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Economy & Politics

Nigeria needs $3trillion in 30 years to reduce infrastructure deficit – Osinbajo

Vice President Yemi Osinbajo has stated that Nigeria will need $3trillion in the next 30 years to reduce its infrastructural deficit.

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Solar, FG to slash import duties on tractors, buses, others in 2020 Finance Bill, Nigeria will not issue Eurobonds, says Vice President Yemi Osinbajo, FG guarantees mortgage loan to low income buyers at low interest rate, FG inaugurates gold refinery project in a landmark event

The Vice President, Yemi Osinbajo has said Nigeria will need $3trillion in the next 30 years to reduce its infrastructural deficit.

He disclosed this while featuring at a webinar organized by the Bureau of Public Enterprises (BPE).

Osinbajo told the webinar that Nigeria needs to adopt new models of investments for infrastructural developments because relying on public expenditure alone is not sustainable.

READ: How digital transformation will impact Nigeria’s projected $8.79 billion economic expansion

The seminar discussed the roles of Public-Private Partnership (PPP) in developing Nigerian infrastructure. The Vice President said Nigeria still face a huge infrastructural deficit, despite government investment which is a roadblock to rapid economic growth.

The Federal Government recognizes this fact, which is why we are considering other approaches to complement and boost financing for the development and maintenance of infrastructure in Nigeria.

READ: Nigeria’s Broadband subscriptions peak at 82.7m – Prof. Danbatta

“It is clear that this deficit can only be made up by private investment. Private sector is 92 per cent of GDP, while the public sector is mere 8 per cent. So, the synergy between the public and private sector through Public-Private Partnerships (PPP) is really the realistic solution.

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“The fact that only N2.49 trillion was appropriated for capital expenditure in 2020, reflects the importance of deliberate and pragmatic action to boost infrastructural spending.

READ: #EndSARS: Infrastructure and Works, Education, 3 others are prioritised in Lagos’ 2021 budget

“It seems to me to be quite clear that the financial outlay and management capability required for infrastructural development and service delivery outstrip the financial and technical resources available to government.

“In other words, the traditional method of building infrastructure through budgetary allocations is inadequate and set to become harder because of increasingly limited fiscal space,” he said.

READ: FEC okays FMBN’s request to purchase banking application software for N487.39 million

He revealed that the FG has launched a series of PPP’s to enable Nigeria meet its infrastructure deficit needs, citing the roles of agencies like the BPE with PPP’s.

The Federal Government has recently issued a circular on the administration of PPP projects in the country to provide the much-needed clarity.

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READ: AfDB to support FERMA with $10 billion for roads, others 

“The circular re-emphasises that the BPE shall be responsible for the concession of public enterprises and infrastructure already listed in the First and Second Schedules of the Public Enterprises Act.

“The circular equally stipulates that the BPE shall act on behalf of the Federal Government, as the counterparty on all infrastructure projects being developed on a PPP basis,” he said.

READ: CBN launches Private Sector-led Accelerated Agriculture Development Scheme

He disclosed that the Infrastructure Concession Regulatory Commission (ICRC) would continue to act as the regulatory agency for PPP transactions, with directives including inspections and monitoring PPP projects.

“It is expected that this new policy direction would provide clarity to stakeholders and foster the improvement of PPP programmes in the country.

“Ministries, Departments and Agencies, as well as the multilateral agencies and our development partners are urged to support the PPP policy objectives and institutional arrangements already put up by government,” he said.

READ: FG says vehicle owners to pay N250,000 to convert from petrol to autogas

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What you should know 

  • Nairametrics reported last month that Moody Investors Services revealed that Nigeria needs to spend about $3 trillion in over 30 years to bridge the infrastructural gap experienced in the country.
  • The Minister of Works and Housing, Babatunde Raji Fashola, revealed that the Federal Government needs at least N500 billion annually for the next 3 years to develop and fix its 35,000 kilometres road network, as work continues on 13,000 kilometres of the network.
  • Nairametrics also reported last month that the FG approved the establishment of an infrastructure company that will be wholly focused on critical infrastructural investments in the country.

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Business News

MDAs did not remit N3 trillion to Consolidated Revenue Fund in 6 years – Senate

Senate Committee investigations showed that MDAs were operating under illegalities in relation to funds remittance to the CRF.

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The Nigerian Senate stated that Ministries, Departments, and Agencies (MDAs) did not remit over N3 trillion to the Consolidated Revenue Fund (CRF) of the Federal Government between 2014 and 2020.

This was disclosed by Chairman, Senate Committee on Finance, Senator Solomon Adeola (APC – Lagos), in a statement on Sunday in Abuja.

The lawmaker disclosed this after the Senate’s investigation on the failure to remit 1% stamp duty by MDAS within the same time period, which saw the Minister of Finance, Zainab Ahmed and the DG of Budget Office, Ben Akabueze, present themselves to the committee.

According to the Senate Committee, investigations revealed that MDAs were operating under illegalities in relation to funds remittance to the Consolidated Revenue Fund, citing that revenue meant to be remitted may have been wasted.

READ: FG probes NPA over N165 billion unremitted surplus, suspended MD responds

What the senator said on unremitted CRF

“The committee decided to probe the revenue remittances by agencies of government.

The government cannot continue to borrow yearly while the revenue from agencies that the government is financing with the borrowings are spent contrary to the laws of the land.

