•To be partly financed with PIDF
•Says N50bn fund domiciled in National Sovereign Wealth Investment Authority
•FG eyes $2.5bn loan from World Bank
CHIGOZIE AMADI
Minister of Budget and Economic Planning, Senator Atiku Bagudu, yesterday, explained that the proposed 2024 Supplementary Appropriation Bill will be partly funded with the N50 billion Presidential Infrastructure Development Fund (PIDF), currently domiciled in the National Sovereign Wealth Investment Authority (NSWIA). Bagudu stated this while briefing the Joint Senate and House of Representatives Committees on National Planning and Economic Affairs over the proposed Supplementary Appropriation Bill.
He said the N50 billion in PIDF would not be enough to fund the Renewed Hope Transformational Projects, hence, the federal government’s decision to approach the World Bank for a $2.5 billion loan, among other revenue sources.
He disclosed that the World Bank management would meet soon to take a decision on the loan request.
President Bola Tinubu had, penultimate week, told the joint session of the federal legislature that he would soon send the proposed money bill to the federal lawmakers for approval.
The minister told the committee that the entire the supplementary budget, which was still being prepared, would be spent on four identified transformational projects.
He listed the projects to include Lagos – Calabar Coastal Road; the proposed Sokoto – Badagry Road; completion of all ongoing railway projects, which the federal government had yet to provide counterpart funding for
Bagudu also said the proposed money bill would fund the rehabilitation and expansion of dams and irrigation schemes in order to support increased production within the economy.
He added that the supplementary budget would provide more money to support Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) projects to provide for more energy competitiveness.
He said a study done by the Federal Ministry of Science, Technology and Innovation showed that CNG vehicles were cheaper to maintain than petrol-powered ones.
The minister added the trans-Sahara highway, which the current administration inherited, would also be funded with the supplementary budget.
He said, “The supplementary budget that was announced or rather was mentioned, came about when Mr. President presented a memo to the Federal Executive Council.
“In the memo, he said that he inherited the Presidential Infrastructure Development Fund, which was domiciled in the National Sovereign Wealth Investment Authority.
“He has also identified transformational projects, including Lagos – Calabar, Coastal Road; proposed Sokoto – Badagry Road; completion of all ongoing railway projects, which we have not provided counterpart funding.
“We also plan to fund the rehabilitation and expansion of dams and irrigation schemes in order to support increased production within the economy.
“Last but not the least, more money to support CNG, LNG.”
Bagudu said, “The three roads, dams and irrigation, and railways is what Mr. President designated as the infrastructure, renewed health infrastructure priority items.
“So that’s what he directed that the ministry prepares for appropriation supplementary appropriation bill.
“We have not finished work on the bill, we have not submitted the supplementary appropriation draft to the Federal Executive Council yet.
“So many people have approached the ministry and, indeed, leadership of the National Assembly as well as many members asking about the renewed hope supplementary appropriation.”
The minister also said the current agitation by organised labour over minimum wage would be considered in the proposed legislation.
He said, “We are not clear how much revenue we have, given the challenges of the moment.
“Yes, we have done some scenarios given the exchange rate fluctuation and the impact of the budget and even scenarios given the current minimum wage negotiation that is ongoing.
“This is because even at N60,000, even at N62,000, that immediately doubles the minimum wage.
“So it was the forecast that even at the lowest level, it will increase inflation rate and that might affect interest rates, which will affect in turn, economic activity, debt surges, among others.
On the 2024 budget performance, the minister explained why some Ministries, Departments and Agencies (MDAs) of government had not started projects.
He said the federal government had mandated the finance ministry to take over payment of some major contractors.
Bagudu said, “Unlike the usual practice where every quarter the ministry of finance sent money to MDAs, depending on what the envelope size is. That has been discarded and replaced by the bottom up cash.
“Under our procurement laws, ministries and MDAs are supposed to commence procurement as soon as the budget is passed into law.
“So most MDAs are in that process now. The first quarter capital releases are not high because most MDAs have not yet awarded the contracts and consequently they have not put any request for cash.
“We believe that it will pick up in this second quarter and subsequent quarters. So the budget performance will be difficult as procurement processes are completed by MDAs.
“Equally, as part of an effort for better treasury management, the Federal Ministry of Finance has now decided that for some category of contracts, they will be doing the payments.
“So again, that is intended to ensure that financial resources are pooled in one place, rather than sent to various MDAs awaiting processes. So those are the broad brief on the 2024 budget.”
The chairman of the senate committee, Senator Yahaha Abdullahi, suggested amendment to the 2024 budget, instead of a fresh appropriation, because of the huge cost of processing it.
Abdullahi said the executive arm of government was at liberty to determine how it wanted to get its appropriation bill approved by the legislature.
