The Senate through its Committee on Finance has urged the Federal Government to revert to old payment system for contractors as against the current centralized system which has led to indebtedness to many contractors even on projects executed in 2024.
The committee also sought for replacement of the envelope budgeting system with the priority or performance based budgeting system to ensure the flow of cash in the economy.
The Chairman, Senate Committee on Finance, Senator Sani Musa representing Niger East made the call during interactive session with the economic management team of the Federal Government led by the Minister of Finance and Coordinating Minister of Economy, Mr Wale Edun.
Senator Musa who put the economic team on their toes in his opening remarks at the critical interactive session, told them that realities on ground based on feedbacks gotten from submissions made by heads of the various MDAs during budget defence sessions show that the impact of the economy is not felt by ordinary Nigerians.
According to Senator Musa, the economic team need to collaborate with the National Assembly for way out which he said requires the replacement of current operational systems.
” Specifically, based on submissions made by heads of various agencies during the ongoing budget defence sessions, the envelope system of budgeting has failed and needs to be replaced by priority based model.
“The incremental allocation model has outlived its usefulness. It promotes routine expenditure expansion rather than strategic prioritisation.
Senator Musa regretted that the centralized system of payment has led to many contractors remaining unpaid for projects already executed, stressing that should be replaced with the old system which allows the various MDAs pay contractors for jobs executed promptly.
“If by December, we cannot assess ourselves realistically, then the system is failing. We must return to a disciplined budget cycle where one fiscal year ends before another begins”, he said .
In their separate remarks , all the members of the committee toed the line of the Chairman, Senator Musa by admonishing the economic team to sit up for better budget planning and implementation as well as prompt payments of contractors.
In their responses, the economic team , assured the committee and by extension, Nigerians that the outlook for 2026 is very positive for the N58.472trillion proposed budget in terms of implementation .
The Minister of Finance, Mr Wale Edun explained that the #152 trillion budget profile the country current has, was not accumulated by borrowings alone.
“Currently, government debt in Naira terms, is 152 trillion Naira. About 30 trillion Naira came from Ways and Means inherited by this government and N9trillion incurred from exchange rate adjustment.
“So virtually half of that debt is made up of adjustments. It is not additional borrowing.
Additional borrowing since 2023 is in the 20 trillion range.
Mr Edun, maintained that going forward prioritization will start with the MDAs bringing forward growth-enhancing projects which the Economic Management Team will review those projects before President Bola Tinubu would decide financing base on priorities, particularly for capital projects.