President Muhammadu Buhari has sent a supplementary appropriation bill for
the 2015 fiscal year to the Senate for approval.
The president, in a letter conveying his request, which was read during
plenary, by the Senate President, Bukola Saraki, asked the Senate to grant
his request to borrow the sum of N2.10 trillion to finance the budget.
He explained that the N882 billion loan earlier proposed by the past
government to finance the budget had to be raised to N2.10 trillion, due
to emerging realities in the country.
According to the president the source of the loan would be from both local
and foreign.
Also, Buhari on Wednesday laid before the National Assembly a
supplementary budget of N465.6bn for 2015.
Out of the figure, N460bn was allocated to recurrent expenditure, with
subsidy on petrol taking N413.3bn of the N460bn.
Also included in the recurrent component was N10.6bn for the payment of
outstanding severance gratuity and allowances to members of the National
Assembly and their aides.
Others captured under the recurrent component were Nigerian Army (N17bn);
Nigerian Air force (N8bn); and another N4bn set aside for “Nigerian Army
outstanding balance from 2015 Second Quarter.”
The balance of N5.6bn was earmarked for capital expenditure, with the bulk
of N5bn to be spent on victims’ support funds.
At the House of Representatives, the Speaker, Mr. Yakubu Dogara, read the
President’s letter to lawmakers.
The budget immediately passed first reading and was scheduled for second
reading on Thursday.
“Due to the urgency of this matter, the second reading of the bill will be
done on Thursday.
“Copies should be circulated to members so that they will be prepared for
the debate”, Dogara stated.
The President had recalled that the Federal Government originally budgeted
N4.485trillion as aggregate expenditure for 2015.
However, he acknowledged that the budget faced challenges of
implementation, owing largely to revenue shortfalls.
He explained that the challenges and the increasing security threats in
the country had made it necessary for the government to opt for
supplementary funding.
Part of the letter reads, “The implementation of the 2015 budget has been
fraught with significant revenue shortfalls due to continuous decline in
the oil price, oil production shortfall and non-full realisation of
non-oil revenue.
“You may wish to further note that owing to the need to sustain the
current progress in addressing the security challenges and other important
obligations of the government, emergency expenditure items requiring
urgent funding is projected at N465.6bn.”
The 2015 budget had been pegged at a crude oil benchmark of $53 per barrel.
However, global market prices have been below $50 per barrel for several
months running.
The President added that the original 2015 budget had a deficit component
of N1.04tn, financed mainly through domestic borrowing of N502.1bn and a
foreign borrowing profile of N380bn.
He said the two borrowing windows put the country’s total borrowing
initially at N882.12bn.
But, with the supplementary budget, Buhari told the National Assembly that
the budget deficit had increased to N2.103tn, while borrowing would jump
to N1.601tn.
The letter further reads, “Accordingly, I deem it necessary to formally
request the concurrence of the National Assembly to please consider and
approve an upward review of the fiscal deficit from 1.09 per cent of GDP
to 2.19 per cent of GDP;
“An upward revision of the new borrowing from N882.1bn to N2.103tn and a
new funding requirement to address security challenges and other important
obligations in the sum of N465.6bn.”
Debate on the proposed is expected to start today at the House.