Budget Support: FG Wants Its N614Bn From States, Gives Update On Economy

Federal Government needs money, as a result it has set up a committee to to help recover it’s funds amounting to N614 billion given to 35 states to help shore up their capacity to resolve their cash crunch.

Minister of Finance, Budget and National planning, Zainab Ahmed who briefed State House correspondents at the end of the National Economic Council (NEC) meeting chaired by Vice President Yemi Osinbajo, said she presented another update on the status of the budget support faculty.

Lagos State did not ask for the fund. Since 35 states benefitted, she said that each state will pay back equivalent of N17.5 billion.

“Council agreed to constitute a committee of the Nigerian Governors Forum to meet with the Ministry of Finance and the Central Bank of Nigeria to finalize modalities for repayment.” she stated

She also assured that the 2020 budget will get to the National Assembly by the last week of September, 2019.

According to her, Council was briefed on preparations for the 2020-2022 Medium Term Expenditure Framework and the revenue generation challenges being faced by the government.

She disclosed that the stabilization fund account and natural resources fund balances as at 20th August 2019 is $95,329,245.24

On the stabilization fund account, she said “The balance as at 20th August 2019 is  N21, 729,976,810.6

For the natural resources development fund, she said “The balance as at 20th August 2019 is N95,896,886,829.69”

Also on the Excess Crude Account and other special accounts of the Federation, she said that the Committee requested for extension of time to finalise and present its report next meeting.

Noting that her Ministry made presentation on the Medium Term Expenditure Framework and Medium Term Strategy paper to the Council, she said that the purpose of the presentation was to get inputs and recommendation from the Council for further presentation to Federal Executive Council (FEC) for approval and implementation. 

She underscored the importance of the presentation as follows: “Nigeria macroeconomic environment has stabilized in recovering gradually.

“There has been eight (8) successive month of economic growth since emerging from recession.

“The Economic Recovery and Growth Plan (ERGP), remains the basis for the Medium Term fiscal strategy.”

She also highlighted successes recorded as follows: “Macro-economic stability has been achieved with growth in end Q3 2019 at 3.01%. Economy increased in Real GDP from 1.89% in Q2018 to 2.01% in 2019.

“There has been significant growth in non-oil sector. Contribution of the non-oil secgtor to GDP has increased 90.4% in Q1 2018 to 90.9% in Q1 2019.

“Unemployment rate at 20.1% at Q3 2018.

“Need for more diversification to boost inclusive growth.”

According to her, the President is strongly committed to employment generation in the second term of his administration.

She also said that considerable success has been recorded in containing insurgency is parts of the North East, with economic activities recovering, noting that recurring conflicts between farmers and herdsmen, as well as incidences of flooding has affected agricultural products.

She added “Breaches in NNPC pipelines still regular, partly accounting for low oil production volume in first half of the year.

“Inflation has continually decline since 2017 from 18.72% to 11.08% in July 2019.”

She disclosed that the draft 2020 – 2022 Medium Term Fiscal framework indicates that Nigeria faces significant medium term fiscal challenges especially with respect to revenue generation.

“Therefore there is need to improve revenue collections and expenditure management. Need to take bold decision and urgent action to achieve fiscal sustainability and macro-fiscal objectives.” She stated

On the $9 billion judgement debt against Nigeria, she said that the Minister of Justice, Abubakar Malami, has assured that the Federal Government will appeal the judgement.

Edo State Governor, Godwin Obaseki, said that the Minister of Health, and other health officials gave update to the Council on polio eradication in the Country.

He said “He noted that 21st August, 2019 marks exactly 3 years milestone without a case of Wild Polio Virus (WPV) in Nigeria.  This states our progress towards certification.  African region will commence a 6 months period of receiving the criteria for certification.

“There is need to improve the quality of the campaigns in order to stop the outbreak of the CVDPV2

“Need for increased routine immunization.”

He said that the Minister however identified some challenges as follows: “Lack of release of counterpart funds by the Local Government Chairman as one of the key problems in achieving successful routine immunization.

“Insecurity concerns in parts of the of country.”

The Minister, he said, requested Council to: “Convey the meeting of the Presidential Task Force on Immunization. Sustainability of political oversight by the political class. Establishment and re-activation of State Task Force on immunizations. Quarterly release of appropriated funds for Routine Immunization and other Primary Health Care Activities. Timely release of funds by the States and LGAs for immunization campaigns.”

