Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, Wednesday said that mechanisms have been activated to tackle the growing inflation in Nigeria.
The minister also said that more scanners had been procured to be installed at the Nigerian ports to make them more resourceful and attractive and discourage the country from using other country's ports.
Ahmed made the disclosure while appearing before the House of Representatives committee on finance for 2022 budget performance and the 2023 budget defence.
Responding to the question by the chairman of the committee, Hon. James Faleke of whether there were efforts to arrest the growing inflation in the country which he said had become a concern to many Nigerians, the minister said that the Russian Ukraine conflict and the decision of some central banks in US and Europe affected the fiscal activities in Nigeria.
Ahmed however said that President Muhammadu Buhari has directed national food security council to brainstorm and make recommendations on the way forward.
She said: "On inflation, it's a very serious situation where Nigeria's inflation is now 23% . The inflation in Nigeria has a number of components, one of them is imported inflation, occurrences in other countries also affects Nigeria. For example the war in Ukraine and Russia has an impact on Nigeria in the sense that some of the inputs for food production are affected. Also the decisions taken by the central banks in USA, Europe on monetary tightening has also an impact on their own level of inflation that also affects our country. But in Nigeria we also have food inflation, and because of the high cost of diesel we find this showing up in food prices, so when farmers produce their goods and they have to transport them to market the increasing cost of transportation is impacting the food. What the central bank is doing vis continuing to monitor inflation by money tightening and mopping up liquidity.
"On the side of the government, the President has authorized the National food security council and we have held a meeting on how some support will be provided. The committee will be meeting again in the next couple of days to provide recommendations to Mr. President."
Speaking on the measures to make the nation's port attractive to importers, Ahmed said that the government has procured large scanners to be installed at the facilities.
She also stated that all government independent revenue has been deployed to the Treasury Single Account (TSA).
"On why our ports are not attractive, it's a very big problem. The ports congestion and the unfortunate reality is a lot of importers prefer to go to ur neighbors.
"On the measures we are taking, the ministry of finance we have provided and bought some very large scanners. Our assessment is that it will help to fasten the clearing process and decongest the ports. The ports authority on their own is trying to reorganize ports to attain better efficiency including control of entry and exit to the ports.
"The rail line from Lagos to Abuja is also being extended so that containers even before inspection can be taken out of the Apapa ports to some other locations for inspections to be done. This will enable Nigeria attract its own business.
"On independent revenue and deployment of single treasury account, it has been deployed to all government agencies, there's no agency of government that's having their accounts outside of the treasury. The accountant general will provide more information on that", she said.
Giving a review of the 2022 budget performance earlier, the Minister said that N3.52 trillion was for debt service in the N17.32 budget.
She also said that the level of borrowing was N1.26 trillion ahead of July, 2022 target.
According to her, in the 2022 budget, the government had a proposal of N6.1 trillion new borrowings, N3.5 trillion from domestic sources and N2.5 trillion from foreign sources.
But as of August, the minister said that the federal government had borrowed N4.06 trillion from local sources, including from the Central Bank of Nigeria.
Ahmed however revealed that crude oil theft and subsidy deductions on Premium Motor Spirit (PMS) by the Nigerian National Petroleum Company Limited (NNPCL) were factors responsible for the poor performance of the overall budget even as she assured that the government was mindful of the development and was working on the safety nets to cushion the effects on the economy.
"The aggregate expenditure for 2022 is estimated at N17.32 trillion, with a prorata spending target of N11.55 trillion at the end of August.
"The actual spending as of August 31 was N9.56 trillion. Of this amount, - N3.52 trillion was for debt service, and N2.89 trillion for Personnel costs, including Pensions. N1.78 billion was released for capital expenditure.
"The fiscal deficit for 2022 is estimated at N7.35 trillion. The N5.33 trillion deficit as at August, is N430.82 billion above the prorata level.
The level of borrowing is N1.26 trillion ahead of July target.
"Full implementation of the 2022 budget is challenged particularly by oil revenues trailing at 27.1% performance as at August 2022.
"Crude oil production challenges and PMS subsidy deductions by NNPC
constitute significant threat to the achievement of our revenue growth targets, as seen in the 2022 performance up to August.
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"Revenue generation remains the major fiscal constraint of the federation. The systemic resource mobilization problem has been compounded by recent economic recessions.
"Efforts have been mainly focused on improving tax administration and collection efficiency. These efforts are bearing fruits with non-oil taxes mostly performing above target for the period.
"Overall fiscal risks are somewhat elevated, following weaker-than-expected domestic economic performance and structural issues in the domestic economy.
"The goal of fiscal interventions are to further stimulate the economy through
carefully calibrated regulatory/policy measures designed to boost domestic value-addition, de-risk the enterprise environment, attract external investment and sources of funding, etc. Bold, decisive and urgent action is urgently required to address revenue underperformance.
"However, in exercising its policy options, Government will remain mindful of the need to provide safety nets to cushion the impact of reform measures on the vulnerable segments of the population", Ahmed said.
The budget defence session also featured the minister of state for budget and national planning, Mr. Clem Agba who gave highlights of the performance of the ministry's 2022 budget; the acting accountant general of the federation, Silvia Okoliaboh and the Director -General of Budget Office, Ben Akobueze and other ministry's officials.
