22 June 2018

Nigeria: 2018 Budget - No Security Vote for Presidency, Says Udoma

Abuja — The Minister of Budget and National Planning, Senator Udoma Udo Udoma, Thursday stated that there was no security vote for the presidency, debunking the report by Amnesty International (AI) titled: "Camouflaged Cash: How 'Security Votes' Fuel Corruption in Nigeria", which indicated, in part that the presidency is not only appropriating, but "has increased the number of security votes tucked into the federal budget in the last two years".

Responding to questions during the 2018 budget briefing session in Abuja, the minister said it was necessary to state clearly that "there is no line item as Security Vote in the State House budget," adding that "provisions for security-related matters are contained in the detailed budgets of the Ministry of Defence, Office of the National Security Adviser (ONSA), Department of State Security (DSS) etc."

He added: "There are also provisions for military interventions in the North-east (insurgency) - Operation Lafiya Dole, as well as other specific operations of the Armed Forces such as Operation Python Dance, Operation Crocodile Smile and very recently, the Operation Cat Race, etc."

Udoma pointed out that owing to the growing number of internal security issues, a provision of N75 billion was made for these exercises in the service-wide votes, not State House vote, in 2018, stressing: "At appropriate times, the required funds are disbursed by application from the relevant agencies supervising the exercises."

In the report, the global anti-graft watchdog Amnesty International defined security votes as "budgeted funds provided to certain federal, state, and local government officials to spend at their discretion... They are budgeted separately from planned security expenditures such as personnel salaries, allowances, equipment, training and operational expenses".

Giving a breakdown of the N9.12 trillion budget, the minister said that it is predicated on an oil production of 2.3 million per day (mbpd), benchmark oil price of $51 per barrel and an exchange rate of N305/$.

It is also anchored on an inflation rate of N12.4 per cent, a 3.5 per cent real gross domestic product (GDP), as well as N107.96 trillion nominal GDP and N87.95 trillion nominal consumption.

The budget, Udoma noted, has a deficit of N1.95 trillion, N520 billion for statutory transfers, an oil revenue of N2.99 trillion and non-oil revenue of N4.18 trillion (N7.17 trillion).

The sum of N2.01 trillion is also provisioned for debt service, while N3.51 trillion is for recurrent expenditure, just as the capital expenditure component is N2.87 trillion, up from N2.36 trillion in 2017.

According to him, capital spending accounts for 31.5 per cent of total FGN expenditure in 2018.

He disclosed that the budget deficit is to be financed mainly by borrowing N1.643 trillion, putting the domestic component of the borrowing at N793 billion, while the foreign component accounts for N849 billion.

A total of N306 billion is expected from privatisation proceeds and N5 billion from sale of other government property to part-finance the deficit.

He said: "A total of N306 billion is expected from privatisation proceeds and N5 billion from sale of other government property to part finance the deficit.

"We have reflected projected proceeds from oil assets ownership restructuring as revenues for transparency and monitoring as the expected funds have been earmarked to fund critical capital projects."

The distribution of expected federal government's revenue include oil revenue - 41.7 per cent, Company Income Tax (CIT) - 9.2 per cent, Value Added Tax (VAT) - 2.9 per cent, Customs - 4.5 per cent, and Independent Revenue - 11.8 per cent.

Others are recoveries - 7.2 per cent, Voluntary Assets and Income Declaration Scheme (VAIDS)- 1.2 per cent, Signature Bonus - 1.6 per cent, Joint Venture Equity Restructuring - 9.9 per cent, Grants and Donor Funding - 2.8 per cent.

The minister, who put the recoveries (including looted funds) at N374 billion, also revealed the sectoral breakdown of the allocations for the fiscal year.

The breakdown showed that the Ministry of Power, Works and Housing again received the lion's share of N715 billion (capital and recurrent), followed by Interior (N577 billion), Ministry of Defence (N576 billion), Education (547 billion), and Health (N356 billion).

Others are Transportation (N267 billion), Agriculture and Rural development (N203 billion).

The North-east intervention programme also got an allocation of N45 billion.

Giving an insight on why the interior ministry received high allocation, the minister noted that the country still has internal security challenges.

Also giving details of the recurrent non-debt expenditure, Udoma said the personnel cost of ministries, departments and agencies (MDAs) account for 60 per cent of non-debt recurrent spend, while 10 per cent is allocated to Social Investment Programme, seven per cent for overheads, and 10 per cent for pensions.

Others are two per cent to Presidential Amnesty Programme, nine per cent to other service-wide votes and five per cent as provisions for the Power Sector Recovery.

The minister assured Nigerians that despite the odds against the implementation of the budget, the federal government was determined to ensure that the fiscal document is effectively executed.

He called for the cooperation of the National Assembly in realising this, noting that the executive arm of government would articulate a supplementary budget soonest.

Meanwhile, more reactions to President Muhammadu Buhari's speech during the budget signing ceremony on Wednesday drew more flak from federal legislators Thursday with the Chairman of the Senate Committee on Federal Capital Territory (FCT), Senator Dino Melaye, accusing the president of playing to the gallery with his allegation that the National Assembly padded the 2018 budget.

Melaye in a one-page statement Thursday, advised the president to refrain from playing to the gallery and milking the naivety of the masses on the budget issues.

According to the senator representing Kogi West, "I notice that President Buhari is trying to whip up sentiments against the National Assembly again by alleging that the 2018 budget was padded."

He, however, explained that what the president was authorised to do constitutionally was to present the National Assembly with a bill that would be worked upon by the legislature.

"The reason the constitution directs the bill to be submitted to the National Assembly is that it expects the National Assembly to vet it and make inputs into such a bill before passing it as the Appropriation Act. The National Assembly is not just expected to rubber-stamp whatever bill the president presents. If this was the norm then there would have been no need for the constitution to direct that the bill be submitted to the National Assembly in the first place," he said.

Also reacting, the South-east caucus in the Senate Thursday expressed concern over the slashing of the 2018 budgetary allocation for Second Niger Bridge and Enugu Airport Terminal.

The Chairman of the caucus, Senator Enyinnaya Abaribe, absolved senators of having a hand in the slashing of the allocation by the National Assembly.

He said the caucus was jolted to hear that the N2 billion allocated for Enugu Airport terminal, which was sustained by both Senate and House of Representatives Committees on Aviation was slashed to N500million

"We will like to know at what point were the allocations to both the Second Niger Bridge and Enugu Airport Terminal slashed. We definitely want to know what really transpired," the caucus said.

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