Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala

By Chuks Okocha

The presidency is seeking the support of governors to break the impasse over the appropriate oil benchmark on which to base revenue projections for the 2013 budget.

Both the executive and the legislative arms of government have been at loggerheads over the oil benchmark that should be adopted for next year’s budget.

While the presidency is insisting on $75 per barrel benchmark as contained in the Appropriation Bill submitted to the National Assembly on October 10, the House of Representatives is not ready to shift grounds on $80 per barrel, as contained in the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper the lower legislature passed on October 9.

Before reaching the $75 figure, the executive had consulted with the governors leading to a shift from $72 to $75 as demanded by the governors.

On its part, the Senate, which passed the MTEF on October 16, fixed the oil benchmark at $78 per barrel.

The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, in defending the executive’s position, had contended that the benchmark was based on “an econometric module that estimates five and 10-year moving averages”.

She cited the budget benchmarks of some countries, including Algeria, which is pegged at $37; Venezuela, $50; Qatar, $55; Kuwait, $60; Saudi Arabia, $60; Oman, $75; and Angola, $77, saying, “We don’t see any country with $80 benchmark.”

However, the House had countered her position, saying by leaving the oil benchmark at $80 per barrel, more money would be realised that would enable the Federal Government to reduce the 2013 budget deficit.

Amid the simmering disagreement between the two arms of government, THISDAY learnt that the presidency is reaching out to governors to persuade the House to implement their pre-budget agreement of $75 per barrel.

Though, the budget bill has passed the second reading in the two chambers of the National Assembly, the decision by the presidency to seek the governors’ intervention is aimed at speeding up the passage of the budget and avoiding the gridlock that affected passage of the 2012 budget.

Sources confirmed to THISDAY that the governors are expected to use their influence with the lawmakers from their states to shift position in the interest of the nation’s economy.

“Some of us considered as arrowheads of the $80 benchmark have been reported to our governors so that they will call us to order; so that we will toe the line of the presidency on the budget,” a lawmaker said.

He said the governor of his state used the opportunity of the Sallah break to discuss with him and his colleagues on the possibility of soft-pedalling on the benchmark and for them to see the presidency’s viewpoint.

“During the Sallah break, my governor met three of us from the National Assembly and implored us on the need to cooperate with the presidency in the quick passage of the budget and the need to avoid further acrimony.

“But we made it clear to him that whatever position taken by the National Assembly was not personal, but a decision taken of which we are part and parcel,” he added.

He explained that his other colleagues in the National Assembly also confirmed that their governors equally reached out to them on facilitating the smooth passage of the 2013 budget.

Another source also told THISDAY that before the Sallah break, some senior officials of the presidency hosted the lawmakers to a meeting where efforts were made to convince them on the need to approve the $75 oil benchmark for the budget.

According to the source, “The aides of the president informed the meeting of the National Assembly that the benchmark of $75 for the budget was in the overall interest of the economy because of the perilous nature of the global economy and unstable nature of the price of the crude oil.”

THISDAY gathered that the meeting between the presidency and some members of the National Assembly agreed that if the issue of the benchmark between the Senate and the House was not resolved on time, it would affect the passage of the budget.

“There is the need for a quick resolution of the benchmark between the House and Senate because if allowed to go on, it will create the problem of reconciliation. 

“At the end of the day, it will come to which of the benchmarks of the two chambers of the National Assembly would be adopted and this will bring the problem of egos.

“This is why the presidency is using all avenues to ensure that the matter is resolved and hence the involvement of the PDP governors to talk to some members of the National Assembly from their states.

“The PDP is in the majority in the House of Representatives and the Senate. So we should use this as an advantage,” another source in the presidency said.