10 April 2014

Nigeria: Senate Passes N4.695 Trillion 2014 Budget

Photo: Vanguard
President Jonathan signs the budget (file photo).

The Senate yesterday passed the 2014 budget totalling N4.695 trillion, an amount which is N52.2bn higher than the N4.642trn submitted by President Goodluck Jonathan.

In the same vein, the House of Representatives will today begin consideration of the report of the 2014 budget which was presented to the House yesterday by the chairman of the Committee on Appropriation, Hon. John Enoh.

The co-ordinating minister for the economy and minister of finance, Dr Ngozi Okonjo-Iweala, had, on December 19, last year, submitted the budget proposal to the National Assembly. The Senate passed the budget after a clause-by-clause consideration of the budget.

Highlights of the 2014 budget as approved by the Senate are statutory transfers (N408,687,801,891), debt service (N712,000,000,000), recurrent expenditure (N2,454,887,566,702), and capital expenditure (N1,119,614,631,407) while the aggregate expenditure is N4,695,190,000,000.

Though the executive pegged $74 per barrel as benchmark oil price for the budget, the Senate raised it up to $77.5 per barrel as earlier agreed with the House of Representatives before the final consideration of the budget.

But other parameters like estimated crude oil production of 2.3883million barrels per day, GDP growth rate of 6.75 per cent, inflation rate of 9.5 per cent and exchange rate of N160 to one US dollar tallied with the ones approved by the Senate in the budget passed.

Senate president David Mark commended his colleagues for the timely consideration of the budget of the ministries, departments and agencies of government at their various committee levels.

The executive proposal submitted by President Jonathan was N4,642,960,000,000 which included N399,687,801,891 ( statutory transfers), N712,000,000,000 (debt service), N2,430,665,361,597 (recurrent, non-debt expenditure) while the balance of N1,100,606,836,512 is for contribution to the development fund for capital expenditure.

There is also a Subsidy Reinvestment Programme (SURE-P) component of the budget to the tune of N268, 370,000,000 for the year 2014, which did not form part of the aggregate budget figure of N4.6429trn but was however captured in the final compilation of the bill.

Senator Ahmed Lawan (Yobe) faulted the N2bn allocated to the north-east zone despite the insurgency going on in the region. However, Mark appealed to him that the National Assembly would liaise with the executive for more funds to be added to the north-east initiative.

Also, there was a mini drama yesterday as the budget for the ongoing National Conference narrowly scaled through; a majority of the senators answered with a resounding "nay" when the question was raised but the Senate president saved the day by allowing it to scale through.

Leading the budget debate, the chairman of the Senate Joint Committee on Finance and Appropriation, Senator Ahmad Maccido, explained that in preparing the details of the bill his committee adopted a benchmark price of $77.50 per barrel of crude oil, a crude oil production of 2.38m barrels per day and an exchange rate of N160 to $1.

Maccido said his committee observed that the 2014-2016 Medium Term Expenditure Framework and Fiscal Strategy Paper, upon which the 2014 budget was based, just like the previous editions, will require to be refined and re-tooled both in procedure and process.

He noted that a major issue was in the planning required and the engagement processes with all stakeholders, which will have added effective value to the budget process, with obvious multiplier effect on the economy.

He also said that the drop in oil production volume as reflected in the budget estimates of the past two years remained a disturbing phenomenon and could be traced to the obstruction to oil production as a result of pipeline vandalism and crude oil theft.

Maccido described the appalling state of budget implementation in the country as still a worrying recurring decimal for the economy.

For instance, he said, "unspent funds that are rolled over into the economy only make a mockery of development which is a dire necessity across the nation", adding that government must be seen to be taking steps to improve on this.

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