Business Cover

FG plans supplementary budget for Covid-19 vaccination

*Insists on Nigerian made cars for govt agencies

By Chesa Chesa

The Presidency says it will soon present a supplementary budget to the National Assembly to fund the purchase of Covid-19 vaccines and subsequent vaccination of frontline workers in the country.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said so at the Aso Rock Villa on Thursday, while recalling that there was no provision in the 2021 Budget to fund  Covid-19 vaccines.

“There will be a supplementary budget, the first one will be in March relating the COVID-19 pandemic but we will also have a mid-year review like we did last year of the budget and if at the time we do the review and there is a need to go back to do any amendment for supplementary budget, at that time we will take that decision, if not, we will just report the review”, she said.

Ahmed also reassured Nigerians that the country’s debt profile was still within sustainable limit and that the economy would start growing against soon.

She said: “There is a lot of sensitivity in Nigeria about the level of borrowing by the government and it is not misplaced. And I said earlier that the level of borrowing is not unreasonable, it is not high. The problem we have is that of revenue. So, what we need to do is to increase revenue to be able to enhance our debt to GDP obligation capacity. 

“If we say we will not borrow and therefore not build rails and major infrastructure until our revenue rises enough, then, we will regress as a country. We will be left behind, we won’t be able to improve our business environment and our economy will not grow. 

“So, it is a decision that every government has to take. Our assessment is that we need to borrow to build our major infrastructure. We just need to make sure that when we borrow, we are applying the borrowing to specific major infrastructure that will enhance the business environment in this country. 

“Again, we  all have to work not just the federal government but state governments to increase our revenue to enhance our debt service obligations. We also have to make sure that when we are choosing the projects, we are choosing carefully the ones that will enhance business environment so that more revenue yields come into the treasuries of the country.”

She noted that the total borrowing of the country as at 31 of December is 21.6percent of the GDP. 

“So, if we were not looking at adding the other category of loans that I mentioned, we don’t even need to increase that at this time. As at 2019, the debt to GDP ratio was 19.2percent so only two percent was added”, she explained.

Speaking on the impact of rising crude oil price, the Finance minister said: “The more revenue we realize out of the budget, the less we borrow. As we see the oil price rising and provides us more revenue, it provides us some reliefs. We will be able to reduce our borrowing so, it is a positive thing for us and also, we have a provision in the 2021 budget for immunization. 

“We are already releasing  money to the health authority to start operation in the first batch of vaccines that is going to arrive the country in one week. But what we have in the budget is not enough, so we are working with the health authorities to provide a plan that will be taken to the President for approval and to be taken to the  National Assembly as a supplementary budget specifically for Covid-19 vaccination.”

Giving an update on loans from development partners, Ahmed further revealed that “we closed 2020 by being able to realize $3.4 billion from IMF, $600million from AfDB. We were not able to conclude our negotiation with the World Bank and also with the Islamic Development Bank. 

“Even with Islamic Development Bank, we signed for the last tranches but for the World Bank, we started negotiation with the World Bank with the list of about 10 requirements that we needed to address and we had addressed those 10 requirements but, the World Bank position is that we have not sufficiently addressed the requirements relating to having a single exchange rate. 

“Their view is that despite the fact that we have adjusted the official exchange rate from N305 to N360 and we further on moved to I&E (Investors and Exporters) or the NAFEX (the Nigerian Autonomous Foreign Exchange Fixing) window, and as we speak, federal government inflows and outflows are monitized  at the Nafex window rate. 

“So, we feel we have met that requirement but the World Bank is saying that we have to close that gap between the black market and NAFEX window. 

“Our point is that is not what you do over night. It’s not that you wake up and make a pronouncement and that happens. It’s something that you have to do over time taking several measures and working systematically for it to happen. 

“So, we are still pushing our view with the World Bank and we hope to convince them that this all requirement has been met and that they should now give us approval to go ahead and release the $1.5 billion that we have been discussing with the World Bank. 

“But having said that, the World Bank during 2020 has also given us approval for a number of facilities. One of them is the $500 million for metering system for the distribution network, $750 million for the power sector recovery programme and several other facilities that we have on table with the World Bank that were approved during the course of the year 2020.”

Ahmed said there are plans to get the Federal Executive council to approve a memo to compel MDAs to prioritise patronage of Nigerian made products.
She said: “The federal government is committed to buying made-in-Nigeria products and buying made-in-Nigeria vehicles in particular. So, we will be hoping to have a Federal Executive Council approval to compel federal government agencies to buy made in Nigeria vehicles as much as is practicable. 
“So when the security agencies need a security vehicle that has special design, and you don’t have it in Nigeria, we will still need to buy the ones that are outside. 

“We’re hoping to also engage the States and encourage the States to take similar measures. It is important for us because we want to make sure the automotive industry survives and grows. 
“The Federal Ministry of Industry, Trade and Investment has just finished a review of automotive policy, which has been running now for seven years. I must say that the policy has not been reviewed before, so this is the first review that is being done and the essence of the review is to see whether it has achieved the designed targets.
“Once the Ministry gets its approvals, then the review will be announced and perhaps there will be a refreshing of the measures that are contained in that policy.”

Related Posts

Leave a Comment

This News Site uses cookies to improve reading experience. We assume this is OK but if not, please do opt-out. Accept Read More