Leadership (Abuja)
Justus Nduwugwe
14 October 2008
As preparations for the 2009 budget reached feverish pitch over the weekend with ministries, departments and agencies (MDAs) defending their budget envelopes, there is the likelihood that the Federal Government would cut its oil price benchmark following the turbulence in the global oil market.
According to reliable information made available to LEADERSHIP, the Federal Government has indeed begun a re-jig of the 2009 budget arising from the threat posed by the global decline in crude oil prices.
Crude oil price, which rose to over $140 per barrel in the second quarter of this year, dropped to below $85 per barrel last week, too close to the government's earlier proposal to put the oil price benchmark at $62.5 per barrel for the 2009 budget.
Sources also indicated that although the government had not arrived at a final oil benchmark, the benchmark proposal for the 2009 will be less than the 2008 appropriation of $59 per barrel.
The same source also disclosed that the government is drastically cutting down on recurrent, overheads and capital expenditures in a bid to prudently manage resources as well as ensure quality expenditure.
Indeed, the President, Umaru Musa Yar'Adua, has directed that no allocation be made for purchase of cars in the 2009 budget as well as overseas trainings. The president's directive is aimed at blocking leakages and frivolous expenditure by MDAs.
It is envisaged that the 2009 budget will focus mainly on the seven-point agenda of the present administration such as power, health, education, the Niger Delta and also River Niger dredging and the second Niger bridge
The 2009 budget is expected to be a clear departure from the past as some federal MDAs will not receive any capital allocation.
At the end of every quarter of next year, there will be performance appraisal of the 2009 budget and the ministers and permanent secretaries of federal ministries will be held responsible for poor performance of the budget.
LEADERSHIP was also told that there is going to be a performance management for next year's budget. A performance measurement and benchmark is being set for all MDAs in 2009.
The President had, two weeks ago, ordered the Secretary to the Government of the Federation to set up an inter-ministerial committee chaired by Minister of State for Finance Remi Babalola to re-work and re-jig the 2009 budget.
The 2009 budget, which is at an advanced stage, is expected to be presented very soon to the Federal Executive Council (FEC), which will approve it before it is presented by the President to the National Assembly.
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