Damilola Oyedele in Abuja
The House of Representatives has committed the 2017-2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to its Committees on Finance, Appropriations, National Planning and Economic Development, Legislative Budget and Research and Aids, Loans and Debt Management to scrutinise and make recommendations to it.
This was however after several of its members, including members of the ruling All Progressives Congress (APC) criticised the document, describing it as a badly prepared document, full of unrealistic projections and assumptions and not in tune with current realities in the country.
The Majority Leader of the House, Hon. Femi Gbajabimiala, who moved the motion, showered praise on the document, and noted that there might be a review of the revenue projection due to increase in oil prices.
The document, whose total expenditure is N6.68 trillion, is based on a benchmark of $42.50 per barrel of crude, is projected on 2.2 million barrels per day for oil production, foreign exchange rate of N290 to $1, Gross Domestic Product Growth rate of 3.02 per cent, and N4.1 trillion revenue.
Recurrent expenditure (non debt) is N2.56 trillion, N350 billion for special intervention, N1.7 trillion capital expenditure, N1.6 trillion for debt servicing, N370 billion for Statutory transfers.
Gbajabiamila noted that with the current price of oil at over $50 per barrel, and Nigeria’s current output of 1.9 million barrels per day, the estimates are conservative enough with OPEC output freeze.
According to the document, oil revenue is expected to contribute 32.91 per cent of the revenue in 2017, while non oil revenue would contribute 36.18 per cent.
Minority Leader, Hon. Leo Ogor, picked holes in the document, and said while the document presented figures on revenue projection and capital injection, it was not clear on where the money would be gotten from.
“This document is clearly based on assumptions, not reality. The first assumption is that our oil production is 2.2million bpd, when in the last five years, we have been averaging 1.8million bpd. The United States which was our bigger buyer, is now an exporter. The basis of our framework must be based on reality. This is armchair assumption, and not sustainable,” Ogor said.
He added that the government had not been able to implement the 2016 budget of N6.03 trillion.
“And now we are talking about a N7trillion budget, where would the money come from?,” Ogor queried, and also noted that the three per cent GDP projection is unrealistic as the GDP is currently in the negative.
He, however, noted that the document must be passed being a money bill, but urged the relevant committees to be thorough in their work.
Hon. Aminu Shehu Shagari (Sokoto APC) appealed to his colleagues to support the document, so as not to be perceived as “stumbling blocks.”
He, however, urged the President Muhammadu Buhari-led government to deploy all available options and resources to pursue sustainable peace in Nigeria.
“The government should invest strongly in peace in the next three years. Let there be peace in the Niger Delta, let there be peace in the North East, and from religious extremism threatening us,” Shagari said.
Hon. Kayode Oladele (Ogun APC) described the MTEF exchange rate of N290 to $1 as unsustainable, and added that several global bodies including the World Bank have predicted that there would be a fall in oil prices.
“We all know that the dollar stands between N460 and N480. The benchmark according to MTEF is $42.50, but looking at expert reports, including the World Bank, the projection is that prices would fall further. And there is no way we would achieve 2.2 million barrels per day, as production has been hampered by militancy,” he said.
The lawmaker however urged that the document be passed.
Similarly, Hon. Tajudeen Yusuf (Kogi PDP) said no economy is based on speculative productions, and also highlighted the issues with the different foreign exchange rates in the country.
Hon. Shehu Garba (Kaduna APC) described the performance level of the 2016 budget as low, as projections were not attained.
“When you are preparing a financial document, you must be critical…We have different forex rates with wide gaps; interbank rate and black market rate. What rate would an investor use? If you are bringing in your money, you would be told to bring it in at CBN (Central Bank of Nigeria) rate, but you cannot spend it at that rate in the country,” he said.
The Deputy Speaker, Yussuff Sulaimon Lasun, said the 2.2million bpd at $42.50 benchmarks are valid and realistic particularly as oil prices have risen to $55 per barrel.
“$55 is likely to be the price for the next three months at least, so these are realistic assumptions,” Lasun said and appealed to the lawmakers to support the government in its bid to diversify the economy.
“This government is trying very hard to diversify the economy, which is the only way out, and we have refused to do it for the past six years. Let us allow the present government to use whatever proceeds we have from oil to diversify our economy, so that when we come back in 2017 to discuss the 2018 budget, we would have other sectors contributing to the economy like agriculture,” he said.
“We would appeal to our brothers in the creeks to allow us go to three million barrels per day, which Nigeria has the capacity to do,” Lasun said.
Meanwhile, President Buhari would present the 2017 budget to a joint session of the National Assembly at 12 noon today, instead of 10a.m. as earlier scheduled.
The Speaker of the House, Yakubu Dogara, who announced the shift in time, said Buhari is scheduled to arrive from Gambia in the early hours of today.