• Reps begin debate
The Senate yesterday began the debate of the general principles of the 2016 budget.
While some Senators hailed the spirit and content of the budget. Others described the fiscal document as unimplementable and asked that it be reworked.
The debate, which cut across party lines, with most All Progressives Party (APC) Senators who spoke insisting that the budget is an honest move to fix the economy of the country, while their Peoples Democratic Party (PDP) counterparts, expressed skepticism about the workability of the fiscal policy.
Some of the lawmakers cautioned the government to be mindful of excess borrowing to finance the budget as the measure might signal a wrong impression of economic affluence when the economy is actually undergoing recession.
At a stage during the debate, there was shouting match on the floor of the Senate but the Senate President, Abubakar Bukola Saraki, managed the situation to avoid out right rancor.
Senate Leader, Senator Mohammed Ali Ndume, led the debate by outlining the objective assumptions of the budget.
Ndume noted that the budget entitled “budget of change” is unique in so many ways.
The preparation of the budget, he said, was based on Zero Based Budgeting (ZBB) system which required all expenses on projects and programmes to be fully justified by MDAs.
The Senate Leader who said that the budget is aimed at promoting inclusive growth including the poor and vulnerable noted that it would however be challenged by the decline in oil prices and slowdown in the global economy.
Ndume said that the budget was designed to ensure that the country’s economy survived by stimulating economic activities, making it more competitive by focusing on infrastructural development as well as to create a number of jobs.
He added that budget focuses on broadening the tax base and improving the effectiveness of revenue collection as well as diversifying the economy and moving it away from dependence on oil.
He said that the 2016 budget of N6.08 trillion is a “framework that will consolidate and add impetus to the change agenda of this administration and will promote economic growth, job creation, poverty reduction and service delivery to all Nigerians.”
Let me start by saying that indeed we have to fund part of this budget by borrowing because in the previous administration a huge chunk of our common patrimony our resources have been stolen.
Senator Ahmed Lawan (Yobe North) in his contribution noted that the challenge of the economy is not the current price of oil in the world market.
Lawan said that the challenge of the economy “is and has always been corruption, corruption. 55 privileged Nigerians in the last 16 years stole 1.34 trillion.”
He added, “This is the 17th budget I am debating in the National Assembly and with the exception of 2005 Appropriation, there was never an implementation of more than 40%. Nigerians was shortchanged for 16 years.
“The proposal before us is the first in the last 17 years that an allocation of 30% of the appropriation is given for capital expenditure and for the first time in a genuine, sincere, honest and transparent manner the executive arm of government as deem it necessary to give ordinary Nigerians something, some succour, some hope and genuine one for that matter that we have N500 billion allocated to the school feeding and social and the safety nets generally.
“Mr. President 2015 budget when we debated it here the proposal was N500 billion for the entire capital budget and we said it and it came to pass that they were not going to implement even half of that.
“In fact at that time I mentioned that Nigerians with over 179.9 million will have only about N200 billion in a budget of 4.9trillion.
“Today, we have a budget that provides 30% in the first instance and so many other social safety nets that will be for disadvantage Nigerians, Nigerians that are most vulnerable that have little or no hope. This is again the first budget presented to the assembly in the last 17 years in which revenue from oil is not predominant and is not overwhelming.”
Senator Enyinnaya Abaribe (Abia South) faulted the budget and urged the government to withdraw it so as to go back to the drawing board.
He said, “I am going to quote copiously from the Senate Leader. He said this budget is unique and titled `Budget of Change’.
“This budget is indeed unique, the first budget that has ever been sent out to the public of Nigeria and after the budget presentation, the finance minister has never come to explain the details of the budget as it is normally done.
“It is a budget of change, I agree but it is a change in the wrong direction. I say it is a change in the wrong direction because it says that it is based on zero budgeting requiring all expenses to be fully justified.
“A budget that increases spending up to 30% based solely on borrowing, in what way is it justified? That is the question we want to ask the people who brought this budget of change.
“We ask a question: this budget has moved the 2015 budget from N4.45 trillion to N6.08 trillion and we felt that moving it on zero based budgeting should actually show how it is done.
“Of course we get nothing; all we get is that we are going to borrow.
