The Senate yesterday queried the Ministries, Departments and agencies (MDAs) over poor revenue projections.
The theatre came as the upper chamber grilled the Minister of Finance/Co-ordinating Minister on the Economy, Wale Edun, when he appeared before it on a paper on expenditure and fiscal strategy by the joint committee of the National Assembly led by Senator Sani Musa.
At the session, the minister said the country cannot rely on borrowing to fund the 2024 national budget, in response to questions on poor revenue projections by the MDAs.
According to Edun, the nation must make necessary sacrifices to generate adequate revenues to reduce its current high budget deficits.
Briefing alongside the Executive Chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji and the Director-General of the Debt Management Office (DMO), Patience Oniha, the committee which was scrutinising the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper led by the senator, before the lawmakers, called for a closed session.
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Edun maintained that the best way Nigeria could fund its annual budgets was to spend more money on infrastructure that could generate revenues.
Musa, who is also the Chairman, Senate Committee on Finance, expressed fears that the revenue projections of the MDAS of the Federal Government that had so far appeared before the MTEF-FSP panel were a far cry from what the government was proposing as income in the 2024 fiscal year.
In his view, going for external interventions would definitely not be an option because it would further push the country to further deficit financing.
Musa said, “Currently, there are lots of leakages in the use of government resources. A lot of funds being generated as revenue by most MDAs are not being remitted as at when due. Some even remit funds a year after they collected the money.
The chairman noted that the office of the Accountant-General of the Federation should look properly in that direction as the current practice of delaying the remittances of revenues by the MDAs had created room for the misappropriation of those funds.
He said, “After meeting with the Nigerian Customs Service officials yesterday, we realise that there were lots of shortfalls they are experiencing as a result of incidences of waivers.
“We want to know who is issuing those waivers. Is it the FIRS or the Ministry of Finance?
“We are also interested in knowing the details of the Customs modernisation project, known as e-Customs.
“The Senate Committee on Finance is interested in knowing the type of agreement that was signed on behalf of the Federal Government of Nigeria.”
Musa queried, “What is the value of the e-customs agreement? How much is Nigeria expecting?
“We are tired of judgment debts all over the place. We need to know the plans on the ground to collect excise duties and other tariffs so that we won’t run a deficit again next year.”
He also said that advanced countries have increased their interest rates because they wanted to bring down the inflation rate to stabilise their economy.
The minister added that accessing foreign loans would, therefore, be very expensive for a developing country to cope with.
“Clearly the environment that we have now, internationally as well as nationally, we are in no position to rely on borrowing.
“We have an existing borrowing profile. Our direction of tariff is to reduce the quantum of borrowing or intercepting deficit financing in the 2024 budget,” Edun said.
He also stated, “Simply put, internationally, there is a focus among rich countries on bringing down the inflation rate to stabilise the economies and give them the opportunity for investment growth.
“They are in the process, sacrificing that immediate goal for compacting their economies, or at least contracting the money supplies and pushing up the interest rates, and of course, high interest rates and investments don’t go together.
“What is left for us to access those funds are expensive so it is the last thing that we must rely on.
“As we know we have all the figures and debt servicing and cushioning 98 per cent of government revenue.
The minister’s words: “The last thing you can think of is to pile up more debts. The government needs to not just maintain its activity, it needs to spend more.
“If you look at government spending, if you look at the budget as a percentage of GDP, ours is one of the lowest, being 10 per cent. Even Ghana is at 25 per cent, rich ones, they are 50 per cent.
“The very rich countries have to be most advanced in terms of social safety nets, and their social security system at 70 per cent of the GDP. Government spending definitely will lead to an increase in revenues.”
Edun added that the number one source of revenue, especially in the short term, and even in the medium term, is all revenue.
