The attention of the Federal Ministry of Finance, Budget and National Planning and its Minister has been drawn to the story making the rounds in the media in respect of the budget for ‘Project: National Social Safety Nets Project – Scale Up (NSSNP-SU) – N206,242,395,000’.
The story in a national daily alleging budget padding entitled ‘Finance Ministry on the spot over N424bn ‘padding’ is fabricated and misleading, because the said insertions allocated to the said items and sources in the budget proposal is also unfounded.
We hereby wish to respond by putting the record straight: The project so referred is domiciled in the Ministry of Humanitarian Affairs, Disaster Management and Social Development headquarters.
The World Bank is the funding source for the National Social Safety Net-Scale Up project to the tune of $473,500,000 which is equivalent to N206,242,395,000, using the N435.57/USD exchange rate.
The project was correctly described in the submission from International Economic Relations Department (IERD) for the 2023 budget. But, unfortunately, a wrong code was selected from the drop down menu which resulted in a wrong description of the project which resulted in it being captured as ‘Purchase of
Security Equipment’ in the Government Integrated Financial Management Information (GIFMIS) Budget Preparation System (BPS).
Please, note that the BPS has a limited range of encoded programme/project descriptions.
Also note that the multilateral loans are usually project’s tied, and have specific codes in the budget system.
The multilateral loans are different from the envelopes usually given to ministries, department and agencies (MDAs).
The funds are drawn by the beneficiary Ministries under the terms of the agreements, and the financial institutions disburse directly to service providers. There were ample opportunities to review details for observations by Ministries and corrections made by the Budget Office of the Federation (BOF).
The proposed 2023 budget for each Ministry was circulated for review and feedback, then Federal Executive Council (FEC) reviewed it before it was submitted to NASS by President Muhammadu Buhari.
You may recall that the federal government for a very long while has made significant progress in its budgeting process; just a few months ago, Nigeria at the Open Budget Survey (OBS) improved by 24 points to record its best budget performance.
This administration has undeniably been highly committed to budget transparency, having undertaken various reforms in the public finance management space which have culminated in the significant recorded improvements.
Therefore, the amount of N206,242,395,000 is correct. The error in description is regretted, and will be corrected through the Appropriations Committee. In response to the allegation of some line items being inserted into the fiscal estimates for Ministry of Defence and Ministry of Power, the 2023 Appropriation Bill as presented has the following for the above-mentioned ministries and the agencies:
1. Ministry of Humanitarian Affairs, Disaster Management and Social Development
Project: National Social Safety Nets Project – Scale Up (NSSNP-SU) – N206,242,395,000
This project is domiciled in the FMHADM&SD HQ. The World Bank is the funding source for the project to the tune of $473,500000 which is equivalent to N206,242,395,000 using the N435.57/USD exchange rate. This project was correctly described in the submission from IERD for the 2023 budget, but unfortunately, a wrong code was inadvertently inserted which resulted in it being captured as Purchase of Security Equipment in the GIFMIS Budget Preparation System (BPS).
2. Ministry of Defence (MoD)
Project: Refurbishment and Procurement of Harris RF-5/7800 Military Communication Equipment – N8,600,000,000
The Honourable Minister of Defence wrote to Mr. President requesting the approval and release of $1,363,880.40 and N158,928,045.37 for the implementation of Phase 1 of the project. He also requested that the sums of $12,274,923.60 and N11,946,311,375.18 will be required to implement Phases 2 and 3 of the project, which Mr. President graciously approved. 50% of the requirement for Phases 2 & 3 (using the exchange rate of N435.57/USD), amounting to N8,600,000,000, has been included in the 2023 budget proposal of the MoD.
Project: Safe School Initiative (SSI) – N2,250,000,000
The Defence Headquarters submitted its uncosted requirements under this programme. The SSI Secretariat, Federal Ministry of Finance, Budget & National Planning (FMFBNP), however, submitted a request of N4.5bn for MoD, of which only N2.250bn was provided in the 2023 budget.
3. The Federal Ministry of Power (FMoP)
The submission for the 2023 Multilateral/Bilateral Tied-Loan project for FMoP is a total of N195,465,151,790.65 with a breakdown as follows:
The Zungeru Hydro- Electric Power Project is funded by Export-Import Bank of China. Amount: USD175,757,149.92, which is N76,554,541,790.65.
The Power Sector Recovery Operation (PSRO) is funded by World Bank. Amount: USD162,000,000, which is N70,562,340,000.00.
The Nigeria Electrification Project (NEP), to be executed by the Rural Electrification Agency (REA), is funded by World Bank and AfDB. Amount: USD55,000,000, which is N23,956,350,000.00.
The Nigeria Electricity Transmission, to be executed by Transmission Company of Nigeria (TCN)), is funded by the World Bank. Amount: USD56,000,000, which is N24,391,920,000.000.
The total of the fund for the four projects is USD448,757,149, which is N195, 465,151,790.
Signed
Yunusa Tanko Abdullahi
Special Adviser, Media & Communications
To the Honourable Minister of Finance, Budget & National Planning
24/11/2022
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