The National Assembly is considering $50 crude oil benchmark in the 2018 budget against the $47 benchmark adopted in the Medium Term Expenditure Framework (MTEF), BusinessDay gathered on Thursday.
The development was part of ongoing discussion between the leadership of both Senate and House of Representatives and Executive, as part of efforts aimed at boosting projected revenue and reduce the fiscal deficit pegged at N2.005 trillion fiscal deficit and borrowing estimated at N1.699 trillion.
Ibrahim Babangida, chairman, House Committee on Finance who spoke with Legislative Correspondents on Thursday, expressed optimism that the budget will be laid next week Tuesday.
“So far all the committees have submitted their budgets and throughout this week, we’ve been on the collations of the budget. The budget was supposed to be laid yesterday (Wednesday) but unfortunately, we couldn’t conclude, so we are hoping by Tuesday, it will be laid on the floor of the House.
“This is to show that it is almost concluded. What you are suppose to look at is not the size of the budget but the revenue projections. You know government has a lot of responsibilities and government budge is on activities on uncertain revenues even though we are still operating a deficit budget but I can assure you that the revenue potentials is higher in 2018 than it was in 2017.
“It was on the basis of that, that the budget has to go on. If you should look at the crude price last year and this year, they’re different and the House is still looking at the possibility of slightly jerking up the benchmark again. Possibly to $50. You know we have passed 47 but if you look at the average price of crude now, it’s slightly above 60. That’s why we are thinking if jerking up the benchmark price from 47 to 50. So that we have more revenue to reduce the size of the deficit,” Babangida told the select Correspondents.
While reacting to questions relating to absymal poor implementation of the budget, Babangida argued that the procurement process adopted by Federal Government is deficient.
“I think it has to do with the procurement process and I know recently the Federal Government has signed an Executive Order on ease of doing business. Because the budget was passed in May last year, if you look at the procurement process, it has to be advertised for a period of time, they have to open tender and do this and that, so it takes a lot of time.
“But what we want to advice the Federal Government is to be making releases as at when due not to wait until when you have signed the budget or whatever. Because st the end of the day even though the budget is not signed, once it is signed immediately all money that is due should be sent to the respective ministries because if you conclude your procurement process and the money is not there, what we have is that they don’t even award until when there is money now! Which I believe is not in line with the financial regulations.
“Because, you cannot award on a basis of money. If you are actually doing budgeting, that is why we have ongoing projects. There are projects that are carried from me fiscal year to another. So when you say you cannot award until when money is available, then there’s a problem. Because what about if it is a single project, how do you award it?
“I believe once an item is built in the budget, it has to be awarded 100% even if they cannot implement the budget 100%, that particular outstanding should be carried forward to the next budget year,” the Kano lawmaker stressed.
In the bid to solve myriad of challenges on current budgeting system, Babangida noted that the House and indeed the National Assembly is working on the holistic overhaul of the Fiscal Responsibility Act.
He explained that the delay in the laying and passage of the 2018 budget became necessary in order to address certain emerging issues.
“Anything worth doing at all worth doing well. You don’t just pass the budget for the sake of just passing it. We have to do a thorough job. There are issues here and there. You have to adjust them. we are living in a dynamic society. Let me give you the simplest example, when was the letter written by the President to the National Assembly, in respect of the aircract sent? So as we are doing the budget, issues are coming up and we have to address them. What we are doing is for the interest of Nigeria.
“I just told you that we are thinking of increasing the budge, if we don’t make money available, how can they fund the budget? So if we have decided that okay, we are passing the budget at $47 per crude, them we have shortage of funds, then how do they fund the budget? So we are looking at the possibility of reviewing that and increasing it, it requires a process,” the lawmaker observed.
He also frowned at the 50% level of implementation of the 2017 budget, stressing that “the 50% is noteven all round. Another fundamental question is that, is it the total 50% of the 2017 budge that is rolled over to 2018 or not? We have to look at that.”
KEHINDE AKINTOLA, Abuja
