*Spend two days debating Tinubu's 43 Paragraph Budget Speech
The Senate yesterday passed for second reading the 2024 Appropriation Bill of N27.5 trillion presented before the joint session of the Senate and House of Representatives by President Bola Tinubu on Wednesday.
With the Appropriation Bill scaling second reading, the Senators only spent two days in debating the 43 paragraph speech presented by President Tinubu and the four page lead debate by the Senate Leader, Senator Bamidele Opeyemi.
The Lead Debate has only the Basic Assumptions and Parameters, 2024 Revenue Estimates and planned expenditure without sectoral allocation, among others.
Recall that the Senate began debate on the general principles of the 2024 Appropriation Bill of N27.5 trillion on Thursday.
The Senate has resolved to adjourn plenary till December 12 to allow Ministries, Departments and Agencies, MDAs appear before various Standing Committees to defend the proposals, and Committee on Appropriations to submit Report on December 19.
President Tinubu had on Wednesday presented before the National Assembly a total aggregate expenditure of N27.5 trillion 2024 Appropriation Bill, just as he had announced his administration's resolve to adopt the "revised 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP)" as the parameters for the 2024 budget. He also announced the administration's plan to grow the economy by a minimum of 3.76 percent, above the forecasted world average.
President Tinubu while presenting the N27.5 trillion 2024 Appropriation Bill tagged the budget of renewed hope, promised that the nation's internal security architecture would be overhauled to enhance law enforcement capabilities with a view to safeguarding lives, property, and investments across the country.
Recall that while presenting a lead debate on the general principles of the budget, the Senate Leader, Senator Bamidele Opeyemi, noted that the budget would prioritise electricity, procurement of vaccines, major roads and railway projects. He said, "We need to pursue non-debt options to finance these projects. Basic Assumptions and Parameters: Oil Price Benchmark of 77.96 US Dollars per barrel; Daily oil production estimate of 1.78 million barrels per day (inclusive of Condensates of 300,000 to 400,000 barrels per day); Exchange rate of 750 Naira per US Dollar; and Projected GDP growth rate of 3.75 percent and 17.16 percent inflation rate."
On 2024 Revenue Estimates, the Senate Leader said, "Based on these fiscal assumptions and parameters, total federally-collectible revenue is estimated at 16.87 trillion Naira in 2024; Total federally distributable revenue is estimated at 11.09 trillion Naira in 2024, while total revenue available to fund the 2024 Federal Budget is estimated at 9.73 trillion Naira.
This includes the revenues of 63 Government-Owned Enterprises; and Oil revenue is projected at 1.92 trillion Naira, Non-oil taxes are estimated at 2.43 trillion Naira, FGN Independent revenues are projected to be 2.21 trillion Naira. Other revenues total 762 billion Naira, while the retained revenues of the GOEs amount to N2.42 trillion Naira.
"A total expenditure of 27.5 trillion Naira is proposed for the Federal Government in 2024. Proposed 27.5 trillion Naira 2024 expenditure comprises: Statutory Transfers of N744.11 billion;
Non-debt Recurrent Costs 10.26 trillion naira; Personnel Costs of N4.99 trillion; Pensions, Gratuities and Retirees' Benefits of N854.8 billion; - Overheads of N1.11 trillion; Capital-Expenditure of N8.7 trillion, including the capital component of Statutory Transfers; Debt Service of 8.25 trillion naira; and sinking Fund of N243.73 billion to retire certain maturing bonds.
"From the above scenario we can see that Recurrent Expenditure is still too high constituting over 43% of the total budget outlay. It contains Personnel costs, Pensions, Benefits and Overheads. These are expenses that are necessary for stabilizing the governments and the polity.
"It is expected that the total fiscal operations of the Federal Government to result in a deficit of 9.8 trillion Naira. This represents 3.88 percent of estimated GDP, above the 3 percent threshold set by the Fiscal Responsibility Act, 2007. Countries around the world have of necessity over-shoot their fiscal thresholds for the economies to survive and thrive.
"There is the need to exceed this threshold considering this administration collective desire to continue tackling the existential security challenges facing our country. It is important to point out that issues of revenue shortfall and meeting unexpected emergencies can only be tackled either by:Borrowing; or Cutting expenditure, shrinking the economy and government and social services, rationalization, job cuts, etc.
"While the first option will pile up debts which must be paid in the future, it allows you to survive the present and stabilize to enable you to device the means of paying the debt. If invested properly debt could provide one with the platform and capacity to pay the debt itself and catapult one into a brighter future; and The second option which is more dangerous is to shrink the economy and risk political suicide and economic turbulence by sacking workers, obliterating opportunities, cutting social service and starving our communities to death and oblivion.
"To finance the deficit therefore is to engage in new borrowings totaling 7.83 trillion Naira, 294.49 billion Naira from Privatization Proceeds and 1.06 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/ programmes.
"Although there is a growing concern over continued borrowing but this administration resort to it to finance fiscal gaps. But let me state here that the debt level of the Federal Government is still within sustainable limits. Very importantly, these loans are used to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people. We focused on; the completion of major road and rail projects; the effective implementation of Power sector projects; the provision of potable water; construction of irrigation infrastructure and dams across the country; and Critical health projects such as the strengthening of national emergency medical services and ambulance system, procurement of vaccines, polio eradication and upgrading Primary Health Care Centers across the six geopolitical zones.
"The proposed expenditure is N8.7 trillion (including Special Intervention). On the Capital side, a number of roads, railways, airports, housing and a number of infrastructure projects are considered in this Renewed Hopebudget."