National Assembly Complex
• Jonathan presents 2013 Budget today
By Onwuka Nzeshi
The House of Representatives Tuesday passed the 2013-2015 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper, pegging the oil benchmark at $80 per barrel. The executive had proposed a benchmark price of $75 per barrel in the document sent to the National Assembly.
Crude oil production level has been projected to remain at 2.526mbpd for 2013; 2.610mbpd for 2014 and 2.648mbpd for 2015. However, the currency exchange rate is to remain at N160 to $1 for the period under review.
The raising of the benchmark and alterations of other parameters in the document followed the consideration and adoption of the report of the Joint House Committee on Finance, Legislative Budget and Research, National Planning and Economic Development as well as Loans, Aids and Debt, which scrutinised the document.
With the adoption of the recommendations in the MTEF report, the coast is now clear for President Goodluck Jonathan to present the 2013 Appropriation Bill before a Joint Session of the National Assembly today.
Already, the House has commenced preparations to host the joint session as it passed a resolution pursuant to Order XIX, Rule 217 to admit the president, his entourage as well as members of the Senate into the Green Chambers for the joint session scheduled for 10 am.
The increase in the oil benchmark price is expected to jack up oil and gas revenue from N7.3 trillion to N7.9 trillion in 2013. Similarly, it is expected that revenue from oil and gas will rise to N8.1 trillion in 2014 and N8.3trillion in 2015.
The $5 increase in the oil benchmark will also increase the Federal Government's share of revenue from N3.9 trillion to N4.9 trillion in 2013.
The House has also slashed the deficit portion of the budget from N1.3 trillion to N663.324 billion, while internal borrowing should be reduced from N727.19 billion to N243.33 billion, representing 66 per cent decrease. This, the lawmakers said, would enhance access to domestic credit by the private sector.
The lawmakers warned that since the MTEF document did not make provision for any foreign borrowing, any additional foreign loan during the period must either be approved by the National Assembly or such loans will be at the lenders’ risk.
“Government must aspire to exhibit more transparency and prudence in the management of the economy, especially given the gains to be achieved in the medium term. Government should increase funding for frontier exploration services to increase the national crude oil reserve and government and its agencies must comply fully with the Fiscal Responsibility Act,” the report of the House joint committee that considered the 2013-2015 MTEF and Fiscal Strategy Paper said.
Chairman, House Committee on Finance, Hon. Abdulmumin Jibrin, who gave a synopsis of the report before it was considered by the Committee of the Whole, observed that the gloomy picture painted by the executive arm of government on the volatility in the global oil market and fears that crude oil prices might crash within the period under review was not realistic.
He accused the executive of deliberately misleading the public on the issue of oil price and an appropriate benchmark.
In the presentation, Jibrin said apart from increasing the oil benchmark, the revenue target for the Nigeria Customs Service (NCS) should be increased from N914.366 billion to over N1trillion so as to raise the volume of non-oil revenue.
He explained that the target for the Federal Inland Revenue Service (FIRS) and the Federal Government Independent Revenue (FGNIR) should be retained as proposed in the document submitted by the executive.
The expected increase in the Federal Government's revenue, the report said, should translate to increased capital budget and an avenue for government to address the huge infrastructure deficit facing the country.
“Increased revenue generation should lead to decreased budget deficit and increased capital budget for critical infrastructure development. Decreased internal borrowing will increase private sector contribution to production, employment generation and wealth creation,” the report said.
The joint committee observed that there was need to plug all leakages relating to oil production such as pipeline vandalism and crude oil theft as well as the acquisition of metering devices at the oil production points and export terminals to check abuses.
The report said that the sustenance of peace in the Niger Delta should be given priority attention in order to guarantee uninterrupted production of crude oil.
On its own part, the National Assembly, through the committees on Finance of both the Senate and the House, was urged to aggressively engage the revenue collecting agencies in order to meet their medium term revenue projections.
Jonathan had presented the 2013-2015 MTEF to the National Assembly on September 18, in line with the Fiscal Responsibility Act 2007.
The House deliberated on the MTEF on September 27 and assigned the document to the Joint House Committee on Finance, Legislative Budget and Research, National Planning and Economic Development as well as Loans, Aids and Debt for further scrutiny.
Section 11 of the Fiscal Responsibility Act requires the Federal Government to prepare and lay before the National Assembly for their consideration, an MTEF for the next three years and approve with such modifications as the National Assembly may deem fit.
The report of the joint committee had inputs from the National Assembly Budget and Research Office (NABRO), which collated the opinions of stakeholders such as the Federal Ministry of Finance, Department of Petroleum Resources (DPR), Nigerian National Petroleum Corporation (NNPC), Office of the Accountant General of the Federation (OAGF), Bureau for Public Enterprises (BPE) and the Federal Inland Revenue Service.