By Musa Baba Adamu and Ikechukwu Okaforadi
The senate yesterday approved the federal government Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper for 2021, 2022 and 2023.
President Muhammadu Buhari had submitted the MTEF/FSP to the Senate for its consideration and approval.
The Senate Committees on Finance and National Planning and Economic Affairs which submitted the reports to the plenary after conducting public hearing where identified revenue generating Ministries, Departments and Agencies (MDAs) of the federal government participated.
The Senate in its reports approved the daily crude oil productions at 1.86mbpd, 2.09mbpd, and 2.38mbpd for 2021, 2022 and 2023 respectively and pegged the oil price of USD$40 per barrel for the years under consideration.
It further approved the exchange rate of N379/US$ proposed by the proposed by Executive, even as it approved the projected GDP growth rate of 3.00 percent.
It explained that this was needed because of the government’s response fiscal policies adapted specifically to contain the damage from Covid-19, including the N500billion stimulus fund.
According to the Senate, the Executive projected Inflation rate of 11.95%, Fiscal deficit estimate of N5. 16 trillion (including GOEs) and its projected new borrowings of N4.28 trillion (including Foreign and domestic Borrowing) should be sustained, subject to the provision of details of the borrowing plan to the National Assembly.
It further approved: “That the following sundry parameters in the 2021-2023 MTEF/FSP Document be also sustained: FGN retained revenue of N7.89 trillion; total FGN proposed expenditure of N13.08 trillion; Fiscal deficit of N5.19 trillion (including GOEs); New Borrowings of N4.28 trillion (including Foreign and domestic Borrowing);
“Statutory transfers, totaling, N484.4 billion; Debt Service estimate of N3.12 trillion; Sinking Fund to the tune of N220 billion; pension, Gratuities and Retirees Benefits of N520.6 billion; and Aggregate FGN Expenditure of N13.08 trillion; made up of Total Recurrent (Non-debt) of N5.66 trillion; Personnel Costs (MDAs) of N3.05 trillion; of Capital expenditure (exclusive of Transfers) N3.58 trillion; Special Intervention (Recurrent) amounting to N350 billion; and Special intervention (Capital) of N20 billion.”
To address some observed lapses among revenue generating MDAs, the Committees recommended for “the immediate legislative actions to amend the Fiscal Responsibility Act (FRA, 2007) to improve revenue generating and remittance capacity of Agencies of the Federal Government, in particular Section 21 (1) and Section 22(1)(2).’
It also wants “immediate steps be taken by relevant Standing Committees of the Senate to examine the laws guiding the operations of all revenue generating agencies under their oversight to determine specific sections/clauses requiring amendment with a view to plugging wastages and boosting revenue generation capacity of government.”
It further recommended that the streamlining of all Stamp Duty collection activities by the MDAs and domicile with FIRS, to eliminate loss and to deploy the use of ICT in the collection of these stamp duties.
It also wants the Ministry of Finance, Budget and National Planning, as well as the Budget Office of the Federation to re-examine the assumptions underlying the revenue targets of all the federal government agencies, to ensure the credibility of such assumptions, and the figures arising therefrom.