He said Dr. Kayode Fayemi, Governor of Ekiti State and Chairman, Nigeria Governors Forum gave update on NEC Ad-Hoc Committee on Security and policing.

“He noted that the Inspector General of Policy (IGP) has initiated the commencement of Community Policing and there is a plan to consider using N-Power beneficiaries and Youth Corpers as Police Officers in their Local Government Areas.

He said that full report will be given in the next NEC meeting.

He said that the Council also received a presentation from the Chief Executive Officer, the Nigerian Stock Exchange- Mr. Oscar Onyema, titled: “Financing the Next Level” alternative and innovative long term financing for Nigeria’s critical National Infrastructure.

He added “The CEO, Nigerian Stock Exchange noted that the Nigeria Stock Exchange has actively supported Nigeria’s growth since 1960.

“That Capital market is highly correlated and therefore crucial to the country’s economic development.

“The NSE is today one of Africa’s foremost Exchanges servicing the No 1, Economy in Africa with a Market Capitalization of N25.7trillion ($70.7bn)

“Over the last 5 years, N10.3tn in long term capital has been raised by federal and state governments in the form of Government Bonds.

“The Capital market offers innovative financing solutions for Nigeria’s $100bn infrastructural challenge.

“That solving Nigerian’s infrastructure challenges remain the panacea for actualizing the country’s full economic potential.

“There is an untapped state investment opportunities in $1 trillion global privatization market and N9 trillion local pension sector.

“Unlocking the value will require:

Public –Private partnerships (PPPs) and Special Purpose Vehicles (SPVs). Infrastructure, Sukuk and Green Bonds; Real Estate Investment Trust (REITs);

“Refinancing bank debt through capital market instruments. Partnerships with Development Finance Institutions (DFIs) – onshore/Local currency bonds.

Council Decision.”

He said that the Council welcomed the presentation and noted the proposal.

Nasarawa State Governor, Abdullahi Sule, said that Jigawa State Governor made presentation on export promotion.

He said “The report is sequel to the Zero Oil Plan, envisioned in the Economic Recovery and Growth Plan (ERGP) which is developed by the Nigeria Export Promotion Council (NEPC).  The plan details the Non-Oil export sector as the last line of defense for the Nigeria Economy.

“The implementation of the plan is expected to yield results in 3 key areas: “Add an extra UDS150 billion (minimum) to Nigeria’s foreign reserves cumulatively from non- oil exports over the next 10 years;

“Create 500, 000 jobs annually, lift 20 million Nigerians out of poverty, contributing towards SDG-‘’ No Poverty’’.

He said the Governor reported that the committee has recorded the following achievements: “Designed an implementation Plan for Project implementation

“Harmonized Export Development Plan Submitted by states

“Identified Projects based on the Implementation Plan and States Submissions.

“Set- up Templates and Schematics for Domestic Export Warehouse and Anchor Programme for Exporters.

“Provide processing equipment and conducted Capacity Building Programme on Strategic Products in the Zero Oil Plan in Kaduna, Benue, Ondo, Edo and Imo States.  The products are Palm oil, Soya Beans and Ginger.

“Identify Companies for the Domestic Export Warehouse and Aggregation Centre for exportable products.”

He further revealed that the other achievements of the Zero Oil Plan to date incudes: “Non- oil exports (excluding natural gas) have risen from U$1.17 billion in 2016 to US$3.16 billion in 2018 meaning that Strategic sectors identified in the Zero Oil Plan have seen growth. For instance, cocoa exports have risen by $79.4 million since 2017, while sesame exports have also increased by $153 million since 2016 – an increase of more than 100% (source: International Trade Centre).

The plan, he said has identified the creation of five million jobs to date directly supported by no-oil exports, with efforts underway to increase this by 500,000 new jobs annually in line with SDG 8 – “Decent work and Economic Growth”

“A state Export Development Fund has also been created through N50bn debenture to be disbursed by NEXIM, in which the Central Bank of Nigeria (CBN) has invested. The Fund offers long –term loan at single digit interest rate to qualifying export-oriented projects under the State Export development Programme and the Anchor exporter scheme.”

He said that the Council agreed to

include the Minister of Foreign Affairs as a member of the Committee.

“States can freely change their focal persons in the Committee.

“Council to follow-up on obligation of the Nigeria Maritime Administration and Agency NIMASA regarding the financing of Nigerian Export Promotion Council (NEPC).”

At the briefing, he explained that his deputy Governor was not attacked as reported in the media.

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