• Members denounce N11tr collectible revenue
• Seek oil price benchmark increase from $45 to $50 per barrel
• Mull scrapping of VOA, NOA, other ‘wasteful agencies’
Debate on the general principles of the 2018 budget proposal began on a heated note at the Senate yesterday, with some members describing the fiscal document as “unrealistic, ” “fictional” and “imaginary.”Many senators who contributed to the debate across party lines declared that the N11 trillion collectible revenue proposed could not be met and called for increase in oil price benchmark from $45 to $50 per barrel.
Senator Enyinnaya Abaribe (PDP, Abia State) was unsparing in his assessment of the proposal, declaring it “dead on arrival”. Joshua Lidani (PDP, Gombe State) called it “wishful thinking”. For Ben Murray Bruce (PDP, Bayelsa), it was merely “a budget of active imagination”.
Senate leader, Ahmed Lawan, however found one of Abaribe’s expressions uncomfortable and sought leave of the chamber to mandate the senator to withdraw the word.“You cannot describe as ‘fictitious’ the budget presented by Mr. President to a joint session of the National Assembly,” said Lawan.
But instead of renouncing the term, Abaribe said if ‘fictitious’ was unacceptable, “I withdraw the word and say that it is totally imaginary.”
Senator Abubakar Yusuf (APC, Taraba North) regretted that instead of the presidency to make agencies responsible for non-oil revenue generation brace up, it was projecting unrealisable revenue collections, as witnessed this year where only N155b was realised out of projected N807b independent revenue generation.
Deputy whip, Francis Alimekhena (APC, Edo North), also faulted the proposal. “Year in, year out, we are faced with bloated budget estimates that cannot achieve performance implementation beyond the 15 per cent it achieved this year,” he said.
He noted that since the price of crude oil in the international market is now above $60, the oil price benchmark should be jerked up from the proposed $45 to $50, as a way of maximising the projected N6.387 trillion oil revenue, since the projected N5.597 trillion non-oil revenue is not realisable.
The lawmakers spoke as the upper chamber kick-started consideration of the general principles and second reading of the 2018 budget as contained in a bill for an act to authorise issue of N8,612,236,953,214 from the Consolidated Revenue Fund.
Of the amount, N456,458,654,074 is for statutory transfers; N2,233,835,365,699 is for debt service; N3,494,277,820,219 is for recurrent (non-debt) expenditure; while the sum of N2,427,665,113,222 is for contribution to the development fund for capital expenditure for the year ending December 31, 2018.
Lawan, who gave an overview of the budget, said that in keeping with the administration’s policy, 30.8 per cent (N2,652 trillion) of the aggregate expenditure was allocated to capital budget.The Yobe North lawmaker said that the fiscal operations would result in a deficit of N2,005 trillion or 1.77 per cent GDP. He reminded his colleagues that the deficit would be partly financed by new borrowing estimated at N1.699 trillion.
While 50 per cent of the borrowing will be sourced externally, the balance will be sourced domestically. The balance of the deficit of N306 billion is to be financed from the proceeds of privatisation of some non-oil assets by the Bureau of Public Enterprises (BPE).
Lawan also reminded his colleagues that the budget was predicated on the following assumptions: oil price benchmark $45 per barrel; oil production estimate of 2.3 million barrel per day; exchange rate of N305/US$; real GDP growth of 3.4 per cent and inflation rate of 12.4 per cent.
Hardly had Lawan concluded his overview when Abaribe took the floor.“The 2018 budget is designed to consolidate on the achievement of 2016, 2017 budgets. What was done in 2017, when less than 15 per cent of that budget was released? Nothing. That is why I call it fictitious. Nothing was done in 2017. That is fact that we all know.
“As at last week, the total receivable government got was one tenth of what was stated publicly. Instead of the budget in 2017 of more than N800 billion to be received, what was received was N150 billion. In what sense will this 2018 budget be predicated on an assumption that the facts have already been destroyed? You are assuming N11 trillion, yet you are getting less than N1 trilion.
“This is imaginary. We beg this government to be very specific in the indications of the assumptions underlining this budget. The assumptions are totally wrong and totally off the mark,” said Abaribe.
Lidani said the performance of the 2017 budget especially as it related to capital performance was abysmal. “It is expected that by the end of the year, only 50 per cent of the capital fund would have been released. It is not certain that amount would be released. So, we end up having a budget that has performed below expectation. Unless we get the 2017 budget analysed, we will be building the 2018 budget on a very weak foundation.”
He added: “Non-oil revenue fell by 74 per cent, which means only 36 per cent was realised from it. This is very disturbing and alarming, especially when you consider the fact that the 2018 budget is predicated heavily on non-oil revenue.
“The non-oil revenue is supposed to contribute N4.165 trillion, which is almost about 50 per cent of the N8.6 trillion budget. If something goes wrong and we don’t realise this N4.165 trillion, it means the budget will be as good as dead. If we don’t get the fundamentals right, we are going to have a budget that will perform below expectation.”
Bruce said: “If you look at the budget from 1960 to the present, you have agencies that were designed for 1960, agencies that were designed for the Nigerian civil war, agencies that were designed to suit some certain conditions in life. 60 years later, those agencies still exist in the budget. If you look at the budget, you will see that some agencies get recurrent expenditure, they pay salaries, they get houses, computers, cars, but they have no money to do any work. Some agencies are so bloated. It defies logic but these agencies exist. So, we have 2.4 million people consuming 60 per cent of the recurrent expenditure of Nigeria. It doesn’t make any sense.”
He added: “I called President Obasanjo on phone two days ago and he said to me that the National Orientation Agency was necessary when we had no political parties. What is the value of the National Orientation Agency in today’s world for instance? Yet billions of naira is spent in it. Let us look at agencies that make no sense and sell them to staff. FRCN has 8,000 workers. Sell it to them. Sell NTA to the staff. Voice of Nigeria… Who listens to Voice of Nigeria? Sell it. If the staff want to buy, let them buy it. Set up a cooperative, like Awolowo did, sell it to them. If we spend 71 per cent on recurrent expenditure, we will never get out of this predicament.”
Senator Gbenga Ashafa noted that the 2018 budget could not be discussed effectively without reviewing the performance of previous ones. He said the major problem of the country’s budgets was poor funding. He said for instance only N700 million out of N11.4 billion had been released from the budget of the Ministry of Transportation.
Deputy senate president, Ike Ekweremadu, who chaired the session, noted: “Without revenue, we will have no money to do expenditure. We must point out, in the course of the debate, how we will reduce deficit. Ben Bruce has told us that some government agencies that should not be in existence anymore including the Voice of Nigeria (VON), which nobody is listening to. We need to point out some of these MDAs that are of no consequence and are adding no value, so that we don’t keep spending money on them. That way, we will be able to reduce the ratio between capital and the recurrent and, of course, reduce deficit.
“I hope government will listen to such exposure and be able to do away with such agencies. If the government fails to remove those agencies from our budget, we have a responsibility to Nigerians to bring bills in order to repeal the laws that set them up and stop waste of our resources.”
from Nairaland http://ift.tt/2ij16dg