The federal government intends to borrow $29.96billion from external sources under the 2016-2018 external borrowing plan to fund the execution of critical projects in 36 states and the Federal Capital Territory(FCT) with emphasis on infrastructure, agriculture, employment generation and poverty reduction.
Buhari writes NASS, seeks o borrow $29.96bn external loan from 2016-18
The administration’s borrowing rolling plan was contained in a letter sent to the National Assembly by President Muhammadu Buhari on October 20 which was read by Speaker Yakubu Dogara during plenary on Tuesday.
Buhari informed the National Assembly that while he is seeking approval of the legislature to borrow the said amount, adding that the projects and programmed to be executed with the borrowed funds cut across all sectors and were selected based on positive technical economic evaluations as well as the contribution they would make to the socio-economic development of the country.
He said that the $29.96billion to be borrowed is made up of proposed projects and programmers loan of $11.274billion, special national infrastructure projects ($10.686billion), Euro bonds of $4.5billion and federal government budget support of $3.5billion.
“Considering the huge infrastructure deficit currently being experienced in the country and the enormous financial resources required for o fill the gap in the face of dwindling resources and the inability of our annual budgetary provisions to bridge the infrastructural deficit, it has become necessary for o resort to prudent external borrowing to bridge the financing gap which will largely be applied to key infrastructural projects namely: power, railway and road projects among others”, the president stated.
He assured that the projects and programmed will be implemented in a financially sustainable manner to ensure that, the country is able to service its external debt as and when due, taking into consideration debt service to revenues.
Furthermore, Buhari drew the attention of the National Assembly to some emergency projects contained in the borrowing plan, especially the recent outbreak of polio in the North East and the urgent need to tackle the epidemic to avert long term damage.
According to him, even though the World Bank has provided $125million for the procurement of polio vaccines and another $450million to assist in the reconstruction and rehabilitation of the North East, the federal government plans to spend a further $575million in the insurgency ravaged region.
In another letter dated October 24, the president also requested the National Assembly to approve the virement of funds appropriated for special intervention (recurrent) and special intervention (capital) to fund some critical recurrent and capital items.
He said the request for virement has arisen due to a number of reasons, including shortfalls in provisions for personnel costs; inadequate provision ab initio for some items like the amnesty programme; continuing requirements to sustain the war against insurgency and depreciation of the naira.
“However, considering the fact that budgeted revenues are running behind target largely due to the renewed violence in the Niger Delta, and there are no supplementary revenue sources, the most viable option for now is the virement of appropriated funds from heads or sub-heads that may not be fully utilized before the end of this fiscal year”, Buhari added.
An analysis of the proposed virement shows that Public Service Wage Adjustment (PSWA) will gulp N71,800billion; contingency N1.2billion, margin for increase in cost N2bilkion, cadet feeding- Police Academy, Wudil, Kano, N932.4million, amnesty programme N35billion, internal operations of the armed forces N5.205billion, Operation Lafiya Dole N13.933billion, NYSC N19.792billion, foreign missions N14.667billion and augmentation of meal subsidy/ direct teaching and laboratory cost of N900million bringing the total to N166.630,886,954billion.
Statutory transfers to Public Complaints Commission is estimated to gulp N1.2billion while the virement in respect of capital expenditure for the Nigerian Air Force is N12.708billion and Capital Supplementation: Presidential Initiative for the North East (PINE) is N1.5billion bringing the total to N14,208,367,476billion.
Lastly, the president requested that N300million be vired from the budget of the ministry of power, works and housing to fund the construction of 132KVA sub-station of fallen transmission towers, replacement of glass insulators at Gwaram, Jigawa state.
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