Some analysts yesterday reviewed President Muhammadu Buhari’s N10.33 trillion 2020 budget proposal, warning that the nation risks bankruptcy unless it curbs its penchant for borrowing. Buhari had presented the document to a crowded joint session of the National Assembly saying: “The sum of N8.155 trillion is estimated as the total Federal Government revenue in 2020 and comprises oil revenue N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenues of N3.7 trillion.”

The budget deficit, projected to be N2.18 trillion, includes drawdowns on project-tied loans and related capital expenditure. He explained that the deficit represents 1.52 per cent of the estimated GDP, well below the 3 per cent threshold set by the Fiscal Responsibility Act of 2007, and in line with the ERGP target of 1.96 per cent. “The deficit will be financed by new foreign and domestic borrowings, privatisation proceeds, signature bonuses and drawdowns on loans secured for specific development projects,” Buhari had said.

But Development Economist, Mr. Odilim Enwegbara asked: “For how long do we have to have such a prodigious Federal Government, a government that can’t stop its borrowing spree? Today, the debt service to revenue ratio is approaching 80 per cent with domestic debt approaching 70 per cent of the country’s overall debt stock. Can we continue to borrow at such unheard-of high cost, especially from our commercial banks to the extent that these banks can’t stop conniving with government agencies responsible for revenue generation to allow high deficit gaps that have meant more and more borrowing from banks to meet the shortages? “With now close to N30 trillion debt and more than N2 trillion annually spent on mere debt service, and without the economy growing in a way that grows government revenues, how does the government want to repay the huge debt, especially at a time its recurrent spending continues to grow in such geometric progression?”

He, therefore, cautioned that unless drastic measures are taken to reposition the economy and grow it with millions of jobs, the country could go bankrupt. The Coalition of United Political Parties (CUPP) issued a statement yesterday saying the proposal is an “empty document not worth the paper on which it was written. It is a final weapon to consolidate Buhari’s next level of economic ruins, poverty, looting and visionlessness.”

The Peoples Democratic Party (PDP) also said the proposal would further impoverish Nigerians, urging the lawmakers to amend it to serve the interest of the people. The opposition party described it as “hazy and showing streaks of padding, fraudulent duplications, replete with false performance indices, deceptive projections and inexplicable expenditure assertions which create openings for continued looting of our national patrimony by leaders of the All Progressives Congress (APC) and persons close to the presidency.”

It said: “It is inexcusable that despite the huge natural resources at President Buhari’s reach, he articulated a N10.33 trillion budget that is completely lacking in concrete wealth creation strategy but relies on further squeezing of Nigerians through excruciating taxes, levies and agonising tolls.” It said further: “Mr. President failed to explain why his administration has remained hugely corrupt and how his presidency depleted our foreign reserves to an all time low $41,852 billion, accumulated huge foreign and domestic debts, and kept the naira at its knees at about N360 to $1USD under his watch.”

President Buhari had explained: “The expenditure estimate includes statutory transfers of N556.7 billion, non-debt recurrent expenditure of N4.88 trillion and N2.14 trillion of capital expenditure (excluding the capital component of statutory transfers). Debt service is estimated at N2.45 trillion, and provision for Sinking Fund to retire maturing bonds issued to local contractors is N296 billion.”

According to him, “The sum of N556.7 billion is provided for Statutory Transfers in the 2020 Budget and includes: N125 billion for the National Assembly; N110 billion for the judiciary; N37.83 billion for the North East Development Commission (NEDC); and N44.5 billion for the Basic Health Care Provision Fund (BHCPF).” On the basic assumptions of the proposal, he stated: “We have adopted a conservative oil price benchmark of US$57 per barrel, daily oil production estimate of 2.18 mbpd and an exchange rate of N305 per US Dollar for 2020. We expect enhanced real GDP growth of 2.93 per cent in 2020, driven largely by non-oil output, as economic diversification accelerates, and the enabling business environment improves. However, inflation is expected to remain slightly above single digits in 2020.”

He told the lawmakers: “The non-debt recurrent expenditure includes N3.6 trillion for personnel and pension costs, an increase of N620.28 billion over 2019. This increase reflects the new minimum wage as well as our proposals to improve remuneration and welfare of our police and armed forces.” Some of the key capital allocations are: works and housing, N262 billion; power, N127 billion; transportation, N123 billion; Universal Basic Education Commission, N112 billion; defence, N100 billion; zonal intervention projects, N100 billion; agriculture and rural development, N83 billion; water resources, N82 billion; and Niger Delta Development Commission, N81 billion.

Others are: education, N48 billion; health, N46 billion; industry, trade and investment, N40 billion; North East Development Commission, N38 billion; interior, N35 billion; social investment programmes, N30 billion; Federal Capital Territory, N28 billion; and Niger Delta Affairs Ministry, N24 billion. The president also hinted that amendments would be made to relevant laws to improve the tax system and boost revenue. To this extent, he announced that a finance bill would be sent to the National Assembly. He said the bill has five strategic objectives: promoting fiscal equity by mitigating instances of regressive taxation; reforming domestic tax laws to align with global best practices; introducing tax incentives for investments in infrastructure and capital markets; supporting micro, small and medium-sized businesses in line with the Ease of Doing Business Reforms; and raising revenues for government.

The president noted: “The draft finance bill proposes an increase of the VAT rate from 5 per cent to 7.5 per cent. As such, the 2020 Appropriation Bill is based on this new VAT rate. The additional revenues will be used to fund health, education and infrastructure programmes. As the states and local governments are allocated 85 per cent of all VAT revenues, we expect to see greater quality and efficiency in their spending in these areas as well.”

Senate President Ahmad Lawan said the lawmakers would expedite action on the proposal. According to him, “The Ninth National Assembly has shown capacity, commitment and willingness to treat legislative matters that will impact on the lives of our citizens with dispatch and every sense of urgency.” He therefore declared: “In order for timely passage, all ministries, departments and agencies (MDAs) are expected to appear before the committees for the defence of their budget estimates within the month of October. We have earmarked the month of October to be the sole window for all budget defence activities, this year, by all MDAs.”

The Director General of the budget office, Mr. Ben Akabueze, meanwhile, has allayed the fear that the increase in Value Added Tax (VAT) from five to seven per cent would worsen the plight of ordinary Nigerians. Fielding questions from reporters at the National Assembly complex in Abuja, he said: “VAT is not really a tax that concerns the common man. It’s a consumption tax. You only pay it when you consume the items it applies to. For instance, if you go to the market, buy your food ingredients, go home and cook the food, nobody charges you VAT. But if you go to a restaurant, sit down there and eat, they charge you VAT. The common man doesn’t go to expensive restaurants to eat. So, let’s not make this look like something that has to do with the common man.”

He added: “The budget is designed to sustain expenditure and that is why it still remains a deficit budget because that is the only way to stimulate the economy to ensure growth. As people spend, businesses make profit to hire more people. The best way to take people out of poverty is to put them in jobs. “There has been great care not to hurt the poor and vulnerable so that they would not suffer. Items on the exemption list have been expanded to ensure new introduction establishing a threshold for whom the VAT would apply, so that small businesses won’t be affected.”

But Senator Ali Ndume (APC, Borno), who described the budget presentation as historic, was cautious about jumping at conclusions. “I am trying to study the budget…the explanation given by the executive on VAT. I have to study it, so you don’t oppose it in ignorance. I have to be sure it does not affect the constituency I come from, the poorest of the poor. Instead of taxes that will have negative effects on the masses, like VAT, communications tax, as practised in other developed countries, could be adopted,” he said. In other reactions, a former presidential economic adviser, Dr. Magnus Kpakol, said the country’s recurring $30 billion national budget is too little to power growth, given the rise in population figures. “We should be concerned about how the numbers and policies in the yearly budgets affect the ordinary people. We should be thinking of improving what successive governments have not done well,” he said.

budget

Sun Newspaper: 9 kidnapped in Abuja

Nine persons, including a 12-year-old boy, have been kidnapped in Pegi community, a resettlement area in Kuje Area Council of the Federal Capital Territory (FCT), Abuja.  The victims were kidnapped on Monday night by about 20 gunmen dressed in military camouflage.

Chairman of Pegi Community Development Association (PECDA), Taiwo Aderibigbe, confirmed the incident to newsmen. He said the local vigilantes that witnessed the abduction revealed that the kidnappers were in camouflage and immediately took the victims into a nearby bush.

During the attack leading to the abduction, the daredevil kidnappers were said to have shot and deflated the tyres of the pickup van conveying the victims before taking them into the bush. One person was said to have been seriously injured during the attack and is receiving treatment at a medical facility in the area.

Daily Sun gathered that the kidnappers have already contacted the families of the victims, demanding N10 million ransom for each. This is the second time kidnapping incident would take place in the community. In 2018, four people were kidnapped along the same path to the community that houses naval quarters.

A naval officer and one civilian were seriously injured at the scene, which is less than 300 metres to the community, in the December 6, 2018 incident. Similar to what happened yesterday, the victims were stopped while going home around the same time in the night.

Meanwhile, the FCT Police Command said it has launched a manhunt for the kidnappers. The police public relations officer in the FCT, Anjugurl Manzah, said the police are making concerted efforts to rescue the victims alive and appealed to the public to come up with information that would lead to the rescue of the victims.

Manzah said: “The FCT command wishes to inform the public that it is making concerted effort to rescue the persons kidnapped around Pegi community on Monday, October 7, at about 9pm. “Though details of the incident is still sketchy, the command is urging members of the public to be calm while the police intensify effort to rescue and reunite victims with members of their families. “Meanwhile, we call on the public to be security conscious and provide information to the police and other relevant security agencies on suspicious movements and activities within their communities. “The command reassures members of the public of its commitment to protect lives and property in the FCT.”

 

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