Security Budget: A Move to Proper Security Spending?

Proshare

Tuesday, June 15, 2021 / 02:38 PM / by CSL Research / Header Image Credit: Aso Rock Villa 

 

The Federal Executive Council (FEC) at its recent meeting presided over by President Muhammadu Buhari approved the supplementary budget estimate of N895.8bn for the remaining period of 2021. According to the Minister of Finance, Budget and National Planning, the appropriation bill is specifically provided for the purchase of additional Covid-19 vaccines and military equipment. Furthermore, she stated that the government earmarked the sum of N770.6bn for defence spending, N83.6bn in respect of vaccines, N1.7bn for the Nigeria comprehensive AIDS programme and N40bn contingency provisions to meet the needs for allowances in the health and education sectors and other wage-related issues.

 

In addition, the Minister highlighted that a major part of the budget estimate (N722.5bn for the capital component of security expenditure) will be financed via the domestic market while the remaining N173.3bn be sourced through World Bank existing loans and special reserve levy accounts. In recent times, the country has faced an all-time high level of insecurity affecting economic activities and weighing heavily on domestic food production. The insecurity induced disruptions to the food supply chain have caused a significant hike in food prices across the country.

 

Despite the increased security votes for funding security services across states in the country, the lack of transparency in security expenditure has yielded limited results and remain riddled with controversies. Without a doubt, there is a need to tighten the country's security situation considering current realities, which if not urgently addressed, may have devastating effects on long-term economic stability. However, we are concerned about the proper and efficient use of these funds.

 

The additional borrowings to fund the supplementary budget is expected to mount pressure on the country's debt level (Q1 2021: N33.10tn) and further worsen the debt service to revenue ratio, which is currently estimated at c.70%. With 81% of the budget expected to be financed by domestic borrowing, this supports further fixed income yield accretion.

 

Proshare Nigeria Pvt. Ltd.


Kindly share and stay connected with us on our platforms HERE

You can also subscribe to our NEWSLETTER 


Proshare Nigeria Pvt. Ltd.

 

Related News

  1. President Buhari Requests for NASS Resolution for N2.343trn New Capital Raising
  2. 2021 Budget: FG Asked to Block Loopholes And Investigate 314 Duplicated Projects
  3. BudgIT Highlights Corruption Loopholes in the Budget Process, Calls for Urgent Budget Reforms
  4. 2021 National Budget - KPMG Review and Implementation Notes
  5. Budget Shortfalls and Revenue Underperformance
  6. DMO Provides Clarification on the N2.2trn Debt Service Provision in the 2018 Appropriation Act
  7. Budget and National Strategy: Leverage and Synergy Potentials
  8. Lagos State Budget 2021: Rekindling Hope, Riding Expectations
  9. 2021 Budget to Focus on Security, Human Capital Development and Infrastructure - Zainab Ahmed
  10. President Signs the Appropriation Bill, 2021 and Finance Bill, 2020

 

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP