Tinubu Seeks fresh $2.5bn loan from World Bank for 2024 Supplementary Budget says Bagudu
Sola Shittu, Abuja
The federal government is seeking $2.5 billion loan from the World Bank to fund the 2024 supplementary appropriation bill submitted by President Bola Ahmed Tinubu to the Senate.
The Minister of Budget and Economic Planning, Senator Atiku Bagudu who disclosed this on Tuesday said the proposed 2024 Appropriation Bill will also be partly funded with the N50bn Presidential Infrastructure Development Fund (PIDF), which is currently domiciled in the National Sovereign Wealth Investment Authority (NSWIA).
He said the N50bn in the PIDF would not be enough to fund the Renewed Hope Transformational Projects hence the Federal Government approached the World Bank for a $2.5bn loan.
According to him, the World Bank management would meet soon to take a decision on its approval.
Bagudu who disclosed this while briefing the Joint Senate and House of Representatives Committee on National Planning and Economic Affairs over the proposed Supplementary Appropriation Bill said President Bola Tinubu had penultimate week, told the joint session of the federal parliament that he would soon send the proposed supplementary bill to the federal lawmakers for approval.
The Minister said the Supplementary Budget, which is still being prepared, would be spent on four identified transformational projects.
He listed the projects to include Lagos – Calabar Coastal Road; the proposed Sokoto – Badagri Road; the completion of all ongoing railway projects, which the Federal Government had yet to provide counterpart funding for
Atiku Bagudu also said the proposed money Bill would fund the rehabilitation and expansion of dams and irrigation schemes in order to support increased production within the economy.
Apart from this, he said the supplementary budget would provide more money to support CNG, LNG projects to provide for more energy competitiveness.
He said a study done by the Federal Ministry of Science, Technology and Innovation showed that CNG vehicles are cheaper to maintain than petrol-powered ones.
The Minister added the trans-Sahara highway which the current administration inherited would also be funded with the supplementary budget.
“The supplementary budget that was announced or rather was mentioned,
came about when Mr. President presented a memo to the Federal Executive Council.
“In the memo, he said that he inherited the Presidential Infrastructure Development Fund, which was domiciled in the National Sovereign Wealth Investment Authority.
“He has also identified transformational projects, including Lagos – Calabar, Coastal Road; proposed Sokoto-Badagri Road; completion of all ongoing railway projects, which we have not provided counterpart funding.
“We also plan to fund the rehabilitation and expansion of dams and irrigation schemes in order to support increased production within the economy. Last but not the least, more money to support CNG, LNG
“The three roads, dams and irrigation, and railways, is what Mr. President designated as the infrastructure, renewed health infrastructure priority items.
“So that’s what he directed that the ministry prepare for appropriation supplementary appropriation Bill.
“We have not finished work on the bill, we have not submitted the supplementary appropriation draft to the Federal Executive Council yet.
“So many people have approached the ministry and indeed leadership of the National Assembly as well as many members asking about the renewed hope the supplementary appropriation,” he said.
The Minister also said the current agitation by the organised labour minimum wage agitation might also be considered in the proposed legislation.
He said, “We are not clear how much revenue we have, given the challenges of the moment.
“Yes, we have done some scenarios given the exchange rate fluctuation and the impact of the budget and even scenarios given the current minimum wage negotiation that is ongoing.
“This is because even at N60,000, even at N62,000, that immediately doubles the minimum wage.
“So it was the forecast that even at the lowest level, it will increase inflation rate and that might affect interest rates which will affect in turn, economic activity, debt surges among others.
On the 2024 Budget performance, the Minister explained why some MDAs had not started projects.
He also said the Federal Government has mandated the Finance Ministry to take over payment of some major contractors.
He said, “unlike the usual practice where every quarter the ministry of finance sent money to MDAs depending on what the envelope size is. That has been discarded and replaced by the bottom up cash.
“Under our procurement laws, ministries and MDAs are supposed to commence procurement as soon as the budget is passed into law.
“So most MDAs are in that process now. The first quarter capital releases is not high because most MDAs have not yet awarded the contracts and consequently they have not put any request for cash.
“We believe that it will pick up in this second quarter and subsequent quarters. So the budget performance will be difficult as procurement processes are completed by MDAs.
“Equally, as part of an effort for better treasury management, the federal Ministry of Finance have now decided that for some category of contracts, they will be doing the payments.
“So again, that is intended to ensure that financial resources are pooled in one place, rather than sent to various MDAs awaiting processes. So those are the broad brief on the 2024 budget.”
The Chairman of the Senate Committee, Senator Yahaha Abdullahi suggested the amendment to the 2024 Budget instead of a fresh appropriation because of the huge cost of processing it.
He, however said the executive arm of government is at liberty to determine how it want to get its appropriation bill approved by the parliament.
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