Senate: Nigeria to Run 2015 Budget in Deficit • Bill scales second reading¨ After much lamentation over the 2015 budget, the Appropriation Bill for the current fiscal year scaled second reading on the floor of the Senate on Wednesday with senators describing the estimates as a deficit budget whose content is grossly exaggerated. Leading debate on the bill, Senate Leader, Victor Ndoma-Egba, said the budget of N4.357 trillion comprised N2.6 trillion as recurrent expenditure, N627 billion capital expenditure, N943 billion for debt service and N411 billion for statutory transfers. He also said the document was predicated on $65 oil benchmark, projected oil production of 2.2782 million barrels per day and an exchange rate of N165 to $1. Ndoma-Egba said the budget would focus on job creation through increasing economic diversification and leakages, roads, power, gas and aviation. He added that the 2015 budget is a framework that will consolidate and add impetus to the transformation agenda of the federal government with the intention to promote economic growth, job creation, poverty reduction and service delivery. In his submission, Senate Committee Chairman on Finance, Senator Ahmed Makarfi, called for extreme caution in the effort to appropriate the budget, noting that the benchmark for the budget had not been determined. He argued that budget could not be appropriated without first determining the benchmark. While recalling that the capital expenditure contained in the 2014 budget was N1.4 trillion when compared with N627 billion in the current estimates, Makarfi described the estimates as austerity budget and insisted that the current economic downturn is a wake-up call on Nigeria to stop relying on oil which is highly volatile and look for other areas of getting money. Makarfi also described the projected N165 to $1 as exchange rate as unrealistic, saying it is out of tune with reality since a dollar is currently exchanged for over N180 as he suggested the need to block wastages by ensuring that ministries, departments and agencies (MDAs) declare their revenues with a view to ensuring that non-oil revenues come into government treasuries. Also speaking, Senator Olubunmi Adetumbi (Ekiti North) argued that there is currently no money to finance the 2015 budget being considered, emphasising that the components of the budget are grossly exaggerated. He added that with the projected $65 benchmark, the budget has already begun to run in deficit of $28 even when it has not been passed. Adetumbi also argued that the nation was shooting itself in the leg by exaggerating oil benchmark when it is common knowledge that oil now sells at $47 per barrel, remarking that the current trend implies that there would be no money at all to fund any capital project next year except by borrowing. He therefore advocated the need to compel the executive to withdraw the estimates and submit a fresh one that will take into consideration the current circumstances. But Senator Ita Enang described the bill as a budget of celebration, saying he was celebrating the fall of oil in the global market because it would force Nigeria to explore other sources of revenue. According to him, organisations such as Nigeria Maritime Safety and Administration (NIMASA), among others, generate huge revenues and are even richer than the Presidency, alleging that the agencies are flouting the law, which authorises them to retain 20 per cent of their revenues and remit 80 per cent to government coffers. He also argued that if the Nigerian National Petroleum Corporation (NNPC), which behaves as Nigeria remits all funds as required into the consolidated revenue fund (CRF), there would be enough money to fund the economy despite the downturn. He cited countries in Europe and other continents which do not have oil and yet are extremely rich because they harness taxation and deploy it to grow their economies. Enang further lamented that the excess crude account (ECA) has been largely depleted despite the rise of oil price to as high as $118 last year before its eventual fall, saying both the National Assembly and federal government were guilty because they failed to heed his campaign that money in ECA should not be spent except as authorised by the Appropriation Act. The senator said whereas this position was incorporated into the 2014 Appropriation Bill, the federal government later connived with the National Assembly to delete the provision, lamenting that if the provision had been sustained, the problem threatening the nation today would have been largely averted as he described the spending of ECA fund as stealing. He also said given the drastic fall in oil price, the federal government should bring down the pump price of fuel before the organised labour decides to go on strike. There is no point allowing the CBN, NIMASA and Nigeria Communications Commission (NCC) to generate money and keep it without putting it in the revenue account. I am celebrating the fall of oil so that we can go back to see the amount of money generated by these agencies and determine the 20 per cent they should spend and the 80 per cent they should transmit to the federation account. We should go back to these instruments. How do countries that do not produce oil survive? It is through money they generate internally. Where is the excess crude account? The benchmark for 2014 budget was $77.50 per barrel but oil sold for over $118 per barrel. Where is the excess crude share of the federal government? We are guilty because I raised an alarm that money from the excess crude account should not be expended without the consent of the National Assembly. My submission is that since we signed the 2014 Appropriation Act, there has not been an application for supplementary budget. The President should therefore fund the 2015 budget with the reserve from the excess crude amount, Enang said. In his remark, Deputy Senate President, Ike Ekweremadu, who presided over the session, described the economic downturn as a wake-up call on Nigeria to ensure that other sources of revenue are factored into budget projection. He charged the committees handling the appropriation to capture other revenue sources in the budget as he recalled that Nigeria had survived a similar challenge in the past but lamented that no lesson was learnt from the previous experience. While citing nations such as Norway, which he said ran their economies well without oil, Ekweremadu said it had become imperative for the executive to devise extra ways such as taxation to fund annual budgets and simultaneously ensure strict application of the principle of fiscal discipline. The Senate later referred the document to committees on finance and appropriation with the mandate to report back to the house in four weeks. Meanwhile, the Senate yesterday adjourned plenary to February 17 to enable members concentrate on their re-election campaigns.
Posted on: Fri, 16 Jan 2015 11:08:58 +0000
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