FG’s debt service gulps 99% of revenue in 6 months – Budget Office
. . FG prepares to submit 2024 budget in October
By Tunde Karounwi
The federal government deployed almost all of its revenues generated within the first half of the year – 99 per cent – to service debt, the budget office stated on Monday.
Salient Times report that the figures show that between January and June 2023, the total retained revenue of the federal government totalled N4.06 trillion, while it used as much as N4.02 trillion to service debt within the same period.
Olumide Ayodele, technical assistant to the director general of the budget office, who spoke on the matter in Abuja, said government revenues have remained below expectations as out of the N5.52trillion targeted for the first six months of the year, some N4.067 trillion was generated, indicating N1.46 trillion shortfall.
Ayodele spoke at the training of budget officers in federal ministries, departments and agencies of government ahead of the 2024 budget preparations.
According to him, the extent to which the government can mobilize revenue within its agencies will also determine the level of services it can provide citizens.
Of the total N4.067 trillion retained revenue for the period, N604.1 billion was generated from the oil sector, while non-oil revenue was N1.14 trillion. Company Income Tax (CIT) and Value Added Taxes (VAT) were N592.68 billion and N195 billion respectively.
The total revenue collected by the Customs Service was N306.18 billion, while other revenues amounted to N2.14 trillion.
According to Ayodele, of the N7.76 trillion actual spending for the year’s first half, N4.02 trillion was spent on debt servicing and N2.28 trillion on personnel costs, including pension.
He, however, noted that only about N475.98 billion has been released for capital expenditure as of June 2023.
“Government is not mobilizing enough revenue but is expected to provide efficient services to the citizens. When we provide efficient services, people will be willing to pay,” he said.
Speaking further, Ayodele stressed the importance for MDAs to ensure that funds provided are used strictly for capital projects, “every fund provided for capital spending must be effectively utilized because they are borrowed funds.
“The orientation of the current Administration is not to borrow further; the cost of servicing previous loans is not so high, amounting to over 50 per cent of government revenue. The government is trying to reduce borrowing while increasing revenue collections.”
He also urged that in preparation for the 2024 budget, trainees should focus on completing ongoing projects rather than new ones. According to him, this will help check and reduce cases of abandoned projects across the country.
In his remarks, Isah Gwangwazo, the director of expenditure and socials at the budget office, noted that the training was aimed at enhancing the collective capacity of participants to effectively use the Budget Preparation Sub-System of the Government Integrated Financial Management Information System in the budget preparation process.
Representing Ben Akabueze, the director general of the budget office of the federation, Gwangwazo said that the training session underscores the government’s determination to enhance fiscal discipline and accountability in the management of public funds.
“Collaboration and synergy between the various MDAs is paramount to achieve this. We must harmonize our sectoral policies and programmes with the overarching National Development Plan 2021- 2025 and the specific programmes of this Administration.”We must ensure that our efforts are synchronized, resources are optimally utilized, and the impact of our collective work resonates across the nation.
“It is essential to note that President Tinubu’s Agenda sets the stage for a transformative era in our great nation. This agenda outlines the framework for sustainably achieving inclusive socio-economic growth, infrastructural development, and the overall well-being of our people. It is, therefore, incumbent upon us to integrate the tenets of this agenda into our respective roles and responsibilities,” he said.
FG prepares to submit 2024 budget in October
Meanwhile, through the ministry of Budget and Economic Planning, the Federal Government commenced the preparation of the 2024 budget, which it plans to submit in October 2023.
To achieve this, the budget office of the federation on Monday embarked on 2024 preparation training, principally on the Government Integrated Financial Management Information System Budget Preparation Sub-System (GIFMIS/BPS), for all Ministries, Departments, and Agencies (MDAs).
Ben Akabueze, Director General of the Budget Office of the Federation (BoF), said the training session underscores the budget office’s determination to enhance fiscal discipline and accountability in managing public funds.
Represented by Hapsatu Mormoni, director of revenue and fiscal policy, now the Ministry of Economic Planning and Development, he said, “This crucial training is aimed at enhancing your collective capacity to effectively use the Budget Preparation Sub-System of the Government Integrated Financial Management Information System in the budget preparation process.”
According to him, the GIFMIS budget preparation subsystem training programme provides participants with the tools and knowledge required to facilitate its budgetary processes. “This technology-driven system enhances our efficiency, minimizes bottlenecks, and enhances accountability,” he said.
“As we gather here, it is imperative that we recognize the significance of our roles in aligning our activities with the Nigerian people’s aspirations and the current Administration’s development agenda. President Tinubu’s Administration is committed to fulfilling its promises to our citizens. Our focus, therefore should remain steadfast on using it as a veritable tool for delivering the government’s commitment to all Nigerians.
“Collaboration and synergy between the various MDAs is paramount to achieve this. We must harmonize our sectoral policies and programmes with the overarching National Development Plan 2021- 2025 and the specific agenda of this Administration. We must ensure that our efforts are synchronized, resources are optimally utilized, and the impact of our collective work resonates across the nation.
“MDAs are urged to study the Budget Call Circular in detail and avoid making mistakes that should ordinarily be avoided if they had complied with the relevant sections of the Call Circular. To this end, emphasis will be made in one of the modules this year on key items and sections to note in the 2024 FGN Budget Call Circular. To avoid doubt, we have the BOF Helpdesk running at full capacity currently to take care of all enquiries that officers may have in the preparation of their respective budgets,” Akabueze said.
During the interview session with journalists, Mormoni said, “We have to submit it before the end of October. We hope to meet the deadline so that the National Assembly can also do their own, and then the budget is passed within the year.”
On the 2023 budget, she said, “We are doing well, and we hope to bring out the figure very soon.”
Ade Agbana Titus, director of procurement, said the training would run across the six geopolitical zones within two weeks.
He said procurement before now was a mirage that cannot be assessed, but these days, some of the hitches in the procurement have been amended so there will be no bottlenecks in the processes. “Now we are trying to make sure we meet up with the budget,” he said.
