National Assembly Passes N6.2trn 2024 Appropriation Act, Finance Act

•Defence, agric, take lion share

•FG gets 70 % of banks’ windfall

•Edun at NASS: FG injects N1trn into manufacturing sector

Sunday Aborisade in Abuja

The two chambers of the National Assembly, Tuesday, passed the N6.2 trillion 2024 Appropriation Act (Amendment Bill) 2024.

The money bill was transmitted to the federal legislature on Wednesday, July 17 by President Bola Tinubu.

The National Assembly, also on Tuesday, passed the Finance Act targeted at funds that accrued to Nigerian banks since the commencement of the current forex regime in the country.

The appropriation act amendment bill was meant to provide for the sum of N6,222,595,926,139. Out of the amount, N3, 222,595,926,139.00 was meant for Capital Expenditure and N3,000,000,000,000.00 was for Recurrent Expenditure.

While the N3.2 trillion was meant to fund legacy projects, and other sectors of the economy, the other N3trn was expected to fund the new minimum wage of N70,000.

The two chambers had last week suspended their rules to accommodate the first and second reading of the bill, and referred it to the Committee on Appropriations for further legislative action.

Leading the debate on the legislation at the Committee of Supply, Tuesday, Chairman, Senate Committee on Appropriation, Senator Solomon Adeola, reminded his colleagues that the N28,777,404,073,861 2024 Appropriation Bill was passed into law by the National Assembly last year and was subsequently assented to by the president on January 1, 2024.

Adeola said, “The 2024 Appropriation Act (Amendment) Bill seeks to, among others, make available additional funds for Renewed Hope Infrastructure Development Projects, to be undertaken across the country and to meet other recurrent expenditure requirements, such as the minimum wage increase necessary for effective governance of the federation.

“Considering the fact that the committee was mandated to report back to the senate on the bill within one week, the Senate Committee on Appropriations consulted widely with the leadership of the committee and other critical stakeholders.

“More significantly, it met and deliberated with the Hon. Minister of Budget and Economic Planning, Senator Atiku Bagudu, and deliberated on the scope of the bill as well as its source of funding the projects.

“Subsequently, the committee processed the bill together with its House counterpart, in line with relevant rules of legislative practice and procedures.”

Adeola said the committee observed the need to provide the government equity component of the Renewed Hope Infrastructure Projects and other critical projects to be undertaken across the country and other recurrent expenditure requirements, like the provision for the new minimum wage, among others, which necessitated the request for the amendment of the 2024 Appropriation Act.

He said the additional expenditure contained in the amendment bill would be financed by the one-time windfall tax on banks’ foreign exchange profits for the year 2023, as approved by the National Assembly.

The committee recommended the authorization and issuance from the Consolidated Revenue Fund of the Federation, the sum of N35,055,536,770,218

Adeola said N1,742, 786,788,150 would be for Statutory Transfers, N8,270,960,606,831 for Debt Service, and 11,268,513,380,853 for Recurrent (Non-Debt) Expenditure.

He added that the sum of N13,773,275,994,384 would be for contribution to the Development Fund for Capital Expenditure for the year ending on December 31, 2024

None of the senators expressed objection to the bill and the senate dissolved to the Committee of Supply to discuss the clause-by-clause consideration of the bill.

In the sectoral consideration, under recurrent expenditure component of the budget, contingency recurrent had the highest vote of N2.536 trillion, followed by the Ministry of Defence, which had the sum of N1.308 trillion proposed for it.

Others included Ministry of Police Affairs, N869.120billion; Ministry of Education, N857billion; Ministry of Health and Social Welfare, N667.577billion; and National Social Investment Programme Agency, N200billion.

Under the capital expenditure component, the Ministry of Works had the highest projected sum of N1 404 trillion, followed by Ministry of Agriculture and Food Security with projected sum of N1.334 trillion.

Others were Ministry of Health and Social Welfare, N486.456 billion; Ministry of Education, N431.829 billion; Ministry of Finance N353.949 billion; Ministry of Power, N264.265 billion; Aids and Grants funded projects, N685.632 billion; Contingency (capital) N200 billion, and Zonal Intervention Projects N100 billion.

