NASS Roundup: Tinubu’s loan request, single term for president, other stories from Reps

President Tinubu wrote to the lawmakers requesting their approval to borrow an additional ₦ $1.7 trillion ($2.209 billion) to finance the 2024 budget.

Tinubu’s Loan Request

After a two-week break, members of the House of Representatives returned to work on Tuesday. Why the lawmakers decided to embark on a recess in the middle of the usually busy third quarter remains puzzling.

To underscore how busy the quarter typically is, by the time plenary commenced, three letters from the president were awaiting them. With less than six weeks to the end of the year, the lawmakers are expected to focus on the 2025 budget, which is anticipated to arrive shortly.

However,  upon resumption, the lawmakers received a letter from President Bola Tinubu requesting their approval to borrow an additional ₦1.7 trillion to finance the 2024 budget. The loan, equivalent to approximately $2.209 billion, is to be sourced through the issuance of Eurobonds in the open market.

In the letter read by Speaker Abbas Tajudeen, the president outlined three major sources being considered for the loan. The first option, he explained, is to raise $2.209 billion through the issuance of Eurobonds in the International Capital Market (ICM). He noted that “Nigeria has been a regular issuer in the ICM, having raised $16.92 billion, out of which $15.12 billion is still outstanding.”

According to Mr Tinubu, the second option involves a debut Sovereign Sukuk of up to $500 million in the ICM, with credit enhancement from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).

The final option is bridge finance or syndicated loans facilitated by international book runners and joint lead managers.

The president stated that Citigroup Global Markets Ltd, Goldman Sachs, JP Morgan, and Standard Chartered have been appointed through an open competitive bidding process to advise on the issuance of Eurobonds if necessary. He added that “this option will only be used if, for any reason, the issuance of Eurobonds is delayed due to market conditions and there is an urgent need for funds.”

The question remains: why is the government seeking a fresh loan to fund the deficit in the 2024 budget, which will expire on 31 December? Does the government plan to extend the capital components of the current budget beyond 2024?

Budget extensions have become a culture under this administration. The capital component of the 2023 budget is currently running alongside the 2023 supplementary budget.

Regardless, the Senate has since approved the loan request.

Also MTEF/FSP

Another letter from the president concerned the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The MTEF is a three-year rolling plan used as a framework for drafting the annual budget. According to the Fiscal Responsibility Act, the president is required to present this document to the National Assembly at least four months before the end of the year.

However, in violation of the Act, Mr Tinubu submitted the plan less than six weeks before the year’s end. In October, the House gave him a two-week ultimatum to submit the MTEF, but the president ignored the deadline.

Section 11(1)(b) of the Act states: “The Federal Government, after consultation with the States, shall, not later than six months from the commencement of this Act, cause to be prepared and laid before the National Assembly for their consideration a Medium-Term Expenditure Framework for the next three financial years; and thereafter, not later than four months before the commencement of the next financial year, cause to be prepared a Medium-Term Expenditure Framework for the next three financial years.”

No single term for president

On Thursday, the lawmakers unanimously rejected a constitutional amendment bill seeking to eliminate the option of two terms for presidents and governors.

The bill, sponsored by Ikenga Ugochinyere and others, was dismissed by the lawmakers before the sponsor could even lead a debate on it.

After the rejection, Mr Ugochinyere told journalists that he would consider reintroducing the bill.

Concerns about Tax Bills

Outside the chamber, the lawmakers discussed four tax bills with Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), and Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal and Tax Reforms.

The interactive session was organised by the House to address concerns about the bills.

Messrs Oyedele and Adedeji addressed the lawmakers, emphasising the necessity of the reforms.

“The tax system lacks proper structure. We have obsolete laws, which we are still amending. We have laws, but we are not respecting the laws,” he said.

Mr Oyedele continued, “We have about 60 official tax laws in Nigeria. In contrast, other countries have fewer than 10. The solution to our problems cannot be the introduction of more taxes. Instead, we must eliminate multiple taxes and maximise collection. As high as the official tax count is, the unofficial ones are even more numerous.”

The next few weeks will be critical in the Green Chamber.