Ten months into the 2016 financial year, the Federal Government of Nigeria has already reached its N900billion planned local borrowing limit for 2016. Now it is looking to external sources to fund the remaining N900 billion of its N1.8 trillion borrowing plan for the 2016 budget, Finance Minister, Kemi Adeosun has said.
Disclosing this at an interactive session with the Danjuma Goje-led Senate Committee on Appropriations on Thursday, Adeosun assured that government is exploring all means available to it ramp up dwindling revenues including recovery of stolen public funds. She revealed that an agreement has been reached with the United States to repatriate $300million Abacha loot to the Federal Government.
“All the local borrowing has been undertaken in the domestic market and we have been utilising that money,” the minister stated.
The N6.06trilion 2016 budget, which has a deficit of N2.2trilion, consists of N1.84 trillion borrowing plan.
Describing loans from the international markets as favourable due to low interest rates, she emphasised that the borrowings are for capital projects. “We are expecting that those projects will help us increase our revenues to enable us to pay back. We are being very prudent with our debt strategy”, she said.
She disclosed that the Federal Inland Revenue Service (FIRS) has so far captured 700,000 new companies under tax net in a bid to boost revenues and reduce the dependence on borrowing.
“The FIRS has worked very hard. We have over 700,000 new companies in the tax net. We believe this forms a very good basis to move forward. Right now, we are not seeing the numbers, but we believe that revenue collection is a function of data. And as far as they are getting more and more companies into the net, as the economy improves, our tax revenues will improve and we will be less dependent on oil, which is one of our stated objectives”, Adeosun told the Committee.
The Minister also expressed concern over the indiscriminate withdrawals by ministries, departments and agencies from the Treasury Single Account (TSA).
She hinted that the government is therefore developing a template on maximum withdrawals by MDAs to checkmate the trend.
“There have been inflation of expenses by agencies just to make sure that everything that comes in goes out. The Accountant General of the Federation is now working with the Fiscal Responsibility Commission and we will be coming back to you (Senate). We are developing a new template of what is an allowable expense for an agency because at the moment, there is no law. So, we have seen huge travel expenses, foreign medical expenses and others. And at the end of the year, there is no operating surplus. And if we continue this way, there will never be any operating surplus.
“What we are proposing is a new circular letter which the Accountant General will issue within next week outlining what is any allowable expense. And once we do that, we will be coming back to the Senate so that at committee stage when you are approving their budget, you will be able to highlight these types of expenses”.
Also speaking at the session, Minister of Budget and National Planning Udoma Udoma said government is working at reducing the challenges of militancy, with a view to meeting the 2.2million barrels oil production per day.
The government, he said, has released N2.4trillion so far from the 2016 budget as of August 2016.
