2024 supplementary budget: Nigerian FG seeks $2.5bln World Bank loan

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The Federal Government will seek a a $2.5 billion World Bank facility as a funding window for the 2024 supplementary budget.

The money will augment the N50 billion Presidential Infrastructure Development Fund (PIDF) domiciled in the National Sovereign Wealth Investment Authority (NSWIA), which the government has also earmarked for the budget.

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The Minister of Budget and Economic Planning, Sen. Atiku Bagudu, stated this in Abuja on Tuesday when he briefed the Joint Senate and House of Representatives Committees on National Planning and Economic Affairs.

Bagudu told the lawmakers that the $2.5bn was meant to augment the N50bn, which he said was not enough to execute the Renewed Hope Transformational Projects of the administration of President Bola Tinubu.

Recall that on May 29, President Tinubu had hinted the National Assembly of his plan to forward a Supplementary Appropriation Bill for the lawmakers to work on it.

According to Bagudu, the budget will be devoted mainly to the transformational projects of the administration, though he added that it might also include a provision for the new national minimum wage.

The minister listed the projects to include the Lagos-Calabar Coastal Road; the proposed Sokoto- Badagri Road; and the completion of all ongoing railway projects, which the government had yet to provide its own counterpart fund.

In addition, Bagudu informed the lawmakers that the budget would provide more money to support CNG, LNG projects targeted at improving energy for transportation and household use.

He added that the Trans-Saharan Highway, which the current administration inherited, would also be funded with the supplementary budget.

Bagudu spoke more, “The supplementary budget that was announced or rather was mentioned, came about when Mr President presented a memo to the Federal Executive Council.

“In the memo, he said that he inherited the Presidential Infrastructure Development Fund, which was domiciled in the National Sovereign Wealth Investment Authority.

“He has also identified transformational projects, including Lagos – Calabar, Coastal Road; proposed Sokoto-Badagri Road; completion of all ongoing railway projects, which we have not provided counterpart funding.

“We also plan to fund the rehabilitation and expansion of dams and irrigation schemes in order to support increased production within the economy. Last but not the least, more money to support CNG, LNG.

“The three roads, dams and irrigation, and railways, is what Mr. President designated as the infrastructure, renewed health infrastructure priority items.

“So that’s what he directed that the ministry prepare for appropriation supplementary appropriation bill.

“We have not finished work on the bill, we have not submitted the supplementary appropriation draft to the Federal Executive Council yet.

“So many people have approached the ministry and indeed leadership of the National Assembly as well as many members asking about the renewed hope the supplementary appropriation.”

Commenting on the new wage demand by the organised labour and the government’ plans, said the new pay demand might be covered by the budget.

“We are not clear how much revenue we have, given the challenges of the moment.

“Yes, we have done some scenarios given the exchange rate fluctuation and the impact of the budget and even scenarios given the current minimum wage negotiation that is ongoing.

“This is because even at N60,000, even at N62,000, that immediately doubles the minimum wage.

“So it was the forecast that even at the lowest level, it will increase inflation rate and that might affect interest rates which will affect in turn, economic activity, debt surges among others.”

He also spoke on the performance of the main 2024 budget of N28.7trillion, explaining why funds had yet to be released to some MDAs.

Bagudu stated, “Unlike the usual practice where every quarter the ministry of finance sent money to MDAs depending on what the envelope size is. That has been discarded and replaced by the bottom up cash.

“Under our procurement laws, ministries and MDAs are supposed to commence procurement as soon as the budget is passed into law.

“So most MDAs are in that process now. The first quarter capital releases is not high because most MDAs have not yet awarded the contracts and consequently they have not put any request for cash.

“We believe that it will pick up in this second quarter and subsequent quarters. So the budget performance will be difficult as procurement processes are completed by MDAs.

“Equally, as part of an effort for better treasury management, the federal Ministry of Finance have now decided that for some category of contracts, they will be doing the payments.

“So again, that is intended to ensure that financial resources are pooled in one place, rather than sent to various MDAs awaiting processes. So those are the broad brief on the 2024 budget.”

However, the Chairman of the session, Sen. Yahaya Abdullahi, felt that that executive should have proposed amendments to the 2024 budget as against sending in a new one, considering the time it would take to conclude work on the new bill.