The Director of Production, Defence Headquarters, Air Vice Marshal M. A. Yakubu, spoke at a public hearing on the Armed Forces Support Trust Fund Bill organised by the House of Representatives Committee on Defence. He said the sources of funding specified in the Bill would be inadequate to tackle the problem.
The Bill seeks alternative sources of funding for the Armed Forces to improve the software, hardware and training.
Air Vice-Marshal Yakubu said the projection for funding in the Bill is estimated at N100 billion per year.
When established, the Support Trust Fund is expected to draw funds from one per cent of the total money accruing to the Federation Account; 0.5 per cent of profit made from the investment of the National Sovereign Wealth Fund (NSWF) by the Nigerian Sovereign Investment, one per cent of Value Added Tax (VAT) remitted to the Consolidated Revenue Fund (CRF) as well as any take-off grant and special intervention fund as may be provided by the Federal Government, states and local governments of the Federation.
It will also draw funds from one per cent of the air ticket contract, charter and cargo sales charge to be collected by the airlines and paid to the support fund; aids, grant and all assistance from international agencies, nongovernmental organizations and the private sectors; and money derived from investments made by the Support Fund.
“Every year, how do we get our budget, capital budget specifically? An arbitrary envelope is simply thrown at us. It does not take into consideration what we need and what to do to meet those needs. Now that is one.
“Secondly, we are all aware of the exchange rate fluctuations. We have run into problems were even working with approved budget envelopes, we have gone ahead to sign contracts for the procurement of equipment and suddenly the exchange rate collapses on us and we are unable to fund it. We have found ourselves every year running back to the Federal government for interventions. This is not sustainable.
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“The next thing I want to talk about is the cost of equipment. I am talking from the point of view of an Air Force officer who has been involved in the procurement of equipment. Let me give you an example. The procurement of the 12 Super Tucano Aircraft cost approximately $500 million. Now, this is a package.
“The United States would not sell equipment to you and just give you the equipment there. There must be a support package for a minimum of three years. There must be training and other things. That total package came to that amount. How many years would it take you to budget?
“The maximum we have received from 2017 to date in terms of capital allocation for the Air Force was about N44 billion per annum. Convert that at the current exchange rate. How many years do you need to gather 500 million dollars to buy just 12 aircraft?” he said.
He went on: “We should be able to raise a minimum of $2 billion per annum for the next three years for a start. Subsequently, we can begin to taper down the percentages. But for a start, we need a bulk sum because many of these manufacturers of equipment require a 100 per cent down payment to start production.
“So you cannot sign a contract with the US manufacturers and pay 15 per cent mobilisation as required by the Procurement Act. Nobody would look at you. Their terms must be followed,” he said.
In his presentation, Director General Defence Research and Development Bureau, Air Vice Marshall U. P. Uzezi, urged that research and development be taken more seriously so that required military hardware can be produced locally.
A member of the House of Representatives Committee on Defence, Hon Princess Miriam Odinaka Ohuoha, urged that the Bill should also accommodate better welfare for men and officers of the Armed Forces.
House of Representatives Speaker Femi Gbajabiamila said the security challenges in the country made it imperative for additional funding for the nation’s armed forces.
“Nigeria is at war against insurgency, terrorism, kidnapping and all manner of insecurity; hence the need to uplift the resources available to our Armed Services to enable them to procure the best tools to help win this war. So, what we seek to do in this Bill is not new or unique to us as a nation.
“The solution to our security challenges requires asymmetric actions across many policy areas. This is what we have tried to do as the representatives of the people. The concept of a Trust fund already exists for the Nigerian Police.”
The Chairman of the House Committee on Defence, Jimi Benson, said no country adequately finances its Armed Forces solely through annual budgetary allocations, adding that developed countries like the United Kingdom, Poland, Russia, United States of America create alternative or additional sources of income to fund the activities of their Armed Forces.
“In 2020, while Nigeria spent only $2.6 billion on its military, Algeria, Morocco and South Africa expended $9.7 billion, $4.8 billion and $3.1 billion respectively to fund and equip their military.
“Coping with the modern security challenges being faced in Nigeria today is, no doubt, an enormous task that requires contemporary, robust, well-trained, well-equipped and efficient Armed Forces,” he said. (The Nation)
