Kunle Aderinokun
15 July 2008
Abuja — Even when the grey areas of the 2008 budget are still being addressed, Finance Minister Shamsuddeen Usman disclosed yesterday that President Umaru Musa Yar'Adua would present the 2009 Appropriation bill to the National Assembly by the last quarter of this year.
The revelation came as the Minister of National Planning Commission Sanusi Daggash estimated that the nation had been losing a whopping $60 billion yearly ($5 billion monthly) in the past two years to pipeline vandalism, militancy and youth restiveness in the Niger Delta region as well as decaying oil facilities amongst others.
Usman, who spoke at the 2009-2011 Medium Term Sector Strategy (MTSS) Session yesterday in Abuja, said the 2009 Appropriation bill, which would be the immediate outcome of the three-year MTSS, had been designed "to ensure that there would be sufficient time for the National Assembly to rigorously review and deliberate upon President's budget proposals over the last quarter of 2008."
He expressed the hope that presidential assent would be given to the 2009 appropriation bill by the end of 2008, giving assurances of the government's commitment to fully cooperate with the National Assembly over this.
He said: "The MTSS, however, does not end with the signing into law of the 2009 Appropriation Bill. Given that our ongoing reforms aimed at moving away from incremental budgeting to a performance-based budget system, the MTSS will be the focal point for planning and prioritising future budgetary commitments anticipated under the 2010 and 2011 budget cycles.
"Our emphasis will increasingly be on ensuring greater result-orientation, improving the effectiveness and efficiency of the government's development initiatives and enhancing incentives for heightened stewardship and accountability in public expenditure management."
Usman explained that the 2009-2011 MTSS process had already begun with the review of existing budget commitments and the articulation of high level policy document relevant to the strategies of each sector.
The MTSS, he pointed out, was consequently derived from the harmonised development plan of NEEDS-2 and Yar'Adua's seven-point agenda.
The finance minister said the MTSS would "distil" the key priority programmes, projects and other initiatives that ministries, departments and agencies (MDAs) intend to implement over the medium-term horizon.
"The final MTSS reports for each sector will form the fulcrum for the realisation of the developmental milestones necessary in the next three years to achieve the medium-term and long-term goals under the harmonised NEEDS-2 and seven -point agenda," he stated.
Yar'Adua had two weeks ago forwarded the 2008 budget amendment bill to the Senate and House of Representatives for passage into law.
The bill came about three months after a compromise was reached between the President and National Assembly to forward an appropriation amendment bill that would address the reservations of the Executive on the 2008 budget.
The amendment bill is seeking to cut the budget passed and forwarded by the National Assembly to Yar'Adua for presidential assent on March 12, this year, by N181 billion.
The budget, as passed on March 12, consequent upon the review and harmonisation by an ad hoc committee of the Senate and House was N2.748 trillion, down from N2.898 trillion, which the assembly originally increased it to.
The original budget presented to the National Assembly by Yar'Adua on November 8, 2007 stood at N2.3 trillion.
Meanwhile, while fielding questions from Finance correspondents after the opening session, Daggash said despite the fact that Nigeria had the capacity to produce 3.2 million barrels of oil per day; factors challenging the oil production had reduced it to only 2 million, below the OPEC ceiling of 2.5 million barrels per day.
He said: "The calculation is a simple arithmetic. You have today your theoretical produce ability of about 3.3million barrel of petroleum or crude oil. You have an OPEC ceiling of 2.5, if you have 3 million capacity, they will allow you to produce it. Now based on the 2.5 and we put our budget on 2.4 effectively we are producing an average of about 2 million. So, if you subtract that from 3.3 that is over a million barrel. They have technical reasons ranging from infrastructure, asset and all those things.
"So, about 300 to 400 thousand barrels are down because they need replacement, maintenance and so on. This is ongoing but shortens because of bombers, flow stations attacks.
"In short, since two years ago, the attack by some of the militants; if you even take a million barrel and they will be doing the maintenance on time and creating the necessary security and so on. If you multiply it by $140 dollars per barrel that is $140million of revenue cash flow per day, which the Federal Government, states get 85 to 89 per cent by virtue of sharing, the PPT and the rest.
"So you can imagine the kind of flow you are talking about easily 4 to 5 billion dollars per month that is $60billion in revenue in a year."
On the delay in declaring power emergency, Daggash said: "Nothing is stopping an emergency being implemented: it is for a strategic fund. The issue is that when somebody said I am going to declare emergency, he wants to buy it from you that are asking this questions.
"If we decide today that under emergency we are not going to give anybody any money, this is just a hypothetical situation or I am taking 50 per cent of every sector's money and put it into one sector how we need to react. You don't take such far reaching decision until you are very clear with the road map. You are aware that there is the power reform committee that was set up last year, the report you are aware has been submitted to the president for further discussion and adoption at the National Energy Council after that, it goes to the Executive Council."
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