NASS Passes Finance Act Amendment Bill

Equally, on Tuesday, the National Assembly passed the Finance Act targeted at the funds, which accrued to Nigerian banks since the commencement of the new forex regime in the country.

The federal legislature said the implementation would take effect from when the forex regime started during the administration of President Bola Tinubu.

The federal government recommended the sharing of the windfall at 50-50, but the National Assembly approved a sharing formula of 70-30 per cent in favour of the federation.

The passage followed the adoption of the report of the National Assembly Joint Committee on Finance chaired by the duo of Senator Sani Musa and Hon. James Faleke.

The joint committee observed that the banks enjoyed windfall as a result of the exchange rate unification policy of the federal government.

The panel stated that the windfall was as a result of forex allocation to selected commercial banks.

The policy, the report added, did not permit the use of windfall for dividend payments.

The joint panel recommended that the application of the provisions of Section 30 of the Principal Act should take effect from January 1, 2023. It stated that the levy shall be 70 per cent on the realised profits from all exchange transactions of banks.

The report stated, “Any bank that fails to pay the windfall profit levy to the FIRS has not executed the deferred payment agreement by 31st December, 2023, shall be liable to pay the windfall levy withheld or not remitted in addition to a fine of 10 per cent of the levy withheld or not remitted per annum and interest at the prevailing Central Bank of Nigeria minimum discount rate.”

FG Injects N1trn into Manufacturing Sector

In another development, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, on Tuesday, said the federal government had injected funds amounting to N1 trillion into the manufacturing sector as incentives within the last one year.

Edun spoke at a meeting with the National Assembly Joint Committee on Finance over the 50 per cent tax on banks’ foreign exchange windfall.

The Tuesday public hearing of the panel was in continuation of the Finance Act (Amendment) Bill 2024 deliberations.

At the meeting, also, was Chairman of the Federal Inland Revenue Service (FIRS), Mr. Zacch Adedeji, who declared that accelerated stabilisation fund focused, among others, on series of legacy projects geared towards putting in place infrastructure to make the sector more viable.

The minister, in his response to requests by members of the committee that the manufacturing sector should be considered as a beneficiary of the proposed tax on banks’ foreign exchange profits (windfall tax), said the sector had already been taken care of.

He said, “There is expenditure of N1 trillion in terms of incentives to the manufacturing sector to help them with the high cost of production.

“In addition, under the Accelerated Stabilisation and Advancement Plan, which is a six-month plan for emergency economic, fiscal, and corporate sectoral actions in order to help, in particular, the manufacturing sector, there is low interest funding coming for the manufacturing sector.”

In his presentation to the joint committee chaired by Senator Sani Musa (APC Niger East), Adedeji said the proposed one-time windfall tax was geared towards redistribution of wealth, which, according to him, would be beneficial to the various sectors.

He explained that strategic programmes of the Tinibu government were targeted at reinvigorating the manufacturing sector.

According to the FIRS chairman, “Accelerated stabilisation funds focusing on helping the manufacturing sector are already being doled out aside legacy projects, strategically targeted at making the sector more vibrant and viable.

“Some of these strategic projects that would, in terms of infrastructure, reinvigorate the sector are the Badagry-Sokoto Highway, which would make journey from Badagry to Sokoto 11 hours. Also, the Lagos-Calabar Coasal Highway is another strategic road infrastructural project that will bring about the required connectivity for reinvigoration of the manufacturing sector.

“The plan of President Bola Tinubu on the economy, manufacturing sector and development, generally, is very robust.”

The sharing percentage from the one-time windfall tax between the federal government and the banks was, however, not agreed upon before the minister, the FIRS boss, and representatives of the governor of Central Bank of Nigeria (CBN) were excused from the meeting.

Tinubu had in an executive bill forwarded for approval by both chambers of the National Assembly proposed 50 per cent sharing formula for both parties, which some members of the committees suggested for upward review.