The row over the appropriate oil benchmark on which to base revenue projections for the 2013 budget has deepened as a meeting between the Senate and House of Representatives Finance Committees to adopt a benchmark has ended in a deadlock.
The two committees, which met on Wednesday in Abuja to reconcile the figures passed by each chamber of the National Assembly during their passage of the 2013 -2015 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF and FSP), failed to shift ground on their positions.
THISDAY learnt Thursday that at the meeting, members of the Senate Finance Committee insisted on the $78 per barrel oil benchmark as contained in the MTEF and FSP, which the Senate passed on October 16.
Their House counterparts also refused to budge on the $80 per barrel oil benchmark as contained in the version of the MTEF and FSP that the House passed on October 9.
Their disagreement came just as the Federal Government, which on Monday sought the National Assembly's approval for a portfolio of concessionary loans totalling $9.3 billion under its 2012-2014 Medium Term External Borrowing Plan, defended its decision to borrow to finance some critical projects.
The House, at another forum yesterday, justified its adamant position on the oil benchmark war, saying it would not change its stance except the executive could convincingly explain its preference for $75 oil benchmark.
The House has remained adamant for long, not shifting position on the adoption of $80 oil benchmark, a stance that has pitted it against the executive that is pushing for the adoption of $75 oil benchmark as contained in the 2013 budget President Goodluck Jonathan recently presented to the National Assembly.
The face-off over the oil benchmark has warranted the ruling Peoples Democratic Party (PDP) to intervene in a bid to smoothen the rough edges in the working relationship between the two arms of government that are controlled by the party members.
However, it was learnt that while the meeting of the Finance Committees failed to agree on the appropriate oil benchmark, it was able to adopt a harmonised version of the MTEF and FSP.
With the failure of the meeting to reach a consensus on the oil benchmark, sources said the principal officers of the two chambers of the National Assembly would have to meet to break the deadlock.
By the rules of the Joint Committees on Finance of the National Assembly, a benchmark must be adopted, as there is no middle-of-the-road approach.
According to a source, "the only alternative is for the Senate President David Mark to call a meeting of the principal officers of the National Assembly or a joint sitting to resolve the controversy on the benchmark to be adopted."
But the source said it was not expected that a joint session would be summoned to discuss the benchmark because of the numerical strength of the House whose members could use that to push for the approval of their own version of the oil benchmark. The Senate has 109 members, while the House has 360 lawmakers.
THISDAY checks revealed that the bickering over the oil benchmark, which has now put the two chambers on a collision course, might affect the early passage of the 2013 budget.
Wednesday's meeting was the first between the Senate and House Committees on Finance to adopt a working position on the oil benchmark before the various committees will commence inviting Ministries, Departments and Agencies (MDAs) to defend their budget proposals.
At the meeting where the Senate Committee Chairman on Finance, Ahmed Makarfi, led Senators Andy Ubah, Barnabas Gemade, Clever Ikisipo, Olubunmi Adetunmbi and Abdulkadiri Jajare to discuss with the House delegation, it was learnt that the lawmakers, after hours of heated debate, disagreed on the appropriate benchmark for the budget and the meeting ended without any decision.
The House delegation, led by Finance Committee Chairman, Hon. Abdulmumuni Jibrin, comprised Bamidele Opeyemi, John Enoh, Uzo Azubuike, Hassan Badawi and Gbadamosi Abdulrahaman.
It was gathered that at a point, the atmosphere became so charged that Uba became the chief whip of the meeting, calming members to 'cool temper' and let reasons prevail.
Sources said the House delegation insisted on the $80 benchmark, adding that the $5 difference between their version and that of the executive should be used to fund the deficit portion of the budget.
This will reduce the deficit portion of the budget from N1.3 trillion to N663.324 billion, while internal borrowing should be reduced from N727.19 billion to N243.33 billion, representing 66 per cent decrease.
But the arguments presented by the House members did not move the senators as they insisted that the budget should be based on an oil benchmark of $78.
As it was apparent that the meeting was not making any headway on the oil benchmark, it was gathered that Makarfi and Jibrin resolved that the meeting should be adjourned till further notice while consultations continue on the appropriate oil benchmark to be adopted.
Chairman, House Committee on Media and Public Affairs, Hon. Zakary Mohammed, also told reporters yesterday that the recommendation of $80 oil benchmark must be respected in the 2013 budget and the legislature would not accept the $75 proposed by the executive unless it adduced a superior argument to substantiate its position.
Mohammed challenged the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, to lay all the cards on the table to convince the parliament on the executive's preference for a lower oil benchmark.
"Our position on the oil benchmark of $80 still stands. I heard somebody said we are politicising it but they have not adduced any technical reasons for us not to consider $80 per barrel.
"In the last 10 years, with the exception of 2008, the price of a barrel of oil has never dropped below $100 so we believe that the $80 per barrel we recommended is practicable.
"No economy runs well when the public sector borrows money to fund social services but the economy runs when the private sector has access to funds to run businesses, generate employment and create wealth that will have spiral impact on the economy," he said.
On the fate of the 2013 budget considering the unending benchmark controversy and the delay it had caused in the budget process, Mohammed said preliminary works had begun on the budget since it was debated and referred to the House Committee on Appropriation.
Meanwhile, the Minister of State for Finance, Alhaji Yerima Ngama, yesterday assured Nigerians that the proposed $7.9 billion medium term-external borrowing plan by the Federal Government would not jeopardise the country's current debt sustainability ambition.
The $7.9 billion, which has been pending before the parliament, is part of the $9.3 billion loan portfolio Okonjo-Iweala unveiled at a meeting on Monday with members of the House Committee on Aids, Loans and Debts who had invited her to clarify the position of the executive on external borrowings.
Speaking at an interactive session with reporters in Abuja against the backdrop of public criticism over the proposed borrowing after exiting both the Paris and London Clubs debts, the minister said the new debt plan was necessary in order to actualise the present administration's transformation agenda.
He said the loan would come mainly from concessional windows from multilateral institutions without interest charges.
Ngama said sourcing developmental funding from the multilateral agencies had also become imperative given that Nigeria constitutes one of the largest contributors to these organisations.
He said as a member of the global community, the country was entitled to some concessionary windows, which were reserved for poor countries.
He explained that such windows were specifically aimed at the development of critical infrastructure with free interest regime.
He said: "Nigeria is not going to borrow blindly. The funds belong to us and are available to us at various levels."
The $7.9 billion facility would be drawn from six multilateral agencies, including the World Bank which is expected to provide $2.99 billion or 37.28 per cent of the total amount.
According to the minister, of $931.23 million or 11.78 per cent of the entire sum would be borrowed from the African Development Bank, while the Islamic Development Bank would provide $457.85 million or 5.79 per cent of the total figure.
In addition, the French Development Association is to provide $56.61 million or 0.72 per cent of the sum, while the EXIM Bank of India would commit $470 million or 5.94 per cent.
The EXIM Bank of China would also offer $3 billion or 37.94 per cent of the figure.
Giving a breakdown of sectoral allocation from the proposed debt, he said infrastructure would gulp the largest share of 35.7 per cent of the figure, while irrigation and water resources would attract 17.6 per cent.