2016 budget not realistic – Senators

Nigerian Senators on Wednesday expressed grave concerns over the perceived near impossibility of implementing the 2016 budget in which President Buhari’s government outlined plans to spend about N6.08 trillion within this fiscal year.

At the second reading of the budget proposal, the lawmakers said certain key parameters, including benchmark oil price of $38 per barrel, oil production of 2.2million barrel per day and exchange rate of N197 to $1 are obviously unrealistic, in view of current realities.

The naira has depreciated to N302/$ at the parallel market, while crude oil price  dropped to a low of about $28 per barrel in the international market on Wednesday.

But while some senators believe the N6,077,680,000,000 appropriation bill is laudable and tailored to meet critical needs of the nation, others painted a gloomy picture, implying that the proposal is ‘dead on arrival.’

The N6.08 trillion proposed budget is about N1trillion higher than the revised allocation for N5.09trillion for 2015 with statutory transfers of N351.37billion; N1.475 debt service and recurrent (non-debt) expenditure of N2.648 trillion.

Similarly, capital expenditure was increased from N557billion in 2015 to N1.85trillion for 2016, representing 30 percent increase.

Federal Government revenue collection is projected at N3.86trillion in the current fiscal year, up by N0.41trillion from 2015, but there are growing concerns around whether government will be able to meet this target.

At the commencement of the second reading of the budget on Wednesday, Enyinaya Abaribe (PDP, Abia South) believes the budget is ‘dead on arrival’.

Abaribe carpeted , Kemi Adeosun, the finance minister, for not coming to explain the details of the budget as previously done.

To the PDP senator, increase in domestic spending in the Presidential Villa from N580 million to N1.7billion ‘cannot be a budget of change’.

While also condemning the proposed renovation of the Presidential Villa with N3.9billion, Abaribe called on President Muhammadu Buhari to withdraw the budget and go back to the drawing board. “We know what is going on in the global economy: this budget is predicated on an oil benchmark of $38 per barrel and I can now say that with oil being $28 today, this Budget is dead on arrival”, he stated.

In his contribution, Deputy Senate President, Ike Ekweremadu, argued that the budget is unrealistic and called on legislators to pass a budget that will be easy to implement.

Ekweremadu expressed concern over the N1.84trillion borrowing to finance the budget, saying the budget should be reviewed downwards in view of dwindling oil revenue.

He advocated for Communication Tax which ensures that everybody that makes phone calls or sends text messages pays tax to the government. This, he said, will shore up government revenue.

While calling for equitable distribution of projects and reduction in cost of governance, the Deputy Senate President also made a case for charges on bank transactions to be converted to taxes for government.

“I do not believe we should ban any goods from coming into this country, we should rather increase the tariff by 300 percent so that government can make money.

“My consolation is that this parliament has the final say on this budget, so I will like to appeal to my colleagues to look at this budget critically, I will be really worried if we are able to pass the budget the way it is”, he said.

The Federal Government also proposed N500billion as social intervention fund for unemployed Nigerians and to partner with states and local governments to recruit 500,000 unemployed graduates and NCE holders as primary school teachers.

But Gbenga Ashafa (APC, Lagos East) said the sources of funding for the intervention programmes were not indicated in the budget, wondering what manner of collaboration would come from most states that fail to pay workers salaries.

Ashafa therefore advocated for a supplementary budget to cover the lapses in the current budget proposal.

Peter Nwaoboshi (PDP, Delta North) questioned the rationale behind the reduction of the Presidential Amnesty Programme from N47.39billion in 2015 to N20 billion in 2016, adding that the provision of N500billion intervention programme for unemployed Nigerian youths is ‘missing in the budget’.

On his part, John Enoh, Chairman, Senate Committee on Finance,  expressed concern that the overall fiscal deficit of N2.22trillion is higher than the capital expenditure of N1.85trillion.

“What it means is that some component of what we are going to borrow, we are going to use for recurrent items and we need to be very careful on this basis. And I think that although the deficit to GDP is about 2.16 percent, which is about 14 percent of our GDP, and we think that in terms of international comparison, we are still doing well.

“But we need to also remember that when the IMF chief executive came to Nigeria, she was quite graphic in what she demonstrated that for every one naira, about 37kobo is devoted to servicing debt. We need to be a little bit more careful about it. That means there’s pressure on what we earn in terms of what we use to service our debt”, he submitted.

Federal Government revenue is also projected at N820billion oil-related revenue, N1.45trillion non-oil revenue and N1.51trillion independent revenue.

In his contribution, Ahmad Lawan (APC, Yobe North), blamed the N1.84billion  borrowing in this year’s budget on what he called ‘huge chunk of stolen funds’ in the last 16 years of PDP administration.

The senator argued the 2016 budget will promote economic growth, job creation, poverty reduction and service delivery to all Nigerians.

OWEDE AGBAJILEKE