• Proposes $65 oil benchmark
• Pegs exchange rate at N165
BARRING any unforeseen circumstance, the Presidency will today present the 2015 budget proposal before the two arms of the National Assembly.
In a letter addressed to the President of the Senate, David Mark and the Speaker of the House of Representatives, Aminu Waziri Tambuwal, President Goodluck Jonathan informed the duo that the Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo-Iweala would be representing the Presidency in the exercise scheduled for today at 11:00 a.m.
Meanwhile, Tambuwal yesterday declined a motion which sought to stall the admission of the Finance minister into the hallowed chamber for the purpose of laying the 2015 budget estimates on behalf of the president.
The letter to the Senate reads: “In consonance with the provision of Section 81 (1) of the Constitution of the Federal Republic of Nigeria, 1999 as amended, I write to request that the distinguished Senate grant the honourable minister of Finance the slot of 11.00 a.m. to enable her lay before you the 2015 budget estimates.”
The President, however, acknowledged the fact that the budget estimates are being transmitted. Enforce the passage of the 2015-2017 Medium Term Expenditure Framework (MTEF).
According to the letter, the situation could be blamed on the global decline in oil price which had necessitated delay in arriving at a harmonised oil benchmark by the National Assembly.
“I am cognizant of the fact that the budget estimates are being presented before the passage of the 2015-2017 Medium Term Expenditure Framework (MTEF). This is due to the extra-ordinary global circumstances that confronted us in the latter quarter of the 2014 fiscal year.
“As you know, the first MTEF with a budget benchmark of $78 a barrel was submitted to the National Assembly on September 30, 2014 and discussion on the MTEF and budget construction based on those estimated began with the relevant committees of the National Assembly.
“However, shortly after the first submission, oil prices began to fall precipitously leading to a revision of the oil benchmark price in the MTEF to $73 per barrel which was resubmitted to the National Assembly on November 18, 2014.
“Following this, the decision of OPEC at its meeting in Vienna on November 27, 2014 not to cut production to support the price led to further precipitous fall in the oil price to below $70 per barrel. This led, one more time to another downward revision of the benchmark price to $65 per barrel and a revised MTEF which was again submitted to you on December 2, 2014.
“The uncertainty surrounding the global price of crude oil and its continuous fall has occasioned delays in both the submission of a final MTEF and budget estimates, and we thus request your kind consideration of both of these items together in view of our national budget calendar.
‘‘We would like to confirm that having submitted these budget estimates, we are not proposing further revision of the oil benchmark price. Though prices continue to be extremely volatile at present and to trend further downwards, there are indications based on the price intelligence we have at this time that prices may range between US$65 - US$70 a barrel in 2015.
“Nevertheless, we would like to emphasise that there is no guarantee where oil prices are concerned due to numerous underlying global geo-political factors that are outside our control and unpredictable. Should prices fall below the range, the country would have to make further adjustments.
‘‘We hope that despite these circumstances, the distinguished senators will give kind and due consideration to the budget estimates in sufficient time for us to implement the 2015 budget starting early next year,” the President stated.
This is the third time 2015 budget was being transmitted to the National Assembly. The new estimate of N3,357.96 trillion is predicated on N65 per barrel oil benchmark and at N165 to a dollar.
To this effect, the President also forwarded a reversed 2015-2017 Medium Term Expenditure Framework to the Senate for consideration.
Jonathan noted in the letter that “given further developments in the international oil market which have necessitated further revisions, amendments have been made to some parameters as well as to some fiscal estimates in the MTEF.
“I hereby forward copies of the revised 2015-2017 MTEF for the kind consideration of distinguished members of the Senate and hope that it would be considered and approved expeditiously in order to bring the 2015 Federal Government of Nigeria budget preparation process to quick closure,” he added.
Recall that before now, the budget was reduced from the initial proposal of N4.82 trillion to N4.66 trillion.
Out of the proposed estimates, recurrent expenditure (non-debt) is put at N2,622.42 trillion as against N2468.83 trillion of 2014. Out of this figure, Personnel Costs (MDAs) has N1,801.00 trillion, Overheads, N216.56 billion, CRF Pension of N228.81 billion as well as other Service Wide Votes of N307,05 billion.
The sub-total of Capital Expenditure is pegged at N627.16 billion against N1,552.99 proposed for the current year. There is however FGN Budget (Net of SURE-P of N4,357.96 proposed for 2015.
The Capital Expenditure is further decided into MDAs Capital Expenditure of N380.70 billion, capital expenditure of statutory transfers of N144.42 billion as well as SURE-P Capital Expenditure of N102.03 billion.
Meanwhile, domestic debt service is put at N89461 billion while foreign debt service is to gulp N48.39 billion.
And in an apparent move to forestall any unforeseen development during the presentation on the floor, Okonjo-Iweala yesterday curiously paid a visit to Tambuwal and both held a closed-door meeting which lasted for more than one hour before the commencement of yesterday’s plenary session of the chamber.
Relationship between the lower legislative House of the National Assembly and the executive arm had been at its lowest ebb, especially in recent times with the invasion of the parliament on November 20 by the police, when Tambuwal and his loyalists were barred from gaining access to the National Assembly, suggesting members, especially from the opposition parties would seek their pound of flesh during the budget presentation.
Indications that the fears might not be out of place emerged on the floor yesterday, when Deputy Majority Leader of the House, Leo Ogor in a motion seeking the approval that the minister be admitted into the chamber today based on President Jonathan’s request earlier was resisted by the Minority Leader, Femi Gbajabiamila.
Ogor had while citing Section 81(1) on the requirements of the President to cause to be laid, the budget estimates at every fiscal year, said the House approved the 11 a.m. slot as requested by the President.
Specifically, Tambuwal had at the resumption of plenary session yesterday after the just concluded party primaries read President Jonathan’s letter seeking the leave of the parliament to lay the 2015 estimates for consideration.
Consequently, Ogor moved the motion to enable for the suspension of the House rules in order to admit the Minister of Finance to lay the budget on behalf of the president.
However, a point of order raised by Gbajabiamila kicked against the decision, saying if allowed, it would set precedence in the parliament against international best practices.
Gbajabiamila argued that hitherto, budget estimates were laid on the floor of the chamber by the President personally and wondered why the House chose to circumvent the established practice and admit a delegate.
He cautioned the House against the move which, according to him, would set a precedence that will impinge on the practice and customs of the Nigerian parliament.
But Ogor dismissed Gbajabiamila’s submission, saying the argument against the President’s letter was inconsequential until the constitution is amended. He cited Section 81 (1) of the Nigerian constitution which, according to him, clearly defined how the budget estimates could be laid before the parliament.
Ruling on the matter, the Speaker appealed to members to allow the speedy consideration of the budget, saying that the Chamber was already in receipt of the reviewed MTEF which was being studied by the Committee on Finance and will thereafter be approved by the House.
He craved the understanding of the members in view of the time already lost by the late receipt of the budget.