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Tag: Fiscal Strategy Paper (FSP)

  • Reps adopt 2018-2020 MTEF document

    Reps adopt 2018-2020 MTEF document

    The House of Representatives was in total agreement with the Executive on the set parameters in the 2018-2020 Medium Term Expenditure Framework ( MTEF ) and Fiscal Strategy Paper (FSP).

    This was despite an attempt by Betty Apiafi (PDP, Rivers), to divert attention towards the status of recovered looted fund in funding the 2018 budget.

    Though the House Leader, Femi Gbajabiamila reminded the House that the consideration was about MTEF report, the Chairman Committee of Supply, Speaker Yakubu Dogara nonetheless said it has become necessary for the House to investigate the state of independent revenue of government.

    “It is safe to say the 2018 budget will not be funded by recovered looted funds but it is necessary to investigate the independent revenue of government by way of a motion,” he said.

    The consideration went on and the report was adopted without a dissenting voice.

    Before the consideration and rhe adoption of the report of the Committees on Finance, Appropriations, Aids, Loans and Debt Management, Legislative Budget and Research and National Planning and Economic Development on the 2018-2020 MTEF and FSP, the  2018 Appropriation Bill  had scaled second reading on the floor of the lower House without a dissenting voice.

    Following the referral of the document to the joint Committee last week, in his opening remarks Ibrahim Babangida (APC, Katsina) said the Committees took cognizance of the economic realities on ground in relation to global events.

    In consideration of the recommendations, the House resolved that benchmark for crude oil production of  2.3 million barrels per day be retained as proposed by the Executive for the 2018 Budget.

    The House however reviewed upward from $45 per barrel to $47 per barrel as the benchmark for the fiscal year 2018. “This is in consideration of the current positive outlook in the global oil market and expectation that OPEC and other allied oil partnership countries will sustain oil production “cuts deep” into 2018,” Babangida said.

    The ₦305/US Dollar as proposed by the executive for the 2018 Budget was  adopted. Babagida explained that,  “It is also advised that CBN should adopt measures to close the gap between the parallel market and the official exchange rate”.

    The House also adopted projected ₦5.279 trillion for non-oil revenue in 2018, “In addition, revenue generating agencies should intensify efforts on collections and measures that would reduce revenue loss. Specifically, Pioneer status and Tax incentives must be beneficial to the economy,” Babagida said.

    The ₦1.699 trillion new borrowing for 2018 as proposed by the Executive was also adopted. “However, borrowing must be project-tied. In borrowing more, government must remain focused and ensure it is used to fund critical projects that will increase productivity and contribute to financing such debt,” Babangida said.

    The House also adopted the recommendation that a 3.5 percent  growth rate be adopted, especially with the latest figures indicating a doubling of growth rate to 1.4 percent  in third quarter, 2017.

    Furthermore, the National Assembly was also directed to amend the relevant Sections of the Fiscal Responsibility Act and other extant laws.

    The House also approved the$350m borrowing plan for the Kaduna bye pass after being presented by Chairman, Committee on Aids, Loans and Debt Management, Ajayi Adeyinka.

    The borrowing plan was presented to the House though President Muhammadu Buhari.

  • 2018 budget: Reps bicker; conclude debate on MTEF/FSP

    2018 budget: Reps bicker; conclude debate on MTEF/FSP

    The House of Representatives Wednesday passed the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) through second reading after a contentious debate.

    The document was referred to the Committees on Finance, Appropriation, National Planning and Economic Development, Legislative Budget and Research and Aids, Loans and Debt Management to scrutinize and make recommendations to the House.

    The passage of the document paved the way to begin consideration of the 2018 budget on Tuesday, Wednesday and Thursday next week.

    Recall that President Muhamadu Buhari on Tuesday, 17th October, 2017 had forwarded a request to the Green Chamber for the approval of the 2018-2020 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP).

    Some of the key assumptions in the document is the production of crude oil at 2.3million barrels per day, oil price benchmark at $45 per barrel, while exchange rate is pegged at N305/$1 and GDP growth rate at 3.5 percent (revised)

    However the debate experienced hiccups as members of the People’s Democratic Party, PDP in the House insisted that it is procedurally wrong to debate the MTEF against the backdrop of the provisions of the Fiscal Responsibility Act (FRA).

    Members like Betty Apiafi (PDP Rivers) Nnena Elendu- Ukeje ( PDP Abia), Daniel Renejue ( PDP Delta),  Yakubu  Barde ( PDP Kaduna) , Dan Asuquo ( PDP Cross River) were of the opinion that a bad precedence would be set if the House goes ahead to debate the MTEF/ FSP as it did not come three months before the budget as required by the Fiscal Responsibility Act.

    Hardly had the House Leader, Femi Gbajabiamila commenced the presentation of his argument on the document than Hon. Betty Apiafi ( PDP Rivers) took the floor through a point of order.

    According to her, it was essential to do the right thing lest Nigerians misconstrue the motives of the legislature. She said the MTEF should precede the consideration of the budget and is supposed to be accompanied with macro- economic framework for the next three years.

    She wondered how the House would make necessary adjustments since that have allowed the executive to err procedurally.

    The other PDP members backed Apiafi’s position and held their ground until the House Leader made an appeal to them to allow the passage.

    Deputy Speaker Yussuff Lasun also made several interventions by appealing to members to allow the document pass. According to him, the House still has the power to change the assumptions to reflect the realities of the time and the wishes of the people.

    He said: “The MTEF is a paper that contains key assumptions open to debate, including benchmark, deficit, revenue projections…it is not cast in stone. Wether it is four months or now, no process has been circumvented.”

