Budget: Reps propose $54 oil benchmark

Budget: Reps propose $54 oil benchmark

Speaker of the House of Representatives, Mr. Aminu
Tambuwal
The House of Representatives on Thursday proposed that the crude oil benchmark
for the 2015 budget should be $54, down from the $65 originally proposed by
President Goodluck Jonathan.
The Senate, which last week approved the 2015-2017 Medium Term Expenditure
Framework and Fiscal Strategy Paper, had settled for $52 as the oil price
benchmark.
There were indications on Thursday that both chambers might likely pass the
budget itself next week after harmonising their positions on the oil benchmark
price.
The House members took the decision on Thursday as they considered and
approved the MTEF. The approval of the MTEF is a mandatory requirement
preceding the passage of the N4.3tn budget estimates by the National Assembly.
In slashing the benchmark, the House adopted the position of its Joint
Committees on Appropriation, Finance, Aids/Loans and Debt Management, which
advised against the $65 proposed by the executive.
The report of the committees indicated that the $65 was not sustainable in the
face of falling crude oil prices globally.
However, the House retained the oil production projection of 2.278 million barrels
per day for 2015; 2.327mbpd for 2016; and 2.406mbpd for 2017 as proposed by
the executive.
While raising the projected non-oil revenue for the 2015 budget from N3.5tn to
N4tn, the lawmakers cut the total recurrent proposal from N2.6tn to N2.5tn.
On the capital side, the House raised the proposed expenditure from N633.53bn
to N700.78bn.
Statutory transfers also dropped from N411.85bn to N368.27bn.
But a decision of the House that is likely to generate tension between the
lawmakers and the Presidency is the scrapping of the Service Wide Vote, where
the government has set aside N360.94bn to spend this year.
The existence of the SWV has generated controversies lately, as the House
complains of not knowing how the vote is utilised.
Just last week, the House Committee on Public Accounts reported that only the
President, the Minister of Finance, Dr. Ngozi Okonjo-Iweala; and the Director-
General of the Budget Office, Dr. Bright Okogu, had access to the account.
Acting on the report of the joint committees, the House relied on the findings of
the PAC, which is headed by Mr. Solomon Olamilekan.
“The SWV is operated by only three people; Jonathan, the Finance minister and
the DG, Budget Office,” Olamilekan had stated.
Speaking on the report, the Chairman, House Committee on Legislative Budget
and Research, Mr. Opeyemi Bamidele, told members to stick to the
recommendations of the committees and not allow themselves to be “boxed into
a corner” by the executive.
On how the $54 benchmark price was arrived at, Bamidele explained that a
research conducted by his committee found out that some oil-producing countries
with better micro-economic performance than Nigeria had settled for $60.
He said, “Saudi Arabia, Iraq and Venezuela are doing better than Nigeria. They
passed their 2015 budgets long before the fall in oil prices. Yet, they looked into
the future and decided to peg their benchmark at $60.
“The adoption of $54 is to ensure micro-economic stability for the country.”
For the official exchange rate, the House approved N198 to the United States
dollar as against the N165 proposed by the executive.
Similarly, the funding of the Subsidy Reinvestment and Empowerment Programme
was reduced from N102.50bn to N21bn”due to the fall in the price of crude.”
Lawmakers asked that the details of the SURE-P projects to be executed should
be attached to its annual budget estimates for approval by the National Assembly.
Meanwhile, the Presidential Amnesty Programmes for ex-militants in the Niger
Delta will gulp N63.2bn this year.
Out of the figure, N58bn will be spent on the welfare of the ex-militants, with
N34.5bn earmarked for the payment of stipends/allowances and N23.5bn for the
reintegration of the ex-militants who have received training.
The Special Adviser to the President on Amnesty, Mr. Kingsley Kuku, gave the
figures on Thursday at a separate budget defence session with the House
Committee on the Niger Delta.
He told the committee, which is chaired by Mr. Warman Ogoriba, that the balance
of N5.1bn was for the “operations” of the amnesty office.
The committee did not ask Kuku any questions, as he simply read out the budget
estimates to members before the session came to a close.