Why we need to borrow despite surpassing revenue target — FG
by Hassan Muaz · The Eagle OnlineThe Federal Government on Monday gave justification for seeking foreign loans despite exceeding its revenue target for 2024.
The Senate had last week approved President Bola Tinubu’s loan request of $2.2 billion to finance the N9.7 trillion budget deficit.
Appearing before the National Assembly Joint Committees on Finance, Budget and National Planning on the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy Paper, the revenue generating agencies in their separate presentations on the 2024 budget performance and revenue projections for N49.7 trillion in the 2025 budget, made excess revenue target submissions in the 2024 fiscal year.
First to make the submission was the Comptroller-General of the Nigeria Customs Service, Bashir Adeniyi, who said by September 30 this year, Customs had raked in N5.352 trillion revenue, which is above the N5.09 trillion targetted for the entire 2024 fiscal year .
Adeniyi added that N6.3 trillion is targetted as projected revenue for 2025, a 10 percent increase, which would be the revenue target for 2026 and additional 10 percent increase for the 2027 fiscal year.
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, in his own presentation said the firm exceeded the N12.3 trillion revenue projected for 2024 by already raking in N13.1 trillion.
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Kyari said: “For the 2025 fiscal year, N23.7 trillion is projected by NNPCL to be remitted into the federation account.”
The Chairman of the Federal Inland Revenue Service, Zacch Adedeji, also informed the joint committees that the FIRS had surpassed targetted revenues across the various tax components.
According to Adedeji: “On Company Income Tax, N4 trillion was targeted, but N5.7 trillion has been realised now.
“On Education Tax, while N70 billion was targeted, a total of N1.5 trillion has been realised.
“All in all, out of N19.4 trillion targetted for 2024 fiscal year, N18.5 trillion was realised as at the end of September, which clearly shows that the target will be far exceeded by the end of the year.”
Apparently amazed by submissions of the revenue generating agencies, members of the Senator Sani Musa-led joint committees took them up on why the Federal Government is still seeking for foreign loans despite the high increase in internally generated revenues.
Specifically, Senator Adamu Aliero (PDP-Kebbi Central), who first asked the question, said: “What is the Federal Government doing with excess revenues generated by the various agencies in view of its unending request for foreign loan approval?”
Responding, the FIRS boss said loans being requested for by the executive were already part of the appropriation act.
Adedeji said: “Borrowing is part of what has been approved by the National Assembly for the Federal Government, meaning that the executive borrows based on approval of the legislature.
“The fact that we meet revenue targets and even surpassed them as revenue generating agencies does not mean that the borrowing component of an appropriation law, passed by the National Assembly, should not be activated.”
Giving a similar reason, the Minister of Budget and Economic Planning, Senator Atiku Bagudu, said the federal lawmakers should not forget that the borrowing plans contained in the N35.5 trillion 2024 budget were primarily meant to fund the deficit, which is N9.7 trillion.
Bagudu added: “Despite revenue targets surpassed by some of the revenue generating agencies, the government still needs to borrow for proper funding of the budget, particularly in the area of deficit and productivity for the poorest and most vulnerable.
“We have a long term development perspective plan agenda 2050 aiming at GDP per capita of $33,000.”
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, also explained to the federal lawmakers that borrowing was still needed for proper funding of the budget despite increased revenues made by some agencies.
However, the Nigeria Immigration Service ran into troubled waters at the interactive session over highly lopsided Private Public Partnership arrangements on passport production, which gave consultancy firms 70 percent of proceeds and government 30 percent.
The Chairman of the Committee ordered Immigration to present all the documents on the unacceptable PPP arrangement to the committee before the end of the week.
“The so-called PPP arrangement must be reviewed or cancelled because Nigeria and Nigerians are seriously being shortchanged,” Musa fumed.
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