Tinubu Seeks New $2.5bn Loan From World Bank For 2024 Supplementary Budget, Says Bagudu.

The Nigerian government is seeking a $2.5 billion loan from the World Bank to fund the 2024 supplementary appropriation bill, which President Bola Ahmed Tinubu has submitted to the Senate, thenewshaus.com now confirms.

Senator Atiku Bagudu, Minister of Budget and Economic Planning, announced on Tuesday that the proposed 2024 Appropriation Bill will also be partially funded by the N50 billion Presidential Infrastructure Development Fund (PIDF), which is currently housed in the National Sovereign Wealth Investment Authority (NSWIA).

He stated that the N50 billion in the PIDF would not be enough to fund the Renewed Hope Transformational Projects, so the Federal Government approached the World Bank for a $2.5 billion loan.

According to him, the World Bank’s management will meet soon to decide on its approval.

Bagudu, who made the revelation while briefing the Joint Senate and House of Representatives Committee on National Planning and Economic Affairs on the proposed Supplementary Appropriation Bill, stated that President Bola Tinubu told the joint session of the federal parliament last week that he would soon send the proposed supplementary bill to federal lawmakers for approval.

The Minister stated that the supplemental budget, which is still being prepared, will be spent on four identified transformational projects.

He listed the projects as the Lagos-Calabar Coastal Road, the proposed Sokoto-Badagri Road, and the completion of all ongoing railway projects that the Federal Government had yet to provide counterpart funding for.

Atiku Bagudu also stated that the proposed money Bill would fund the rehabilitation and expansion of dams and irrigation schemes to support increased production in the economy.

Aside from that, he stated that the supplementary budget would include additional funding for CNG and LNG projects to increase energy competitiveness.

He stated that a study conducted by the Federal Ministry of Science, Technology, and Innovation found that CNG vehicles cost less to maintain than gasoline-powered vehicles.

The Minister also stated that the trans-Saharan highway, which the current administration inherited, would be funded through the supplementary budget.

“The supplementary budget, which was announced or rather mentioned,
came about when Mr. President delivered a memo to the Federal Executive Council.

“In the memo, he stated that he inherited the Presidential Infrastructure Development Fund, which was held by the National Sovereign Wealth Investment Authority.

“He has also identified transformational projects, such as the Lagos-Calabar coastal road, the proposed Sokoto-Badagri road, and the completion of all ongoing railway projects for which we have not provided counterpart funding.

“We also intend to fund the rehabilitation and expansion of dams and irrigation schemes to support increased production in the economy. Last but not least, more funding to support CNG and LNG

“The three roads, dams and irrigation, and railways are what Mr. President has designated as infrastructure, renewed health infrastructure priority items.

“So he directed that the ministry prepare a supplementary appropriation bill.

“We have not finished work on the bill, and we have not yet submitted the supplementary appropriation draft to the Federal Executive Council.

“So many people have approached the ministry and the leadership of the National Assembly, as well as many members, to inquire about the renewed hope for the supplementary appropriation,” he stated.

The Minister also stated that the current organised labour minimum wage agitation may be considered in the proposed legislation.

He stated, “Given the current challenges, it is unclear how much revenue we have.

“Yes, we have run some scenarios based on exchange rate fluctuations and the budget’s impact, as well as scenarios based on the current minimum wage negotiation.

“This is because, at N60,000 or N62,000, the minimum wage is immediately doubled.

“So it was predicted that even at the lowest level, it would raise inflation, which could affect interest rates, affecting economic activity and debt surges, among other things.

Regarding the 2024 Budget performance, the Minister explained why some MDAs had not begun projects.

He also stated that the Federal Government has directed the Finance Ministry to take over the payment of some major contractors.

He stated that “unlike the usual practice of the ministry of finance sending money to MDAs every quarter depending on the size of the envelope.” That has been discarded in favour of bottom-up cash.

“Under our procurement laws, ministries and MDAs are required to begin procurement as soon as the budget is signed into law.

“So the majority of MDAs are currently going through that process. The first quarter capital releases are low because most MDAs have yet to award contracts and, as a result, have not requested cash.

“We believe it will pick up in the second and subsequent quarters. Budget performance will be difficult because procurement processes are completed by MDAs.

“Equally, as part of an effort to improve treasury management, the Federal Ministry of Finance has decided that they will handle payments for certain types of contracts.

“So, again, this is intended to ensure that financial resources are pooled in one location rather than being distributed to various MDAs awaiting processing. So those are the broad strokes of the 2024 budget.”

Senator Yahaha Abdullahi, Chairman of the Senate Committee, suggested an amendment to the 2024 Budget rather than a new appropriation due to the high cost of processing it.

He did, however, say that the executive branch of government is free to decide how it wants its appropriation bill approved by parliament.