Lawmakers at the Senate have passed into law a supplementary budget of N895 billion, with an increase of N87billion billed for augmenting the 2021 budget following the negative effect of COVID-19 on the nation’s economy.
The lawmakers’ approval followed Senator Jibrin Barau-led Senate Committee on Appropriation report which held that the supplementary budget would augment the effort of various government agencies to discharge their responsibilities efficiently.
President Muhammdu Buhari had two weeks ago submitted the bill and sought the consideration and approval of a supplementary budget of N895bn for the country from both Senate and House of Representatives.
Buhari had proposed N895.842,465,917bn but the Senate Committee on Appropriation in its report presented by the Chairman, Barau Jibrin, increased the budget size to N982,729,695,343.
The breakdown showed that N123,332,174,164 is for recurrent (non-debt) expenditure while the sum of N859, 397,521,179 is for contribution to the development fund for capital expenditure for the year ending on the 31st day of December 2021.
Meanwhile, Senator Barau while giving details of the report during plenary on Wednesday, noted that security agencies would be able to procure arms and equipment needed to defeat terrorism across the country.
Also, the lawmakers approved the request of the Buhari-led Federal Government to borrow N2,343,387,942,848, to part-finance the 2021 federal budget size of N13trn following the approval by the Clifford Ordia-led Committee on Local and Foreign Loans as presented by the Chairman,
The committee recommended that the Senate approves Buhari’s request for the issuance of $3,000,000,000 but not more than $6,183,081,643.40, Eurobond in the International Capital Market.
The External Borrowing of N2,343,387,942,848, according to the committee, should be for the financing of part of the deficit authorized in the 2021 Appropriation Act.
Meanwhile, Ordia in his presentation, said that in considering the president’s request, the committee put into considerations the serious concerns of Nigerians about the level of sustainability and servicing of Nigeria’s External Borrowings.
According to him, due to the short fall in our annual revenues in relation to our need for rapid infrastructural and human capital development, we had to pass deficit budget every year requiring us to borrow to finance the deficit in our budget.
Ordia explained that the new borrowing was calculated at Exchange rate of USD1/N379, and raised from multiple sources – multilateral and bilateral lenders through the issuance of Eurobonds in the International Capital Market.
He emphasized that the proceeds of the USD$6.183 would be used to fund various specific capital projects specifically from priority sectors of the economy namely; Power, Transportation, Agriculture, and Rural Development, Education, Health, Provision of counterpart funding for Multilateral and Bilateral Projects, Defense and Water Resources.