President Muhammadu Buhari has asked the Senate to approve a fresh $800m loan from the World Bank.
He said it was to enable his administration to sustain its social investment programme.
Buhari’s letter was read at plenary by the President of the Senate, Ahmad Lawan, on Wednesday.
He explained that the approval of the loan would specifically enable his government to continue with the conditional cash transfer window of the programme.
He said the government would transfer the sum of N5,000 per month to 10.2 million poor and low-income households for six months with a multiplier effect on about 60 million individuals.
He said to guarantee the credibility of the process, digital transfers would be made directly to beneficiaries’ accounts and mobile wallets.
Part of Buhari’s letter read, “It is with pleasure that I forward the above subject to you. Please note that the Federal Executive Council (F EC) approved an additional loan facility to the tune of $800m to be secured from the World Bank, for the National Social Safety Net Programme (NASSP).
“There is the need to request your consideration and approval to ensure early implementation (Copy of FEC Extract attached).
“The Senate may wish to note that the programme is intended to expand coverage of shock-responsive Safety Net support among the poor and vulnerable
Nigerians. This will assist them in coping with the costs of meeting basic needs.
“You may wish to note that, the Federal Government of Nigeria under the conditional cash transfer window of the programme will transfer the sum of N5,000 per month to 10.2 million poor and low-income households for six months with a multiplier effect on about 60 million individuals.
“To guarantee the credibility of the process, digital transfers will be made directly to beneficiaries’ accounts and mobile wallets.
“The NASSP being a social intervention programme will stimulate activities in the informal sector, and improve nutrition, health, education, and human capital development of beneficiary households.
“Given the above, I wish to invite the Senate to kindly approve an additional loan facility to the tune of $800m million to be secured from the World Bank for the National Social Safety Net Programme (NASSP).
“While hoping that these submissions will receive expeditious consideration by the Senate, please accept, Distinguished Senate President, the assurance of my highest regards.”
*Debt profile becoming unsustainable, budget office cries out
But, the Director General of the Budget Office of the Federation, Mr Ben Akabueze, has raised the alarm that the nation’s debt profile was becoming unsustainable.
Akabueze stated this while delivering a lecture titled, “Budget Process and Money Bills,” at the ongoing induction programme organised by the National Assembly Management and the National Institute For Legislative And Democratic Studies for members elected for the 10th National Assembly.
He said, “We now have very limited borrowing space, not because our debt to GDP is high, but because our revenue is too small to sustain the size of our debt. That explains our high debt service ratio.
“Once a country’s debt service ratio exceeds 30 per cent, that country is in trouble and we are pushing towards 100 per cent and that tells you how much trouble we are in.
“We have limited space to borrow. When you take how much you can generate in terms of revenue and what you can reasonably borrow, that establishes the size of the budget. The next thing would be to pay attention to government priority regarding what project gets what.
“You may have heard that we have one of the lowest GDP-to-debt ratios in the world. While the size of the Federal Government budget for 2023 created some excitement, the aggregate budget of all government in the country amount to about N30trn.
“That is less than 15 percent in terms of ratio to Gross Domestic Product. Even on the African continent, the ratio of spending is about 20 per cent.
“South Africa is about 30 percent, Morocco is about 40 per cent, and at 15 per cent, that is too small for our needs. That is why there is fierce competition for the limited resources. That can determine how much we can relatively borrow.”
Akabueze noted that for Nigeria to be able to fix its infrastructural needs of the country, “we need to be spending about $100 bn annually as a country, including private spending on infrastructure.”
He said, “The aggregate budget of the Federal government is only about $30bn and the aggregate of the states and FCT budget don’t even add up to the federal budget. This means that even if we spend everything, we will still be left with a huge infrastructural deficit.”
*Okays N327.34bn new contracts for award
The FEC approved at least N327.34bn worth of contracts for an award.
Under the Aviation ministry, the council approved N3.4bn as a consultancy fee for the construction of a 2nd runway at the Nnamdi Azikiwe International Airport, Abuja.
Speaking on behalf of the ministry, Mallam Shehu said FEC approved N449.9m for the engagement of consultants for the development of the master plan for 17 airports in Nigeria.
They include Murtala Mohammed (Lagos), Nnamdi Azikiwe (Abuja), Mallam Aminu Kano (Kano), Port Harcourt, Owerri, Benin, Enugu, Maiduguri, Yola, Kaduna, Calabar, Ilorin, Sokoto, Ibadan, Jos, Akure, and Katsina.
The presidential spokesman gave details of other approvals including over N100 billion for the Ogoni community of Rivers State, Southern Nigeria.
He added, “Two major contracts were approved for Ogoni. They include contract for a water project that has been awarded under the 2nd phase in Ogoni land, amounting to N22.8bn.
“Approval was also given for the award of contract for the remediation of newly identified hydrocarbon impacted sites along the shoreline of Ogoni land and this is for about N107bn.”
Similarly, he announced that N90bn was approved for the completion of various roads totalling over N125bn just as N10.3bn was approved for the construction of a multi-story office complex of the Federal Inland Revenue Service in Lagos.
Over N33bn was approved for the completion of some major roads in Borno, Adamawa, Kogi, Delta, Ondo, Ogun, and Benue States.
He noted that the council also approved the establishment of the National Institute for Domestic Security at Irogbo-Ilesa, Osun State, which had a budgetary provision of N285m in 2022 and N360m in the 2023 budget.
On his part, the Minister of Transportation, Mu’azu Sambo said the ministry submitted three memoranda to the council which were approved.
According to Sambo, the first of them was in respect of the provision of security equipment for the Nigerian railway stations across the country phase two while the second one was for security equipment including baggage scanners walkthrough metal detectors, X-ray male scanners, liquid explosive detectors, narcotics cam trace bomb detectors, among others. It was awarded to Messrs Advonix Services Nigeria Limited in the sum of N4.3bn with a completion period of 12 months.
The council also approved memoranda presented by the Ministry of Water Resources for the concession for the operation and maintenance of the proposed Gurara II 300MW hydroelectric power project.
It will be financed by China’s EXIM Bank loan along with 15 per cent equity contribution by the contractor and 50 per cent counterpart funding by the federal government.
The 30-year concession is expected to pay back between $800m and $900m.
