The Federal Government has described as worrisome the rise in public expenditure amid dwindling revenue accruals.
The Accountant General of the Federation, Mrs Oluwatoyin Madein stated this on Wednesday at an interactive session on the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper organised by the House of Representatives Committee on Finance.
Mrs Madein however assured the lawmakers that efforts are ongoing “To block revenue leakages and increase revenue generation.”
According to her, “The revenue generation and its collection is dwindling in comparison with the expenditure set against the money collected.
“But currently, a series of efforts are ongoing to shore up revenue, block the leakages and improve on the revenue that is being brought into the federation.
“Inasmuch as the revenue is in this position, the expenditure too has not also been helping matters, especially with the current economic reality where the prices of things are going up regularly.
“The expenditure too is on the rise and definitely the strategies to increase revenue must be worked upon on a continuous basis to ensure that we are having funds to meet the expectations of Nigerians.”
The AGF also pleaded with the Committee to assist her office “With all the plans, strategies, ideas” to support the efforts to increase revenue generation.
Also at the interactive session was the Chief Executive Officer, Ministry of Finance Incorporated, Mr. Armstrong Katang.
Addressing newsmen at the event, Chairman, House Committee on Finance, Abiodun Faleke described the MTEF as the basis of the annual budget “Which is itself the backbone of the implementation of the Federal Government’s plans and policies.”
He also added that as the representatives of the Nigerian people, lawmakers owe them “The onerous responsibility of delivering the democratic dividends to the door steps of our constituents in line with our campaign promises.
He said, “The Committee is committed to ensure that 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 the bottom of these oil shortfalls.
“The NNPCL, 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 to various organizations. In 2024, the Budget Office has estimated a loss in revenue of over N2.7 trillion.
“We can only achieve them through the powers bestowed on us by the Constitution of the Federal Republic of Nigeria (as amended) through oversight, representation and law making. 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.”
Emphasizing the importance of revenue for the execution of government’s programmes, Faleke noted that the Committee “Has observed various factors that have caused shortfalls in expected income and charged the Ministries Departments and Agencies to rise to their responsibilities in the interest of the nation.
He further called on them to be up and doing saying, “The Committee will not accept such laxity on the part of MDAs in not negotiating the best for the Country.
“The $ 11 billion P & I D 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 $30m per month. This agreement is dollar denominated and applicable even now in times of acute foreign exchange shortages.
“The Committee is committed to ensure that value for money is attained in all Government agreements.
The lawmaker representing Ikeja Federal Constituency, Lagos State further lamented the negative impact of poor revenue, stating that the development left the Federal Government with no option but to resort to borrowing.
“This continuous borrowing due to these budget deficits has ballooned our debt servicing payments to the sad situation where last year (2022), we spent over 95 per cent of our revenues on debt servicing,” he added.
The total available amount for the Federal Government’s budget for 2021 and 2022 was N10.51tn according to budget implementation documents from the Budget Office. The total amount spent on recurrent expenditure was N19.37tn, the total amount on capital expenditure was N3.79tn. The total amount spent on the budget in the total years was N24.47tn and the fiscal deficit in the period was N13.95tn.
For 2023, the Federal Government expects its total revenue for the year’s budget to be N8.63tn. Total recurrent expenditure is projected to be N13.30tn, total capital expenditure is meant to be N3.37tn. For the year, the Federal Government expects to spend N17.64tn on its budget. To cover its shortfall, it expects to fund its deficit with N9.01tn. As of the end of the first quarter, it had spent N4.41tn, made N2.16tn, and borrowed N2.20tn.
Nigeria’s foreign debt is expected to rise further to about $51 billion, following President Bola Tinubu’s request to the Senate, seeking approval to borrow additional $7.8 billion and €100million, as part of his 2022-2024 borrowing plan.
Nigeria’s foreign debt as at June 2023, was put at $43.2 billion, while domestic debt is put at N54.1 trillion, bringing public debt to N113.4 trillion.
With the presidential request for new borrowing, coupled with the depreciation of the naira, the total public debt is forecast to reach N130 trillion.
The President in a letter addressed to the Senate, explained that the request was anchored on an approval given by President Muhammadu Buhari-led administration, after a Federal Executive Council, FEC, meeting early in May 2023.