Hope for early passage of 2015 budget dashed

Hope for the early passage of the 2015 budget was yesterday dashed, as the Joint Committees on Finance and National Planning, Economic Affairs and Poverty Alleviation failed to submit the 2015-2017 Medium Term Expenditure Framework and Fiscal Strategy Paper.

This comes as Senate President David Mark on Tuesday tasked the National Assembly on realistic budget.

 

The 2007 Fiscal Responsibility Act stipulates that MTEF and FSP be approved by the National Assembly before consideration of the annual budget.

It further states that the budget proposal for the next fiscal year be presented before the National Assembly at least three months to the end of the year.

However, the N4.357 trillion Appropriation Bill was laid before lawmakers on December 17, 2014 by finance minister, Ngozi Okonjo-Iweala.

 

MTEF and FSP usually provide the basis for annual budget planning and consist of a macro-economic framework that indicates fiscal targets. The document also provides estimates on revenue and expenditure including government’s financial obligations in the medium term. It also spells out projected oil benchmark, foreign exchange and borrowing plan for the next fiscal year.

The first MTEF with a budget benchmark of $78 a barrel was submitted to the National Assembly by President Goodluck Jonathan on September 30, 2014.

However, shortly after the first submission oil prices fell, leading to further revision of the oil benchmark price in the MTEF to $73 per barrel which was resubmitted to the National Assembly on November 18, 2014.

However, the decision of the Organisation of Petroleum Exporting Countries (OPEC) not to cut oil production led to another downward revision of the benchmark price to $65 per barrel on December 2, 2014.

 

When the chairman, Joint Committees on Finance and National Planning, Economic Affairs and Poverty Alleviation, Ahmed Makarfi, was called upon on Tuesday by Senate leader, Victor Ndoma-Egba, to present his report, he told the red chamber that the revised 2015-2017 MTEF/FSP document was yet to be presented to his committee.

 

He, however, admitted that his committee was working on the two documents earlier submitted and there was a need to update their records with the latest version.

At this stage, Mark requested if he should order that the revised document be submitted to them on the floor but Ndoma-Egba counselled that for the sake of due process, it should be done formally.

The Senate president then ordered that the item be included in the order paper on Wednesday (today) so that it can be referred to the joint committee.

Earlier, welcoming senators from the Christmas and New Year holidays, the Senate president assured that the National Assembly is committed to the passage of the 2015 budget.

Unlike the assurance he gave when the finance minister laid the budget last year that Senate would debate on the bill in the first two days of resumption this year, Mark did not, however, give a specific period of when the budget would be debated.

 

“We must allow for a deliberate, meticulous and exhaustive debate of the estimates.

“I would like to reassure Nigerians that the National Assembly will work hard to ensure that the 2015 Appropriation Bill is passed in good time,” he stated.

According to him, once passed into law, they would employ their oversight instruments to insist on accountability, probity, transparency and efficiency in the implementation, monitoring and evaluation of the budget.

 

He assured that the seventh Senate would endeavour to pass the lingering Petroleum Industry Bill (PIB) into law.

While stressing that the PIB has a profound impact on the future direction of the nation’s economy, he said it is one of the legacies of the National Assembly when passed into law. “We are conscious of the concerns of various stakeholders (Nigerians and foreigners). It has taken long but we should do all we can to pass it. Although we have a critical and congested legislative timetable ahead, we must be thorough in our work”.

Commenting on the development, a financial expert, Emeka Ononamadu, said it was high time the MTEF was realigned in line with current realities, adding that this has become pertinent now that oil price has dropped to $48 per barrel at the international market.

While calling on Nigerians not to entertain fear, Ononamadu argued that it is better to pass the budget estimate late and do a meticulous job than hurriedly approve the document.

In a telephone interview with BusinessDay, he stated further that even without being passed, “Government is expected to spend certain levels of amount from the old budget for six months so that government cannot shut down”.

 

He added: “Given the changes in the world economy, particularly the oil price, other parameters that gave rise to the initial MTEF will have to be readjusted because you remember the fight between the presidency and the legislators over the oil pegging. Now that it has crashed to $48, it is a huge problem for the financial planners of this country. But from the international forecast of oil price in the next six months or one year, it is unlikely to hit $100 again or even $80. So, that puts Nigeria in a very serious crisis and danger.

“The MTEF needs to be realigned to suit the new oil price since oil accounts for over 80 percent of our national income. The other implication is that it is going to lead to a rush in the passage of the budget which will not be in the good interest of the country. But if the technocrats are working stronger and harder to earn their money they should be able to do a thorough job earlier than necessary because it is a statutory requirement for the passage of the budget”.

by OWEDE AGBAJILEKE