The 2014-2016 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) submitted to both arms of the National Assembly - the Senate and House of Representatives - has fixed crude oil benchmark for the yet-to-be-presented 2014 budget at $74 per barrel.
For debt service, the 2014-2016 MTEF/FSP submitted by President Goodluck Jonathan earmarked N663.6 billion and N48 billion was earmarked for domestic and foreign debt service, totaling N712 billion.
Under the "Federally Collectible Revenue" category, the federal government is projecting to earn N10,519 trillion for 2014. A breakdown reads: Gross oil revenue (N6,814 trillion), Gross non-oil revenue (N3,288 trillion), non-federation account levies for targeted expenditure (N250.0 billion), education tax (N156 billion) and National Information Technology Development Fund (N9.390 billion).
LEADERSHIP recalls that the oil benchmark price of $75 per barrel arrived at for the 2013-2015 fiscal year's was subject of intense horse trade between the executive and the National Assembly. A $79 per barrel oil benchmark was later agreed for the 2013 budget.
The 2014-2016 MTEF/FSP signalled increasing threat to Nigeria's crude oil revenue from emerging competitors - global and regional - vis-a-vis dwindling demand for Nigeria's crude oil, chiefly by the US.
"New regional producers, including Ghana, Cote d' Ivoire, Liberia and Uganda are adding to the supply such that previous importers are Nigerian crude oil are now producing and exporting oil. Although India and China are presently making up for the falling US demand, these developments suggest that there could be significantly lower demand for Nigeria's crude oil over the medium to long term, and thus, suggests the need for more prudence in managing our available resources," the document read.
Jonathan in his letter dated September 12, 2013, to the Senate President, David Mark, said that the planning documents were prepared against the backdrop of global economic uncertainty.
"The developments towards preparation of the 2014 budget have culminated in the 2014-2016 MTEF and FSP. Prepared against the backdrop of global economic uncertainty, the 2014-2016 MTEF and FSP reflect the reality of our circumstance; and will ensure that planned spending is set at prudent and sustainable levels consistent with government's overall medium-term developmental objectives." Jonathan's letter read.
The Senate resolved to begin deliberations on the Medium-Term Expenditure Framework and Fiscal Strategy Paper next Tuesday.