From submissions already made and calculations from the Fiscal Responsibility Commission, about 60 Government-Owned Enterprises (GOEs), may have about N3 trillion of government revenue still unremitted in their coffers. Or already spent on frivolous expenditure contrary to the Constitution and FRA 2007.

We cannot continue to run government business as we used to do in this time when there are huge demands for government to fund needed infrastructure and other socio-economic programmes,”  Senator Adeola said.

The Finance Minister told the Senate Committee that the FG is considering an approach to calculate and deduct the operating charges from sources before remitting to MDAs.

READ: FG generates over N1.4 trillion from operating surplus

In case you missed it

  • Socio-Economic Rights and Accountability Project (SERAP) has asked President Muhammadu Buhari to probe the reported N39.5 billion duplicated and mysterious projects inserted in the 2021 budget.
  • This comes as a report by BudgIT revealed 316 duplicated capital projects totalling N39.5 billion, a 14% increase to the security sector allocation with no audit done in 5 years and many others.

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Economy & Politics

2021 Budget: SERAP asks Buhari to probe N39.5 billion mysterious, duplicated projects

SERAP has asked President Muhammadu Buhari to probe the reported N39.5 billion duplicated and mysterious projects inserted in the 2021 budget.

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SERAP asks Buhari to probe N39.5 billion duplicated, mysterious projects

Socio-Economic Rights and Accountability Project (SERAP) has asked President Muhammadu Buhari to probe the reported N39.5 billion duplicated and mysterious projects inserted in the 2021 budget.

This is to know if public funds have been diverted in the guise of implementing the projects and prosecute those allegedly involved including those from the executive and the National Assembly.

The request from SERAP follows a report from BudgiT last week, where they alleged that there are 316 duplicated capital projects worth N139.5 billion in the 2021 budget.

This disclosure is contained in a public statement issued by SERAP on Sunday, May 9, 2021, and can be seen on its website.

SERAP said that the investigation of the alleged duplicated and mysterious projects, which are part of the 2021 appropriation bill of N13.588 trillion, should establish whether public funds have been mismanaged, diverted or stolen in the guise of implementing these projects.

READ: SERAP asks NASS leadership to probe missing N4.4 billion, threaten legal action

What SERAP is saying in its letter

In the letter dated 8th May 2021 and signed by SERAP, Deputy Director, Kolawole Oluwadare said: “The misallocation of public funds for duplicated and mysterious projects has seriously undermined the ability of the indicted MDAs, and the government to ensure respect for Nigerians’ human rights through developing and implementing well-thought-out policies, plans, and budgets.”

The letter from SERAP partly reads, “BudgIT had in a report last week stated that there are 316 duplicated capital projects worth N39.5 billion in the 2021 budget. The duplicated and mysterious projects are contained in the 2021 appropriation bill of N13.588 trillion signed into law in December 2020.”

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These damning revelations suggest a grave violation of the public trust, and Nigerians’ rights to education, health, water, sanitation, and a clean and satisfactory environment because the indicted MDAs have misallocated public funds at the expense of the people’s access to basic public services, and enjoyment of rights.”

READ: SERAP gives FG 7 days to disclose details of payment of N729bn to 24.3m Nigerians

SERAP urges you to ask the heads of the MDAs involved to explain why they allegedly failed to ensure strict compliance with constitutional and international standards of transparency and accountability in the preparation, processes and decisions on their budgets, and to return any misallocated public funds to the public treasury.”

Investigating and prosecuting any allegations of mismanagement, diversion and stealing of public funds budgeted for the 316 duplicated and mysterious projects would allow your government to use the budget to effectively promote Nigerians’ access to essential public goods and services.

Publishing the ‘implementation status’ of the duplicated and mysterious projects would allow Nigerians to hold their government to account in the spending of public funds. This is particularly true for marginalized and excluded groups, such as people living in poverty, women, children, and persons with disabilities, as the budget has a disproportionate impact on their welfare.”

READ: SERAP sues Buhari over FG’s plan to borrow N895bn from dormant accounts, unclaimed dividends

We would be grateful if the recommended measures are taken within 14 days of the receipt and/or publication of this letter. If we have not heard from you by then, the Incorporated Trustees of SERAP shall take all appropriate legal actions to compel your government to comply with our request in the public interest.” 

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SERAP also urges you to direct Mrs Zainab Ahmed, Minister of Finance Budget and National Planning to publish full details of current ‘implementation status’ of the duplicated and mysterious projects, and any spending on the projects to date, including the 115 projects inserted in the budget of the Ministry of Health; the 23 projects inserted in the budget of the Ministry of Education, and 10 projects inserted in the budget of the Ministry of Water Resources.

READ: Instruct EFCC, ICPC to monitor spending on Coronavirus, group tells Buhari

The following ministries are reportedly involved in the duplicated and mysterious projects: Ministry of Health with 115 projects; Ministry of Information and Culture with 40 projects; Ministry of Agriculture and Rural Development with 25 projects; Ministry of Education with 23 projects; Ministry of Transportation with 17 projects; and Ministry of Science and Technology with 17 projects.”

Others are the Ministry of Environment with 13 projects; Ministry of Power with 11 projects; Ministry of Labour and Employment with 11 projects, and Ministry of Water Resources with 10 projects.”

The letter was copied to Mr Malami; Professor Bolaji Owasanoye, Chairman Independent Corrupt Practices and Other Related Offences Commission (ICPC); Mr Abdulrasheed Bawa, Chairman, Economic and Financial Crimes Commission (EFCC); and Mrs Ahmed, the Finance Minister.

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