The House of Representatives on Wednesday kicked against proposed N2.7 trillion waivers and exemptions to be granted to various organisations in the 2024 fiscal year as proposed by the Budget Office.
Chairman, House Committee on Finance, Hon. James Abiodun Faleke expressed the concern during the interactive session with officials of Ministries, Departments and Agencies (MDAs) on the legislative scrutiny of the 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), transmitted by President Bola Ahmed Tinubu for Legislative approval.
Hon. Faleke explained that the interface with MDAs and stakeholders on Government finances was to ensure the passage of a realistic MTEF/FSP before the presentation of the 2024 annual budget.
While assuring that the Committee will provide home grown solutions to the country’s financial problems, Hon. Faleke expressed displeasure over the laxity of MDAs on the $11 billion P&ID contract scam, and $30 million being paid on monthly basis by Nigeria Bulk Electricity Trading Plc (NBET) to Azura Power.
He said: “The MTEF is the very basis of the annual budget which is itself the backbone of the implementation of the Federal Government’s plans and policies.
“As the representatives of the Nigerian people, a position which we occupy in trust for them, we owe Nigerians the onerous responsibility of delivering the democratic dividends to the doorsteps of our constituents in line with our campaign promises. We can only achieve them through the powers bestowed on us by the Constitution of the Federal Republic of Nigeria (Amended) i.e. oversight, representation and lawmaking. That is the gumption of the oath we took during inauguration of the 10th House of Representatives.
“These sessions are expected to be held at least quarterly so that projections agreed upon here are monitored and oversight reports laid before the House and Nigerians on the progress of the budget. It is imperative to note the importance of Revenue on the outcomes of the National budget. The Committee has observed various factors that have caused shortfalls in expected revenues as well as charges to Government revenues from commitments by agencies of Government.”
Hon. Faleke also warned that the “Committee will not accept such laxity on the part of MDAs in not negotiating the best for the country. The $11 billion P&ID fiasco is still fresh in our minds where the whole country was almost held hostage to a fraudulent agreement.
Another agreement signed on behalf of the Government by NBET and Azura Power has committed payments of over $30 million per month. This agreement is dollar denominated and applicable even now in times of acute foreign exchange shortages.
“The Committee is committed to ensure value for money is attained in all Government agreements. Our revenues have been reducing over the years due to decreases in oil revenues which used to be our major earner. The Committee has vowed to get to bottom of these oil shortfalls.
“The NNPC, our oil asset managers, give oil theft as the main cause; however how are our marginal field operators performing vis a vis the various oil fields potentials? How much deductions at source from oil productions are occurring due to NNPC signed agreements over the years that are now impacting on our revenues?
“Even in the light of these revenue shortfalls, the Federal Government is still losing revenue from various waivers and exemptions granted various organisations. In 2024, the Budget Office has estimated a loss in revenue of over N2.7 trillion.
“Is the Government getting the alternative benefits of these revenue losses? Is the Public getting value for money for these revenues foregone or is it just beneficial to a small set of well-connected people?
“Independent revenue of Government is still the largest individual sub-head of the Federal Government and the Committee expects these revenues accrued from operations of Government Owned Agencies to surpass the estimates submitted by the Budget office.”
Hon. Faleke alleged that “these shortfalls in Government revenue has caused the Government to operate a deficit budget over the years leading to both domestic and foreign borrowing to implement the expenditures as planned.
“This continuous borrowing due to these budget deficits has ballooned our debt servicing payments to the sad situation where last year we spent over 95% of our revenues on debt servicing.”
According to him, the Committee has over the past few years introduced in a most innovative manner, the revenue monitoring exercise by provided platforms for most revenue generating agencies to shore up the collective revenue profile of our dear country. We hope to do better this time around.
The World economy is tight. Developed Countries are raising interest rates as they try to fight inflation in their own economies.
“This implies that for Investments to come to Nigeria they will expect a higher rate of return and hence increase the cost of borrowing. Revenues under our control must be increased as this is the surest way out of the current economic difficulties the nation has found herself,” he assured.
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