The Minister of Budget and Economic Planning, Senator Atiku Bagudu, has provided insight into the proposed 2024 Appropriation Bill, which will be partly funded with the N50 billion Presidential Infrastructure Development Fund (PIDF), currently domiciled in the National Sovereign Wealth Investment Authority (NSWIA).
He explained that the N50 billion in the PIDF would not be adequate to fund the Renewed Hope Transformational Projects; hence, the Federal Government approached the World Bank for a $2.5 billion loan.
He further disclosed that the World Bank management would meet soon to make a decision on its approval.
The minister gave this insight while briefing the Joint Senate and House of Representatives Committee on National Planning and Economic Affairs over the proposed Supplementary Appropriation Bill.
President Bola Tinubu had earlier informed the joint session of the federal parliament that he would soon send the proposed money bill to the federal lawmakers for approval.
The minister further explained that the entire Supplementary Budget, still under preparation, would be spent on four identified transformational projects.
He listed the projects to include the Lagos – Calabar Coastal Road; the proposed Sokoto – Badagri Road; the completion of all ongoing railway projects, for which the Federal Government had yet to provide counterpart funding.
Atiku Bagudu also said the proposed money Bill would fund the rehabilitation and expansion of dams and irrigation schemes to support increased production within the economy.
Apart from this, he said the supplementary budget would provide more money to support CNG, and LNG projects to provide for more energy competitiveness. He cited a study done by the Federal Ministry of Science, Technology, and Innovation showing that CNG vehicles are cheaper to maintain than petrol-powered ones.
The minister added that the trans-Sahara highway, inherited by the current administration, 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-Badagri 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 to support increased production within the economy. Last but not least, more money to support CNG, LNG.”
“The three roads, dams and irrigation, and railways are what Mr. President designated as the infrastructure, renewed health infrastructure priority items. “So that’s what he directed that the ministry prepare for the 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 for supplementary appropriation.”
The minister also said the current agitation by organised labour minimum wage agitation might also 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 the 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 MDAs had not started projects.
He also said the Federal Government has mandated the Finance Ministry to take over payment of some major contractors.
He 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 categories 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 briefs on the 2024 budget.”
The Chairman of the Senate Committee, Senator Yahaha Abdullahi, suggested the amendment to the 2024 budget instead of a fresh appropriation because of the huge cost of processing it.
He, however, said the executive arm of government is at liberty to determine how it wants to get its appropriation bill approved by parliament.
