It also adopted the 2020 to 2022 Medium-Term Expenditure Framework (MTEF) after increasing the $55 per barrel oil benchmark as proposed in the MTEF document to $57 per barrel, an action it said would help the Federal Government raise money to finance key aspects of the budget.
Senate President Ahmad Lawan disclosed that Buhari would appear at a joint session of the National Assembly on Tuesday to present the budget. Also, Senate spokesman, Adedayo Adeyeye, confirmed to reporters shortly after plenary that the budget would be presented 2:00 p.m. Tuesday, noting that this is the first time the executive would present the budget in October.
Some senators however subjected the revenue projections contained in the report on the MTEF presented by the Chairman of the Senate Committee on Finance Solomon Adeola to a critical review, submitting that an overhaul was needed to sanitise the nation’s budgeting system.
Senator Gabriel Suswam cautioned against borrowing continuously to finance the budget. He said: “There is a problem with this because the debt profile of the country is N24 trillion. We compare ourselves with these small countries that live on contributions from donor countries and say that our debt sustainability profile should be moved to 56 per cent.”
Drawing attention to the provision of money in the budget to pay for Joint Venture Calls (JVC), Suswam said: “If we are not raising any money and we continue to pay the JVC, there is a problem with that, as we are not getting anything out of them to pay the JVC. It means that the essence is defeated. We go into partnership with international oil companies to raise money to finance our budget but we are not getting anything.”
Also, Senator Dino Melaye said it was unacceptable that the country was borrowing money for consumables. “If you want to borrow, it must be 100 per cent for infrastructure. If we do that, we would have helped the country and generation yet unborn,” he said.He urged the Central Bank of Nigeria to promote justice and abolish favouritism. He stressed the need to enforce the use of information and communications technology in oil production and sale, without which, according to him, operations in the oil sector would continue to be shrouded in secrecy.
In his submission, Lawan said: “I believe that we have to diversify the economy like many of us did mention during the debate. Definitely, this mono-economy is not going to work for this country. It has not worked really because we have not been able to put our revenues into the proper form to provide infrastructure.
“We have lost so much ground over the years. Time has come to diversify this economy. Oil is becoming something else. It is not going to be a darling of any one. Perhaps, the greatest users of oil will even stop buying the oil. So, we need to have an economy that provides jobs for everybody and creates wealth.“We have to diversify in the area of agriculture. We have to diversify in the area of solid minerals. We have to diversify in the area of tourism.”
The Senate approved the retention of N305 to1$ to ensure economic stability. It adopted 2.18mbpd as daily crude oil production output in 2020. It noted that the 2.18mbpd approved would be realised, given concerted effort by the Nigerian National Petroleum Corporation (NNPC) and security agencies to combat oil theft and vandalism.
It also recommended an increase in the revenue target of Nigeria Customs Service (NCS) from N942.6 billion to N1.5 trillion, given the performance of the NCS in the last nine months. It recommended that N557.4 billion from the revenue increment of NCS be used to reduce borrowing by N200 billion and increase capital expenditure.
This, it said, would help decrease the size of the budget deficit from N1.7 trillion to N1.5trillion and also increase capital available to ministries, departments and agencies by N357 billion, from N1.01trillion to N1.367 trillion.Similarly, the House of Representatives approved the 2020-2022 Medium-Term Expenditure Framework and Fiscal Strategy Paper.
It adopted 2.18mbpd as daily production output and $57/barrel as crude oil benchmark price for the 2020 fiscal year, just as it projected that the revenue target of the Nigeria Customs Service (NCS) of N942.6 billion for 2020 should be increased to N1.5 trillion.
The House applauded the NCS for exceeding its targeted revenue despite global economic challenges and the closure of Nigeria’s borders. It acknowledged that the NCS revenue as at September was N1 trillion against the budget figure of N969.8 billion for the year 2019.
The House approved that N557.4 billion from the revenue increment of NCS be used to reduce borrowing by N200 billion and increase capital expenditure, thereby decreasing the size of the budget deficit from N1.7 trillion to N1.5 trillion and also increasing the total capital available to ministries, departments and agencies by N857 billion, from N1.01trillion to N1.367 trillion.
It further approved that the exchange rate of N305/$ should be maintained for economic stability, urging the minister of finance and her team to boost growth by increasing the GDP and reducing the inflation rate to single digit.
Reacting to the new oil price benchmark, Prof. Olu Ajakaiye, a former director general of the Nigerian Social and Economic Research (NISER) said: “It was wrong to move the benchmark price upward. For obvious reasons, the increase would not be to address critical infrastructure. It would be allocated for their own constituency projects, thus polarising budgeting entities.”
However, he added that the MTEF is just an opinion of the National Assembly. He further urged the Executive to maintain the $55 benchmark price for the 2020 budget. But a development economist, Mr. Odilim Enwegbara, reasoned differently, saying: “The House of Representatives was more realistic in its projection. Oil price will certainly fluctuate between $65 and $79 next year. There is therefore no basis to leave the benchmark so low at $55.
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