By Jeph Ajobaju, Chief Copy Editor
Senators on Wednesday approved N257,183,671,694.71 as budget for the Nigeria Customs Service (NCS) for the 2021 financial year and another $2.6 billion loan request to finance priority projects.
The approval for the NCS followed consideration of a report by the Committee on Customs, Excise and Tariffs.
Committee Chairman Francis Alimikhena (APC, Edo North) said N99,719,722,681.71 out of the amount budgeted for the NCS is for Personnel Cost; N19,530,769,000 (Overhead); and N137,933,180,013 (Capital Cost).
The committee increased the NCS revenue target from N1,465,345,719,428 to N1,678,715,061,014.
Alimikhena said NCS revenue target is pegged at N1.465 trillion in 2021, comprising of N1.267 trillion for federation account and N197.996 billion for non-federation account.
Factors that informed the upward review include expansion of excisable items, excise duties of carbonated drinks; tariff review on vehicles; re-opening of border; and projected increase on collectible duty of imports.
Expected revenue is from 7 per cent cost of collection in 2021, projected at N111,573,991,091; 2 per cent VAT share of NCS (N7,500,000,000); 60 per cent share of CISS (N47,007,935,827); and Retained Earnings for Ongoing Projects, 2020 (N91,101,744,776.51).
Priority projects
The Senate approved $2.6 billion out of the $5.5 billion external borrowing request sent to the National Assembly (NASS) by President Muhammadu Buhari in May last year.
The approval came after the Upper Chamber considered a report by the Committee on Local and Foreign Debts during plenary.
According to Local and Foreign Debt Committee Chairman, Clifford Ordia (PDP, Edo Central), €995 million will finance priority projects of the federal government and $1.5 billion disbursed to the 36 states to finance critical projects.
Up to $1.5 billion will be sourced from the World Bank; €671 million from the Export-Import Bank of Brazil; and €324 million from the Deutsche Bank of Germany.
The tenor/moratorium of the loan to be sought from the World Bank is 25 years at an interest rate of 2.45 per cent per annum.
That from the Export-Import Bank of Brazil is for 15 years at an interest rate of 2.935 per cent; and the loan from the Deutsche Bank of Germany for seven years at 2.87 per cent interest rate.
Buhari in a letter dated May 19, 2020 sought NASS approval to secure $5.513 billion foreign loan to finance deficits in the 2020 budget.
He explained that the loan would be sourced from the International Monetary Fund (MF), the World Bank, African Development Bank (ADB), Export, Import Bank of Brazil and the African Export, Import Bank.
Buhari said out of the total $5.513 billion loan, $3.4 billion will be sourced from the IMF; $1.5 billion from the World Bank; $500 million from the ADB; and $113 million from the Islamic Development Bank.
Ordia disclosed that €995 million will finance priority projects to address the impact of the COVID-19 pandemic and improve Nigeria’s food security through the mechanisation of agriculture and agro processing.
He said six assembly plants, one in each political zone, have been identified and would be rehabilitated to assemble completely knocked down (CKD) mechanisation farm machinery and equipment imported from Brazil.
He added that the loan will help deliver technological package to small holder farmers for a fee through the establishment of service centres in each of the 774 councils nationwide, owned and run by private entities.