“A budget that moves domestic spending within Aso Villa from N580 million to N1.7 billion cannot be a budget of change.
“We were told that in the revised budget there was an adjustment due to error, we agree but what has happened is that the money up to N7 billion were moved from buying vehicles to being spread in offices.
The House of Representatives began consideration of the 2016 Budget yesterday.
The budget was laid by President Muhammadu Buhari on the 22nd of December 2015.
The Majority leader of the House, Hon. Femi Gbajabiamila who presented an overview of the budget before the House allayed the fear of members.
According to him, the 2016 budget is different from what obtained in the past.
He said: “The 2016 budget is epic and historical not just because of its super mega size of N6trillion but for reasons that it touches the economic and social well being of the people of Nigeria.
“It is a budget based n the internationally acclaimed zero based budgeting system where every kobo has been justified by the MDas.
Gbajabiamila said the 2016 budget contained N6.077 trillion out of which N2.648 trillion would be for recurrent (non-debt); N1.845 trillion capital expenditure; N1.475 trillion for debt service and N351. 37 billion for statutory transfers.
He said the budget “comes with N2.2 trillion deficit to be financed with domestic borrowing of N984 billion and foreign borrowing of N900 billion,” adding that its the first time that domestic borrowing will be higher than foreign borrowing.
He saint the domestic loans would be at a “highly concessionary terms with moratorium and single digit interest of about 3 percent.”
Gbajabiamila said the borrowings would stimulate Nigeria’s economy, particularly the capital component, which makes up is about 30 percent of the budget.
According to him, priority areas of government are: “ Works, Power and Housing with the allocation of N433.4 billion, Transport N202 billion, Defence N134.6 billion, Interior N53.1 billion.
The lawmaker said Agriculture and Solid Minerals Reforms are also priority areas in the budget
“I would like to state at this point that there is also a direct correlation between the government’s credibility and anti-corruption fight and the willingness of the World bank, IMF and even the domestic lenders to give this very concession rates.
“They believe the monies borrowed will be properly channeled and utilized and their chances of getting paid back a lot higher and so have expressed a willingness to assist the government in financing its budget deficit through these loans.
“The government also intends to reduce taxes whilst broadening the tax net and pursue a more aggressive revenue collection drive. It also intends to block leakages and waste thereby freeing up more funds for budget implementation. Reforms such as the Treasury Single Account are already yielding positive results.”
He said the president has called the budget the budget of change and called for a speedy passage of the document.
Members of the House who spoke yesterday were of the opinion that though the budget seem to be people-oriented, there is the need to be cautious based on the current economic situation in the country .
Some of the main observation of members were the crashing oil prices which has dropped below $30 per barrel; the lack of adequate implementation of past budgets by the executive; need to move away from being an oil- based economy and the huge deficit in the budget.
Budget performance should be between 75 or 80 percent at least so the 2016 budget would not go the way of previous budgets, the lawmakers said.
A member, Jimoh Olajide expressed concern on the deficit of N2.2 trillion in the budget and wondered it it would not impact negatively on the budget
Lawan Abubakar ( Adamawa) spoke on the strength of the dollar against the Naira saying its causing a disjunction in the Nigerian Economy? He opined that its necessary to stem oil heft and pipeline vandalization to enable the federal government implement the budget reasonably in the face of dwindling oil revenue.
The Speaker of the House, Hon. Yakubu Dogara said members would be allowed to contribute to the debates on the budget from yesterday Wednesday to Tuesday next week.
Many members indicated their intention to contribute to the budget debate
The debate continues today.
“It also increases the spending that is due to renovations within the Villa; they are going to renovate the Villa with N3.9 billion.
“What else do you want to renovate there that Nigerians will see in the Year 2016.
“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.
“The job of the opposition is to help the government to get its priorities right so I want to please urge this government to withdraw this budget and go back to the drawing board.”
Chairman, Senate Committee on Finance, Senator John Owan Enoh, (Cross River Central) took a critical view of the budget insisting that the budget has quite some fine points no doubt.
Enoh said that the debate should dwell on some of the matters that will concern everyone.
He said, “The budget seeks to stimulate the economy for example through economic diversification, import substitution, export expansion and promotion. This is good.
