The Senate has vowed not to rubber stamp the 2017 Budget to be presented by President Muhammadu Buhari to the Joint Session of the National Assembly today in consideration of the Medium Term Expenditure Framework (MTEF) which is due to be discussed tomorrow.
The document was approved for presentation to the National Assembly on November 30 and the ceremony is expected to hold at 10am.
The position of the Senate was made known yesterday by its Leader, Mohammed Ali Ndume, who represented the Senate President, Dr. Abuba kar Bukola Saraki, when a civil society group, Centre for Social Justice (CSJ), led by Barrister Eze Onyekpere, submitted a report on MTEF to the Senate. The Senate Leader, who justified his earlier comments that the MTEF was empty, said gone were the days when the National Assembly would rubber stamp any document.
He insisted that the legislature would always analyse all documents to ensure that the interest of the citizens were protected. According to the Senate Leader, “We are Nigerians, we represent Nigerians, and this is MTEF for Nigerians and not for the World Bank.
And in the Senate, we have experts. So, when they brought the MTEF, we said that we will subject it to critical analyses and not rubber stamp it and then it was in the media that the National Assembly should be blamed for not passing the budget in time, I responded by telling them they brought empty documents. “We are professionals here. We are grateful to centres like you that are non-governmental.
You are independent. This is what we need, not bringing reports from World Bank or from any expert from diaspora that come to play on the intelligence of Nigerians. “We want to prove to those outside the executive that we are Nigerians that have constitutional responsibility to look at what affects Nigerians with inputs from centres like you that will address the challenges that we have in this country and proffer solutions to them by experts who are Nigerians, not people from outside that will be working with the economic theories that are alien to us.
“So, the Senate will not rubber stamp the MTEF, but will subject it to critical analyses.” Meanwhile, the House of Representatives has adopted the 2017 to 2019 MTEF and Fiscal Strategy Paper (FSP). The House pegged the exchange rate of naira to a dollar at 350 as against the N290 recommended by the executive, while it concurred on the oil benchmark of $42.50 dollar per barrel with a proposed daily production of 2.2 million barrels per day. The House fixed the exchange rate of naira to a dollar at N350 as against the N290 recommended by the executive.
The House also concurred on the oil benchmark of $42.50 per barrel with a proposed daily production of 2.2 million barrels per day.
Consequently, the House has mandated its Joint Committees on Finance, Appropriation, National Planning and Economic Development, Legislative Budget and Research and Aids, Loans and Debt Management to further scrutinise the document. President Muhammadu Buhari had, on October 4, forwarded a request to the House for approval of the 2017 to 2019 MTEF and FSP.
Moving the motion for the adoption of the MTEF/ FSP, House leader, Hon. Femi Gbajabiamila, said some analysts forecasts that the shortage of forex supply may push exchange rate to as high as N350 to the dollar in the official and N500 in the parallel markets, recommending that “the budgeted exchange rate of N290 per dollar is unrealistic and should be moved to N350 to encourage foreign capital inflows.”
On crude oil, he submitted that “the proposed oil benchmark is $42.50 per barrel with a daily production of 2.2 million barrels per day.
Both seem to be realistic as oil is currently trading at about $50 per barrel.” He explained that “with current price level of over $50 per barrel and Nigeria’s current output at 1.9m bpd, the estimates are conservative enough, especially with OPEC output freeze last week.”
He maintained that the revenue target of N4.169 trillion and total expenditure of N6.687 trillion are audacious to move the country out of recession, but are achievable only on “effective combination of strong fiscal and monetary tools by government, increasing the tax base in the country, curtailing militancy in the Niger Delta and injecting back looted funds, diversification of the country’s revenue sources, controlled government spending and strong anti-leakage and anti-corruption drives.”
But less than 24 hours to present the 2017 Appropriation Bill to a joint session of the National Assembly, the executive arm of government brought a revised version of the 2017 MTEF and FSP to the Senate for consideration. Minister of Budget and National Planning, Udoma Udo Udoma, made the presentation at a meeting convened by the Joint Committees on Appropriations, Finance and National Planning, to consider the revised MTEF and the FSP.
The minister revealed Federal Government’s plans to explore new streams of revenues to fund the 2017 budget, as part of efforts to get the country out of the current economic recession.
He said the Federal Government would issue new oil licences, review the current joint venture arrangements with oil companies, review marginal oil fields and mount pressure on revenue generating agencies to surpass expected targets.
In a similar vein, the Federal Government also stated that the 2017 budget oil benchmark would be pegged at $42.50. This is a departure from $38 per barrel, which was used for 2016 budget. The daily oil production volume for 2017 was retained at 2.2 million barrel while exchange rate was put at $305 to a naira.
The new exchange rate is significantly higher than that of 2016. The 2016 budget exchange rate was pegged at $197 to a naira. Udoma also said that a total of N10 trillion was being targeted by the Federal Government as revenue during the 2017 fiscal year.
Out of this amount, about N5 trillion is expected to be generated from the sale of crude oil. According to him, nonoil revenues will rake in about N5.06 trillion. These revenues are expected to come from corporate and company taxes, Nigeria Liquefied Natural Gas (NLNG), Stamp Duties, Capital Gains Tax, Value Added Tax (VAT), Customs, Excise, fees, surcharges on luxury items, special levies and Federal Government independent revenue. The 2017 budget, which was initially pegged at N6.6866 trillion, has also been revised upward to N7.298 trillion. In 2016, the Federal Government submitted N6.059 proposal to the National Assembly.
Out of this, the Federal Government is expected to expend N1.488 trillion in servicing domestic debts. In 2016 budget, the Federal Government earmarked N1.307 trillion for debt servicing. On foreign debt, the Federal Government will spend N175.882 billion.
It spent N54.480 billion on foreign debt servicing in the 2016 budget. On capital expenditures, the Federal Government budgeted N2.058 trillion. In the 2016 budget, N1.587 was earmarked by the Federal Government for capital projects. Udoma further said that recurrent expenditures would gulp N2.629 trillion. About N1.748 was budgeted for the same purpose in the 2016 Appropriation Act. The Federal Government also intends to borrow a total of N2.321 trillion.
Out of this, N1.253 will be sourced locally, while N1.067 will be realised from foreign sources. In the 2016 budget, N1.182 trillion was reportedly borrowed locally, while N635.8 billion was sourced through foreign borrowing