Senate President, Ahmad Lawan has justified the need for the Federal Government to borrow funds, saying it is necessary for infrastructural development in the country.

He stated this on Tuesday at the Senate Chamber upon the resumption of the lawmakers from recess.

Lawan stated that funding the 2022 budget is based on significant borrowing, adding that the nation is caught between the devil and the deep blue sea.

The Senate President equally emphasised the need to construct and provide infrastructure in all parts of the country because infrastructure is needed for development.

While accepting the Federal Government cannot continue to borrow endlessly, he warned that it is imperative that we need to improve on the revenue to Gross Domestic Product (GDP) ratio.

“Distinguished Colleagues, funding of the 2022 Budget is predicated on significant borrowing. Our country is caught between the devil and the deep blue sea,” he said.

“Distinguished Colleagues, as we all know the oversight of the implementation of the Budget is a critical function of the National Assembly.

“We must therefore strategize on effective oversight of the implementation of the 2022 Budget. This is going to be the last budget that would be fully implemented for 12 months in the life of the Ninth Senate. We, therefore, need to supervise very closely.

“At about 8% Revenue to GDP ratio, our country is basically at 50% of what is required of the revenue to GDP of 15% for it to support any significant economic development.”

See the Senate President’s full speech below:

SPEECH BY THE PRESIDENT OF THE SENATE, DISTINGUISHED SENATOR AHMAD IBRAHIM LAWAN, PhD, CON, AT SENATE RESUMPTION, SENATE CHAMBER, NATIONAL ASSEMBLY COMPLEX, THREE ARMS ZONE, ASO ROCK, ABUJA, JANUARY 18TH , 2022

Protocol,

My Distinguished Colleagues, I welcome you back from our Christmas and New Year recess. I believe that the recess gave us the opportunity to celebrate the festivities with our families and loved ones.

My Distinguished Colleagues, before we went on the recess, we considered and passed the Appropriation Bill on 22nd of December, 2021. That was the third consecutive time to pass the annual appropriation bill before end of year.

The Bill was signed into law on 31st of December, 2021 by Mr President, to give the desired effect of starting the implementation of the Budget from January 2022.

Distinguished Colleagues, I once again commend the Senate, indeed the National Assembly and the Executive arm of Government for working tirelessly to maintain the instituted January to December budget cycle.

Distinguished Colleagues, as we all know the oversight of the implementation of the Budget is a critical function of the National Assembly. We must therefore strategize on effective oversight of the implementation of the 2022 Budget. This is going to be the last budget that would be fully implemented for 12 months in the life of the Ninth Senate. We, therefore, need to supervise very closely.

Distinguished Colleagues, funding of the 2022 Budget is predicated on significant borrowing. Our country is caught between the devil and the deep blue sea. We have to construct and provide infrastructure, in all parts of our country because infrastructure is needed for our nation to develop. However, we do not generate enough revenues to fund the provision of such infrastructure. Until more revenues are generated, the country has to borrow and also resort to other sources of funding our infrastructural development. But we cannot continue to borrow endlessly. It is imperative that we need to improve on the revenue to Gross Domestic Product (GDP) ratio. At about 8% Revenue to GDP ratio, our country is basically at 50% of what is required of the revenue to GDP of 15% for it to support any significant economic development.

Distinguished Colleagues, the Senate will develop a strategy of engagement with revenue-generating agencies on how to make them achieve their targets and generate more revenues in 2022. The Senate will ensure that we boost their revenue-generating drive with a view to reducing borrowing for the development of our much-needed infrastructure. This is a major challenge for our development and we need to treat as such.

Distinguished Colleagues, the Petroleum Industry Act(PIA) 2021 was enacted with a view to providing better investments climate for better performance by the Oil and Gas industry. The Senate therefore, need to seriously supervise the implementation of the PIA 2021. We must ensure that our country starts to benefit from the passage of the PIA.

