16 October 2012

Nigeria: Oil Benchmark - House Warns Okonjo-Iweala

Photo: This Day
The new Nigerian finance minister, Dr. Ngozi Okonjo-Iweala.

The row over the oil benchmark for the 2013 budget continued Monday with the House of Representatives calling on the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, to either obey the law or resign.

According to the House, the minister's insistence on the $75 per barrel oil benchmark breached the 2013-2015 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper passed by the House on October 9.

The House had approved $80 as the oil benchmark for revenue projections in the 2013 budget under the MTEF, but Okonjo-Iweala has warned that adopting a higher benchmark would hurt the economy as it could trigger inflation and lead to the depreciation of the naira.

However, Chairman, House Committee on Finance, Dr. Abdulmunini Jibrin, said the MTEF was already a law that must be complied with just as the 2013 Appropriation Bill will pass through second reading today during plenary in the House.

He also debunked claims that there was a plot to impeach the Speaker, Hon. Aminu Tambuwal, over the budget face-off with the executive.

He told THISDAY in an exclusive interview that the minister could not be a law unto herself, adding: "When the Minister of Finance says that $80 should not be accepted, we expect that the minister should be knowledgeable enough to understand that the budget was based on the MTEF and we are sticking to it, there would be no going back. It is finality.

"And if she is not willing to accept it as finality, as an enlightened person, as a civilised person, and somebody who claims to respect the laws of the Federal Republic of Nigeria, it is expected of her to resign honourably.

"What she is simply doing is that she is going against the laws of the Federal Republic of Nigeria. This is what the law of the federation says; it is not a law of the Speaker of the House of Representatives or the Chairman of the House of Representatives Committee on Finance.

"She cannot be above the law of the Federal Republic of Nigeria. But, if she claims that she is above the law, let's watch and see what will happen."

On how to break the impasse, he said: "I think in the first place, it is a non-issue. We are not being fair to the laws of the federation if we start asking 'what is the way out of this'? The executive arm said $75 per barrel and we said $80. The reality of the matter is that the House of Representatives is operating from the point of the law. Our argument is driven from the laws of the land and that is where we derive our strength.

"The law provides that the executive proposes and the National Assembly makes modifications and approves the Medium Term Expenditure Framework, which is supposed to constitute the ingredient that the executive will use to present the budget.

"Even if the budget is a proposal that the law allows the executive to make, then, we have the powers of appropriation."

He said the position of the House on the oil benchmark was sacrosanct and was not subject to a review by the executive.

Jibrin, who also faulted Okonjo-Iweala's report on the implementation of the 2012 budget, said the Fiscal Responsibility Commission, entrusted with the task of enforcing the Fiscal Responsibility Act, had last week openly denied the level of implementation of the budget as given by the Ministry of Finance.

He reiterated the position of the House that if the 2012 budget is not effectively implemented, it would hinder the timely passage of the 2013 budget.

He also said it was a contradiction to build up foreign reserves of about $41 billion when the nation's debt portfolio stood at over $40 billion.

"Go and ask renowned economists in this world, it is a huge contradiction for you to be building your foreign reserves, yet you are matching it with debt," he said.

He warned financial institutions to desist from lending funds to Nigeria on the sole instruction of the minister without the express authorisation of the National Assembly.

Jibrin also described reports of a possible impeachment plot against Tambuwal as mischief, adding that the House was solidly behind the speaker.

He told some reporters in Abuja on Sunday evening that anyone thinking along those lines does not understand the current power matrix of the House and as such has been misinterpreting the activities of members.

"Nothing, nobody can touch the speaker. It is impossible; he is enjoying tremendous support; that is because he is doing the right thing, and members are happy with him," he said.

Meanwhile, as the National Assembly commences the second reading on the 2013 budget today, it is very likely that the Senate will join the House of Representatives to adopt the $80 benchmark for the budget.

THISDAY gathered that this was the outcome of the meeting between the leadership of both finance committees of the National Assembly.

A competent source close to the Chairman of the Senate Committee, Senate Ahmed Makarfi, told THISDAY that the Senate would adopt the House's position of $80 as the 2013 budget benchmark.

"It is certain that when Senator Makarfi will lead the debate on the second reading of the 2013 budget, his debate on the budget will be based on $80 per barrel," the source said.

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