Members of the joint National Assembly Committees on Finance, on Monday, faulted the decision by the President Bola Tinubu-led federal government to borrow foreign loans despite the fact that the various revenue generating agencies had surpassed their targets in the 2024 fiscal year.
Members of the Senator Sani Musa and Abiodun Faleke-led joint committees expressed their disavowal while scrutinising the 2025-2027 Medium Term Expenditure and Fiscal Strategy Paper (MTEF-FSP)
They wondered why the federal government should ask for a $2.2bn loan this year when it claimed that it had gained over $20bn as a result of the oil subsidy removal.
Senator Adamu Aliero (PDP Kebbi Central), asked: “What is the federal government doing with excess revenues generated by the various agencies in view of its unending request for foreign loan approval?”
But responding, the Chairman of the Federal Inland Revenue Service (FIRS), Zacchaeus Adedeji, said loans being requested for by the executive were already part of the 2024 budget.
He also said the National Assembly had approved the loans earlier, when they considered and passed the 2024 Appropriation Bill.
“The fact that we meet revenue targets, does not mean we should not go and borrow and the reason is simple. The budget we have has both borrowing component and internally generated revenue component.
“So it is total package, our borrowing target is there in the budget as approved by the National Assembly,” he said.
Advancing a similar reason, the Minister of Budget and Economic Planning , Senator Atiku Bagudu, said the federal lawmakers should not forget that the borrowing plans contained in the N35.5 trillion 2024 budget were primarily meant to fund the deficit, which is N9.7trillion.
He said, despite revenue targets surpassed by some of the revenue generating agencies, the government still needed to borrow for proper funding of the budget, particularly in the area of deficit and productivity for the poorest and most vulnerable .
He said, “We have a long term development perspective plan agenda 2050 aiming at GDP per capital of $33,000.”
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, also explained to the lawmakers that borrowing was still needed for proper funding of the budget despite increased revenues made by some agencies.
The revenue generating agencies in their separate presentations before the joint committees on the 2024 budget performance and revenue projections for N49.7 trillion 2025 budget, made excess revenue target submissions in the 2024 fiscal year.
First to make the submission was the Comptroller-General of Nigeria Customs Service (NCS), Bashir Adeniyi, who said by 30th of September this year, Customs had raked in N5.352 trillion revenue, which was above N5.09 trillion targeted for the entire 2024 fiscal year.
He added that N6.3 trillion was targeted as projected revenue for 2025, a 10% increase of which would be the revenue target for 2026 and additional 10% increase for 2027 fiscal year.
The Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company (NNPCL), Mr Mele Kyari, in his presentation, said the company exceeded the N12.3 trillion revenue projected for 2024 by already raking in N13.1 trillion.
“For the 2025 fiscal year, N23.7 trillion is projected by NNPCL to be remitted into the federation account,” he said.
The Chairman of FIRS, Adedeji further informed the joint committees that FIRS had surpassed targeted revenues across the various tax components.
He said on the Company Income Tax, N4 trillion was targeted but that N5.7 trillion had been realised now.
“On Education tax, while N70 billion was targeted, a total of N1.5 trillion has been realised.
“All in all, out of N19.4 trillion targeted for 2024 fiscal year, N18.5trillion was realised as at the end of September, which clearly shows that the target will be far exceeded by the end of the year,” he said.
However, the Immigration Service of Nigeria, ran into troubled waters at the interactive session over lopsided Private Public Partnership arrangements on Passport production, which gave consultancy firm 70% of proceeds and government 30%.
The Chairman of the Senate Committee, Senator Sani Musa, ordered Immigration to present all the documents on the unacceptable PPP arrangement to the committee before the end of the week.
“The so-called PPP arrangement must be reviewed or cancelled because Nigeria and Nigerians are seriously being short changed,” he said
Edun, however, said Tinubu had stopped the era of sudden wealth by floating the naira, and removing the subsidy on petroleum products.
“Just today, the National Bureau of Statistics, by the Statistician General, announced that GDP growth in the third quarter was 3.46, let us say, for the sake of round numbers, 3.5%.
“That means that the GDP per capital is increasing, it’s improving. The economy is moving in the right direction.
“Inflation is too high and that is why interventions are being made particularly for the most vulnerable.
“Let me just summarise the change by saying that in Nigeria, for the first time in four decades, we have market prices of the petroleum products being determined by market forces.
“This is because the local refinery is not only producing not just PMS but also diesel, or jet fuel. Well, it’s producing raw materials for industry. It’s producing raw materials for agriculture
“In addition, we have market pricing of foreign exchange. And of course, the two are related.
“For the first time in 40 years, no Nigerian can wake up and think that his way to fortune and the quickest path he can take to getting rich is by getting an allocation of foreign exchange from the Central Bank of Nigeria (CBN).
“Likewise, no Nigerian can wake up and feel that his quickest path to riches is to look for a subsidised allocation from the Nigerian National Petroleum Corporation Limited (NNPCL) and make money.
“So by the time you have market pricing of petroleum products, market pricing of foreign exchange, it will send all the right signals and then as well as we have to be financially disciplined to pay our debts, to pay our wages.
“We have the basis of an economy that can grow, a society that can develop, and people can be proud of.”
The Director General of the Budget Office, Taminu Yakubu, expressed a better fiscal year in 2025
He said, “We certainly expect a substantial reduction in the rate of inflation next year. And the reason is obvious. We have been observing trends in the economy. We’re expecting a robust bumper harvest this year, and this normally accounts for 40% of our inflation.
“We are also reducing importation of PMS and diesel, and at the same time, for the first time, exporting some of these refined products on account of the emergence of the Dangote Refinery and as you know, the importation fuels inflation or escalates the exchange rate. The other source of inflation has been that of cost of drugs.
“The federal government has finalised an arrangement for massive unprecedented domestic production and importation of drugs that will be distributed through public healthcare centers all over the country in 2025.
“On interest rates, we need to remember that government has deregulated subsidies, not only on interest but also on foreign exchange.
“We believe that because the subsidies represent savings, what used to go into private pockets will now accrue to the public revenue stream.
“The federal government, the state government, the local government councils will have significantly more revenue than they ever have.
“We expect that this would, going forward, moderate the amount of borrowing by the public sector and I think this will go a long way to stabilise the macroeconomics.
“But there is nothing that we will do as an administration to bring down the rate of interest, because that has gone with the reform winds.”
Meanwhile, the NNPCL failed to tell Nigerians the exact date its refineries would start working.
The lawmakers however expressed delight that the federal government was carrying out a forensic audit on the claims by the NNPCL over its claims that the federal government owes it N8trn debt.
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