Distinguished Colleagues, the Senate postponed discussions on the consideration of the response of Mr President on the Electoral Act 2010 Amendment Bill to enable us to consult with our counterparts in the House of Representatives and also consult with our Constituents. Like we all know, the Senate and indeed the National Assembly worked so hard on the Bill. Having consulted, the Senate will expeditiously look into the issue.

Distinguished Colleagues, the Security situation in our country is still dire. We must remain focused and determined to work with the Executive arm of government, and also continue to support our armed forces and security agencies. We must continue to prioritize the Security and welfare of our citizens as enshrined in your constitution nor despair.

I urge us not to be discouraged by the situation. We should make this year as the year for the final securing of our nation from the numerous security challenges.

Distinguished Colleagues, the review of the 1999 Constitution is a major plank of our Legislature Agenda. Our Committee on Review of the 1999 Constitution has done so much work so far. Working with their counter parts in the House of Representatives the report of the Committee will be presented to the Senate for consideration soon. The Senate will consider the report and the National Assembly will communicate to the State Houses of Assembly within the first quarter of this year.

Distinguished Colleagues, Political activities leading to 2023 general elections have already started. This Senate should continue to provide the support that Independent National Electoral Commission (INEC) needs for successful elections across the country.

Distinguished Colleagues, most of our colleagues will be running for various political offices in 2023. I wish all our distinguished colleagues easy victories and success at the polls.

In conclusion, I thank all our distinguished colleagues for remaining focused and firm in our determination to deliver service to our country.

Thank you for Listening.

May God bless the Federal of Nigeria. Amen.

I do not think people realize how important 2023 is.Let me explain.Last year Nigeria made: ₦970.3 Billion from oil. ₦1.6 Trillion from non-oil taxes [More revenue from this than oil]. ₦2.8 Trillion from a cumulative of other sources.

In total the country brought in ₦5.5 Trillion in revenue.Then it gets really crazy from here. Out of that ₦5.5 Trillion revenue, ₦4.2 Trillion was spent on servicing (repaying) debts from January to November.So what is left after paying debts is ₦1.3 Trillion.

Which, as a matter of fact; means that what is left after repaying what we owe is not enough to run the country because in the 2021 national budget, the nation needs to run on a total of ₦13.57 Trillion. So since we just have ₦1.3 trillion left, an extra ₦12.27trillion is needed.

Where do we get it? Yes, you guessed right - we borrow. In 2021 Nigeria spent ₦12.56 trillion - most of which were borrowed money spent on things that do not bring money back (salary, fuel subsidy, LOOTING, etc).

So if Nigeria was a man who makes ₦100k a month, he borrows ₦5 million every month to pay for light bill, and running of the house. See the picture now? Scary, isn’t it? The excess Crude oil account (which is like our savings) is almost empty. So not only does this man borrows like a crazy person

He has no SAVINGS for emergencies (like if his boss decides not to pay salary). Anyways, the finance minister thinks we are doing alright. That what we have is a revenue problem - and not a debt problem & if we make more we will be alright (this is why they are taxing everything)

Of course, she could be lying,but she maybe right too.
The rule is we should NEVER borrow more than 40% of our GDP. We are at 36.9%. 3.2% more & all the alarm bell goes off. Now imagine if our revenue keeps dropping, and the debt keeps increasing.

And one day - voom - 3.2% crossed! Then we will really have a debt problem.Since we currently borrow to pay salary, when the alarm goes off - further borrowing is a disaster: The Government will struggle to pay salary. (Which is scary considering that the Govt is the biggest employer of labour in Nigeria)

More Taxes will be imposed to raise money, Including tax of Goods which will increase the prices you pay on Foreign rice for example. Our currency will get futher devalued. Which means things will get even more expensive in the market.

This is the state of the nation. Yet the politicians still loot and take home fat salary. Imagine if we get the wrong President in 2023 again, who will not get these things fixed. Imagine the disaster if we push over that 3.2% ........