Barely 10 days to the end of 2022, President Muhammadu Buhari has asked Senate to approve N819.5 billion supplementary budget for the 2022 fiscal year to fix infrastructure destroyed by floods.
The appropriation, contained in a letter read at plenary by Senate President Ahmad Lawan, is meant for the capital expenditure component of the 2022 budget, with increase in deficit to N8.17 trillion.
Buhari noted that he would embark on additional domestic borrowing to finance the proposed N819.5 billion supplementary budget. The letter reads: “The year 2022 has witnessed the worst flood incident in recent history, which has caused massive destruction of farm lands at a point already close to harvest season.
“This may compound the situation of food security and nutrition in the country. The flood has also devastated road infrastructure across the 36 states and the Federal Capital Territory, as well as bridges nationwide that are critical for movement of goods and services. The water sector was equally affected by the flood, and there is a need to complete some ongoing critical projects that have already achieved about 85 per cent completion.
“The nine critical projects proposed in the sector cut across water supply, dam projects and irrigation projects nationwide. I have approved a supplementary budget of 2022 appropriation of N819.536 billion, all of which are capital expenditure. The supplementary budget will be financed through additional domestic borrowings, which will raise the budget deficit for 2022 to N8.17 trillion and deficit to GDP ratio to 4.43 per cent.”
Being a proposal meant for a year with just 10 days to its end, the Senate President hurriedly forwarded the matter to the Senate Committees on Appropriation, Finance, Works, Water Resources and Agriculture for expeditious consideration.
ALSO, in another letter, the President requested approval for restructuring of N23.7 trillion Ways and Means advances given to the Federal Government by the Central Bank of Nigeria (CBN).
Ways and Means are advances from the CBN to the government for emergency funding of delayed receipt of fiscal deficit. The letter titled: ‘Restructuring of Ways and Means Advances’, reads in part: “The Ways and Means advances by the CBN to the Federal Government has been a funding option to the government to cater for short-term or emergency finance to fund delayed government expected cash receipt of physical deficit.
“The Ways and Means balances, as at December 19, 2022 is N22.7 trillion. I have approved the securitisation of the Ways and Means balances along the following terms: amount, N23.7 trillion; tenure, 40 years; moratorium on principal repayment, three years; pricing interest rate, nine per cent.
“Your concurrence and approval is sought to allow for the implementation of same.” Lawan forwarded the request to the Senate Committee on Finance for report, consideration and passage at plenary today.