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Hope for impactful investment in infrastructure in 2020 budget is dim—LCCI, Budget office differs

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6 years ago

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Lagos Chamber of Commerce and Industry has said that the hope for an impactful investment in in fracture in the 2020 budget proposal is dimmed as a result of N7.33trillion out of the N10.33 trillion provision of the proposed 2020 budget is for recurrent and debt service. In a statement signed by the Director General LCCI Muda Yusuf the body of businessmen in Lagos said “We note that the total budget size is N10.3trillion.  The recurrent component is N4.88 trillion, debt service is N2.45 trillion.  Together, these two budget items amount to N7.33 trillion, which is 90 per cent total revenue estimates.  And from the track record of revenue performance, the percentage may be much higher when related to the actual numbers.  All of these indicate that the hope for an impactful investment in infrastructure is dim and would remains so for some time to come.  

Meanwhile Mr Ben Akabueze, the Director General Budget Office, says the 2020 budget presented by President Muhammadu Buhari tagged the “Budget of Growth and Job Creation” clearly defines its objectives. Akabueze made this known on the sidelines of the 2020 budget estimate presentation by Buhari in Abuja. “The budget presented by Mr President is titled the Budget of Growth and Job Creation; so, at least that clearly defines what the objectives are. The budget is intended to drive growth; it is intended to expand the economy’s capacity to create jobs. As you are aware, the president has committed to a goal of uplifting a hundred million people out of poverty over the next 10 years. And the best way to take people out of poverty is to put them into jobs to be able to earn income.”

The DG said that creating palliatives, such as Social Investment Programmes, can only serve as interim measure pending when people get jobs. Sen. Godswill Akpabio, Minister of Niger Delta Affairs, commended the President for the timely presentation of the budget. Akpabio said this would enable the country to achieve the January to December budget cycle.

Muda said “Debt service commitment and recurrent spending are beginning to crowd out capital expenditure.  This is a scenario is not in alignment with the aspiration to build infrastructure and a competitive economy.  Debt service of N2.46 trillion is more than the capital budget of N2.14 trillion. We welcome the indication given by the president to ensure the creation of a single window to strengthen trade facilitation process in the country.  The provision of the single window has been curiously elusive over the years.  We hope that this time, the necessary political will be mustered to ensure that the single window project becomes a reality.  Related to this is the absence of scanners at the nation’s ports and border posts.  It is unfitting that with our stature as the biggest economy on the African continent, we have grossly failed in the use of technology to facilitate our international trade process.

“This underlines the imperative of appropriate policy choices to attract domestic and foreign private sector capital for infrastructure financing.  The government needs to look beyond tax credit in its quest for more complimentary funding sources for infrastructure.  We should be looking more in the direction of equity financing.  But for this to happen the policy and regulatory environment must be right”. 

Commenting on the general principle of the budget Muda said “First, it is laudable that the Executive arm of government and the National Assembly have demonstrated an unequivocal commitment to the return to the January – December cycle for the federal government budgets.  This is good for planning by key players in the economy.  It would also reduce the uncertainty that has characterised the late presentation and passage of the budget in recent years. The key assumptions underpinning the budget are realistic except for the exchange rate assumption of N305 to the dollar.  This is one assumption that is difficult to justify, especially at a time when declining revenue has become a major issue both for the government and the citizens.  The 2020 budget numbers underscore the need to be more innovative in boosting revenue, reducing leakages and ensuring that revenue generating agencies of government remit what is due to government.  We need to do things differently if we must get a different result.

“In view of the critical revenue situation reflected in the budget numbers and previous revenue performance, no effort should be spared to attract private capital for investment in key infrastructures that may considered bankable.  This would reduce the financing gaps that currently exists.  The private sector looks forward to the details of the finance bill proposed by the government in order to ensure appropriate engagement with the legislature before it passage into law.  We believe that there should be a window of opportunity for stakeholders to make their inputs into the into the budget consideration process.

“It is heartwarming that the president is proposing to present an Executive Petroleum Industry Bill in a short while.  This would hopefully address the key reform expectations in the oil and gas sector.  The truth is that the sector has not been able to attract desired level investment because of grave policy limitations and the associated uncertainty in the sector.  It is important to make the crafting of the new bill an inclusive process, taking into account the perspectives of key stakeholders. We welcome the decision of government to put in place a framework for government owned enterprises to contribute better to revenue.  The introduction of benchmarks within a cost to revenue ratio framework is a move in the right direction.  We believe the many government owned enterprises can do better in their remittance of surplus to the federation account.

“Meanwhile, we look forward to the details of the Finance Bill referenced by the President in the budget presentation to the National Assembly.  It is important to ensure appropriate engagement with stakeholders before the passage of the bill into law.  We believe that there should be a window of opportunity for stakeholders in the economy to make their inputs into the budget consideration process”.

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Economy

Nigeria champions African-Arab trade to boost agribusiness, industrial growth

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3 days ago

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December 5, 2025

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The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.

The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.

The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.

He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.

“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”

Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”

The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.

With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.

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Economy

FEC approves 2026–2028 MTEF, projects N34.33trn revenue 

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4 days ago

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December 4, 2025

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Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.

The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.

He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.

Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.

The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.

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Economy

CBN hikes interest on treasury Bills above inflation rate

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4 days ago

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December 4, 2025

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The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%. 

The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.

Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.

The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.

Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.

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