ABUJA—THERE is a brewing showdown
between President Goodluck Jonathan and the Senate, as the latter has rejected
the president’s oil benchmark of $74 per barrel and instead, raised it up to
$76.50 per barrel.
The upper legislative chamber also
directed that details of the Subsidy Reinvestment and Empowerment Programme,
SURE-P, projects expected for execution in the 2014 budget be attached as
addendum to the annual budget estimates for approval by the National Assembly.
But unlike the above, it approved the
oil product daily oil production of 2.388mbpd, 2.5007mbpd and 2.5497mbpd for
2014, 2015 and 2016 respectively as proposed by the president.
File photo: Members of the Red Chamber
and President Jonathan
These formed parts of the
recommendations of the Senator Ahmed Makarfi’s led Senate Joint Committee on
Finance and Appropriations on the Medium Term Expenditure Framework, MTEF and
Fiscal Strategy Paper, FSP, which was passed yesterday, preparatory to next
Tuesday’s 2014 budget presentation by President Goodluck Jonathan before
the joint session of the National Assembly.
As seen in the MTEF and FSP, the 2014
Budget is predicated on crude oil production of 2.3883mbpd with a benchmark
price of $74pb and a projection of aggregate expenditure of N4.77 trillion of
which the capital expenditure is N1.45 trillion.
New borrowing of N572 billion projected
for 2014 would increase the total of local and foreign debt to N8.25 trillion
from N7.11 trillion in 2013. The status of bad loans absorbed by the Asset
Management Corporation of Nigeria, AMCON, was not stated, and the details of
the number of projects completed that have rate of returns were not also
available. The contingent liability of AMCON could be in trillions of naira.
The Senate also approved that a total
of N666.9 billion from the Excess Crude Account, ECA, be distributed to the
tiers of government as proposed by the executive just as it okayed augmentation
from the Excess Crude Account, should the projected crude production fall below
the budget, provided there are funds in the account.
The Green Chamber gave the president
the nod to peg Corporate Tax and VAT rate of 30 percent and 5 percent
respectively, just as it approved average exchange rate of N160 per dollar for
the next three years.
It urged the government to strengthen
and consolidate its fiscal strategy to narrow the gap between projected and
actual revenue for the period of 2014 to 2016 curtailing oil theft and
diversifying the economy to increase tax bases so as to increase tax revenue.
It noted that oil theft came into
prominence in 2012 with a daily loss of about 150,000 barrel per day,
regretting that by July 2013, the loss had risen to about 400,000 barrels per
day, saying government needed to take some drastic steps to halt the
development.
“Furthermore, government needs to work
seriously on some of the key macro-economic indicators such as the growth of
GDP and its impact on unemployment, inflation rates, interest rates, the status
of the Sinking Fund and Debt Sustainability Analysis of 2013 and 2014, the
alarming rate of uncompleted projects, debt profile and their status and
the future of AMCON equally of concern.
“If these issues are not effectively
looked into or controlled, the economic and infrastructural development
aspirations of the nation would remain a mirage.
“As can be observed, the key indices
contained in the current MTEF/FSP do not show significant improvement in terms
of their contributions to economic growth and development.
“Moreover, the continuous building up
of the nation’s external reserve above the internationally recognized standard
of three months national import, at the expense of the provision of critical
infrastructure whose multiplier effect on GDP would boost national development,
should not continue unchecked,” the Senate observed.
SURE-P projection for 2014 is the N180
billion annual allocation plus the N94.34 billion unspent in 2013, bringing the
total allocation for SURE-P in 2014 to N274.34 billion.
In his remark after the passage of the
2014-2016 MTEF and FSP, Senate President, David Mark, however, cautioned his
colleagues that discarding the report subjectively would imply rejection of the
document which he noted was instrumental to the Senate’s input in the consideration
of the much expected 2014 Appropriation Bill.
The Senate President admonished them to
avoid regional and party sentiments as the document in question affects the
economy of the nation.
He said: “We need a document that will
help us make our input when we consider the budget. That is what this paper is
all about. And it has given us all the highlights that we need when we are
making our own input into the budget. So if you say ‘reject this paper’, then,
you are saying ‘reject looking at this input when you are looking at the
budget’.
“So, there is no question of rejecting
the paper. It is a report from our own committee and it is saying that we
should look at these issues when considering the budget.
“If you are saying that when we are
looking at the budget, we should not look at the shortfall in oil production,
it is saying, ‘look at the shortfall in oil production, remedy it when you are
making your input’.
“It is not a matter of assumption. It
has looked at all the figures.”
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