Thursday brief: Lawmakers pass 2023 budget but problems abound
+ Gretha Thunberg has written the tweet of the year
Good morning.
For the penultimate edition of the newsletter this year, we take a look at the 2023 budget and Nigeria’s money-printing problems. And, yes, that Gretha Thunberg tweet is just right.
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Lawmakers pass 2023 budget but problems abound
The National Assembly on Wednesday passed the 2023 budget bill, increasing it from the proposed N20.51 trillion to N21.82 trillion.
The lawmakers said the N1.3 trillion increase was due to additional funding earmarked for the National Population Commission and the Independent National Electoral Commission ahead of the census and general elections scheduled for 2023.
The Nigerian Army, Navy, Nigeria Police Force, and ministries of Agriculture, Health, Aviation, and Science & Technology also got reasonable increases, Punch Newspaper reported.
Although they retained other parameters as proposed by President Muhammadu Buhari, the lawmakers increased the oil price benchmark from $70 per barrel to $75.
Meanwhile, a rowdy session ensued as the senate considered a request by the president to approve N23.7 trillion, spent without the approval of the National Assembly.
The source of the N23.7 trillion is the CBN’s ways and means advances, which is an euphemism for money printing.
Usually, ways and means advances are used for short-term or emergency financing, but the Buhari administration proposed to convert its excess use of the facility to 40-year bonds at 9% interest.
Of the N23.7 trillion, the government had already spent N22.7 trillion and was seeking an additional N1 trillion.
Senators Betty Apiafi and Thompson Sekibo argued that the request was not constitutional, and voting on the ways and means conversion request was put on hold.
However, the Senate approved that N1 trillion from the ways and means advances be used to fund the N819 billion supplementary budget for 2022 already passed by the Senate.
Inflation: Depending excessively on the central bank to print money for government finance can lead to “distortions or surges in monetary base leading to adverse effect on domestic prices and exchange rates i.e macroeconomic instability because of excess liquidity that has been injected into the economy.”
My take: Borrowing is not the problem; borrowing without improved efficiency and productivity is. My favourite example is South Korea, which borrowed heavily to develop its manufacturing and industrial capacity in the 70s and 80s. That led to record inflation but also significant economic growth. Unfortunately for Nigeria, it doesn’t look like we are borrowing for the right things.'
Related: The National Assembly has also passed the Finance Bill which proposes key reforms to specific taxation, customs, excise, and fiscal laws.
What else is happening?
G5 Governors: The PDP is considering a sanction against Rivers state governor, Nyesom Wike, and four of his colleagues who are threatening to endorse a presidential candidate outside of the party.
Obituary: The president of Ohanaeze Ndigbo, George Obiozor is dead. “A renowned academic, an exceptional diplomat and statesman and a tenacious patriot, Prof George Obiozor passed on recently after a brief illness,” Imo state governor, Hope Uzodimma, said.
Bolanle Raheem: The inspector-general of police, Usman Baba, has recommended the suspension of Drambi Vandi, the officer who shot lawyer and entrepreneur, Bolanle Raheem. The police said it is still waiting for a detailed report on the incident.
ASUU angst: The House of Representatives said it did not promise striking university lecturers that the government would pay them for months they were off duty. The lecturers disagree.
Obasanjo’s endorsement: The Labour party said the former president is backing Peter Obi for president in 2023.
More time: The Senate has asked the central bank to extend its deadline for the phase-out of old notes from January 31 to June 30.
Minimum wage: Labour unions say the cost of living, inflation rate, and devaluation rate must be considered as the government plans an increase in wages for civil servants.
Climate desk
Year in review: Loss and damage at COP27, devastating floods across Nigeria . . . TheCable has published a recap of the top climate stories of 2022.
Intervention: Some communities in Ebony lack access to water due to climate change, one lawmaker said after donating 20 units of boreholes.
Heatwave: The year 2022 is said to be the warmest on record for the United Kingdom, according to experts.
No to climate bullies: This Gretha Thunberg quote-tweet to Andrew Tate is in contention for the best Twitter clap-back of all time.
And that’s it for today. Tomorrow, we will round up for the year!