Chuks Okocha And Bature Umar
21 November 2002
Abuja — House passes N90 bn supplementary budget, financial crimes and money laundering bills
President Olusegun Obasanjo yesterday presented a N765.132 billion Appropriation Bill for the 2003 fiscal year to the National Assembly. The bill is made up of N508.788 billion recurrent expenditure and N256.363 billion capital expenditure.
The recurrent expenditure N343,343 billion will be devoted to personnel cost while the rest N256.363 will be for overhead cost.
Addressing a session of the National Assembly while presenting the Appropriation Bill yesterday the President said the total collectible revenue for the fiscal year 2003 is estimated at N1, 819.0124 billion.
Of this, the total revenue from oil is N1, 120.1789 billion while the appropriation bill is predicated on US $21 a barrel, with OPEC quota for the year at 1.7880 million barrels per day.
In addition, the President said there is an expected condensate production of 100,000 barrels a day. The exchange rate was pegged at N126 per US 1.00.
For non oil revenue, Obasanjo said that N635.8335 billion is expected to be collected. He also said that N196 billion is to be collected from the Federal Government Indepen-dent Revenue Generation efforts, while N176.7496 is to be derived from import duties.
The budget estimates shows that Valued Added Tax (VAT) is expected to yield N113 billion, while other sources of non-oil revenue will include Company Income Tax, Levies, Excise Duties, Education Tax, Fees and FIRS Education Tax and Loot Recovery.
The President explained that after various charges, the total revenue available to the Federation in 2003 is estimated at N1, 174.9065 billion.
On the consolidated revenue fund for 2003, he said after Federal Government's contribution to the Niger Delta Development Com-mission (NDDC), the balance of the federal retained revenue is projected at N675.325 billion, stating "this amount represents the federal government revenue in the consolidated revenue fund to finance recurrent and capital expenditures of the federal government."
A breakdown of the sectoral allocations shows that Ministry of Works and Housing has the lion share of N49 billion. Others include:
Power and Steel (NEPA) - capital allocation of N30.5 billion
Agriculture - N9.874 billion
Solid Mineral Development - N 3.058 billion
Education - N13.981 billion
Health - N19.5 billion
The President promised that in 2003 government would seek to put in place a measure that will help ensure budgetary discipline with a view to establishing a fiscal rule that stabilizes the level of both capital and recurrent expenditures.
He also stated that for government to be able to contain the recurrent expenditure, it would seek to create a civil service that is smaller, highly skilled, motivated and more productive.
On external debt, the President said government will continue to make debt services payments, but explained that the share of government revenue will be in line with the share of expenditures on key social amenities and services."
Obasanjo, while canvassing for a public and private sector partnership, reiterated that a clearly robust private sector activity is the answer to the problems of unemployment and poverty in the country.
And to avoid the boom-bust economic cycle historically experienced in the country and preserve better quality of life for the people, he added, the nation must support a rapid economic diversification agenda.
The government, he further revealed, had recently unveiled a framework for economic growth and development that identifies five primary tracks of production, which include agriculture and agro-business, solid minerals development, other manufacturing including ICT, crude oil and natural gas.
Obasanjo also listed 15 principles, which he said, would guide the government's economic management in 2003, and they include among others the placement of continued emphasis on allocative efficiency by ensuring value for money in Federal Government expenditure and ensuring that budget execution follows rules of fiscal transparency at all levels.
However, Speaker of the House of Representatives, Ghali Umar Na'Abba, who presided over the joint session in the absence of Senate President Anyim Pius Anyim, who traveled out of the country yesterday for medical treatment, described the budget as "long in delivery", stating "It is the prayer of the National Assembly that it will be long also in implementation."
Senate Appropriation Commit-tee chairman, Udoma Udo Udoma said though the budget came in rather late, some of its aspects are realistic, promising that the National Assembly would make sure that the budget when passed is supported by the revenue to enable the executive implement everything.
Continuing, he said "The 21 dollar crude oil price is realistic, the N126 exchange rate I always say is realistic, the 1.7 million barrels crude oil production I think is realistic."
On the condensate, which the President said would stand at 1000 barrels, Udoma said is a bit small and wanted to know why the nation cannot produce more condensate, adding "That is one area which is not part of OPEC quota and if we can produce more condensate, I think we can get more revenue."
Senator Daniel Saror said the allocations to agriculture which stands at N9.8 billion, Solid Minerals development N3billion, and the N13 billion for education are still inadequate in view of the gravity of their demand which far surpasses what they were given in the estimates.
Senator Saidu Dansadau said the problem with the Federal Government was not that of lack of budget, but its mode of implementation.
Chairman of the House Committee on Appropriation, Hon. Barau Jibrin described the appropriation bill as modest, but said the major problem remains in its implementation.
The former chairman of the House Committee on Finance, Hon. Sanusi Daggash described the budget estimate as very conservative, but realistic. He said that parts of money to be spent last year may have been spent this year, explaining that major projects may suffer cash flow and that contractual commitments may not be met.
Another member, Hon. Greg Egu from Imo state said "the entire money going to recurrent expenditure means that little would be done to improve the welfare of the people as stated in the votes for capital expenditure."
He said that it was not fair for government to allocate only N9 billion for the agricultural sector, while canvassing that the National Assembly should review and restructure the budget.
In his contribution, the chairman of the House Committee on Information, Hon. Farouk Lawan, said that the budget appears to be modest in the light of shortfall of revenue earnings of government and experience in the 2002 Appropriation. He said that the budget showed the need to shift emphasis on non-oil revenue earning.
The Deputy House Leader, Hon. Mao Ohuabunwa said the budget captured all the problems of 2002 and making Nigerians look for a better 2003. He said that the budget estimate almost tallied with the expected revenue, saying that it is a step in maintaining a balanced budget for 2003.
Also yesterday, the House approved N89.551 billion as the 2002 supplementary budget. This consists of N43.121 for recurrent expenditure and N46.430 billion for capital projects.
Of this amount, the Independent National Electoral Commission (INEC) got N28.171 billion to be spent as follows:
Voters' registration exercise/ Election preparation - N6.917 billion
Ballot Materials - N20.954 billion
Assistance to registered political parties for observation of voters' registration - N300 million
Ministry of Defence - N868 million
Ministry of Health for the purchase of vaccines N890.82 million
Ministry of Water Resources (Kano River Project) - N1.5 billion
Ministry of Internal Affairs (National Identity Card Project) - N10 billion
Nigeria Police Force - N5 billion
Of the recurrent expenditure, N24 billion was approved for military pension, N12.5 billion for the upkeep of foreign missions and N200 million as take off grant for the Police Service Commission.
The House also passed three money laundering and financial crime bills. The United States government had last week warned that Nigeria risks economic sanctions if the bills on financial crimes were not passed into law.
According to the bills, the Governor of Central Bank (CBN) is empowered to freeze accounts of convicts of financial crimes. Also, all convicts of financial crimes and drugs related offences are to forfeit their properties to the government.
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