    Gbajabiamila while moving for the consideration of the document said:” Section 11(2) of the Fiscal Responsibility Act, 2007 provides that the Medium Term Expenditure Expenditure Framework ( MTEF) shall be considered for approval with such modifications, if any, as the National Assembly finds appropriate by a resolution  of each House of the National Assembly.”

    He said Section 11(3) of the same Act, “provides that the MTEF shall contain, among other things, a macro- economic framework setting out the macro-economic projections for the next three financial years, the underlying assumptions for these projections and an evaluation and analysis of the macro- economic projections for the preceding three financial years.”

    Lasun however said the leadership of the National Assembly has been in a series of meetings with the Executive in a bid to ensure the expeditious passage of the .2018 budget.

    He revealed that the two arms of government had met on Monday, Tuesday and would possibly meet today Wednesday  to smoothen grounds for a seamless passage of the appropriation bill.

     

     

  • Buhari may present 2017 budget December 1

    Buhari may present 2017 budget December 1

    …MTEF unrealistic, Senators insist

     

    President Muhammadu Buhari may present the 2017 Appropriation Bill to the joint session of the National Assembly on December 1, 2016.

    Senate Minority Leader, Senator Godswill Akpabio, gave the hint Wednesday while contributing to the debate on the 2017 to 2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

    Akpabio said that the Senate President, Abubakar Bukola Saraki on Tuesday made reference to the fact that the President Buhari may be coming to the National Assembly to submit and read the 2017 budget on 1st of December 2016.

    The information came as the Senators overwhelmingly described the MTEF and FSP as largely unrealistic.

    The lawmakers took turns to tear the MTEF and FSP to shred rooting for the fiscal document to be returned back to the Presidency.

    Saraki saved the day by appealing to his colleagues that though the assumptions and estimates in the MTEF were largely incorrect they remained assumptions and estimate.

    The Senate President noted that it was the responsibility of the Senate to work on the document and use its capacity to produce a realistic document.

    Akpabio said, “We can see that we don’t have a perfect document in our hands but of course we are looking at assumptions and assumptions may not necessarily be correct. I want to suggest that we send it to the committee. Of course, the committee will invite the relevant agencies and ministries of government.

    “They will come up with a more realistic MTEF/FSP because I believe also that looking at the date that this was submitted to the Senate, (4th of October) and we are debating it today on the 23nd of November. So, a lot of indices must have changed. Wednesday, you made reference to the fact that the President may be coming to the chambers to submit and read the 2017 budget on 1st of December.

    “If that is the case and we send this (MTEF) back and wait for it to come and debate it, it means that we will not be able to meet that deadline. But if we send it to the committee level, they may come up with something within the next three days that will be much realistic.”

    So, my appeal will be that the committee members should take into cognisance all the submissions and observations made today; so that we can come up with a more realistic MTEF and FSP.
    The Medium Term Expenditure Framework and the Fiscal Strategy Paper is proposing a budget that will be predicated on an oil revenue benchmark of $42.5 per barrel for the period 2017 -2019.

    The non-oil revenue for 2017 -2019 is guided by the improved efficiency of collection and expected growth in non-oil GDP, and accordingly customs collection, Companies Income Tax, Value Added Tax and FGN Independent Revenue are non-oil sectors the government is expecting revenue from in 2017.

    The proposal also shows that the government is projecting a 3.02% GDP growth in 2017, while inflation is expected to moderate at 12 ‚92%.

    The GDP growth would be driven by strong performance in agriculture, wholesale and retail, construction and real estate sectors ‘ among others.

    Similarly, the GDP growth for the medium term is based on the assumptions of average oil production of 2.2mbpd‚2.3 mbpd and 2.4mbpd for 2017,2018 and 2019 respectively with average benchmark oil price of USD42.5pb,USD45pb‚ and USD50pb for 2017,2018 and 2019 respectively as well as an average exchange rate of N290 per dollar. It is also based on an average growth rate of 9.69% during the period.

    Deputy Senate Leader, Bala Ibn Na’Allah who presented the MTEF noted that the document is designed to reposition the Nigerian economy from the shores of recession to a sustainable inclusive growth path.

    “The fiscal strategy for the 2017 -2019 MTEF / FSP therefore is framed to fundamentally restructure the economy for enhanced productivity, efficiency and accountability in the management of national resources with the intent of unlocking the real sector and private sector potentials for bolstering growth.

    “The focus of the 2017-2019 MTEF and FSP is the utilization of targeted spending in critical sectors that will translate into quick transformative capabilities and strong linkages with medium term development plans to achieve a more developed infrastructure base to stimulate real sector productivity, job creation and increased private sector investment.

    “The 2017 budget will be guided by six principles namely realism, credibility, allocative strategic, prioritization, transparency and accountability and social safety nets

    “The policy outline in the Medium Term Expenditure Framework and the Fiscal Strategy Paper are in line with the Change Agenda of this Administration,” Na’Allah said.

    The consideration of the fiscal document followed a closed session of the upper chamber during which senators were said to have attempted to persuade themselves not to throw out the document.

    It was learnt that the Presidency refused to rework the MTEF and FSP the Senate rejected on November 3rd, 2016.

    A reliable source said that “the same MTEF we rejected and returned to the Executive was sent back to us to consider. Nothing was changed, nothing was reworked, it was the same it was submitted in October.”

    Almost all the senators who contributed to the debate agreed that the projections in the MTEF/FSP were unrealistic.

    Chairman, Senate Committee on Finance, Senator John Enoh (Akwa Ibom Central) said the first thing to consider is the broad, the basic assumptions that are contained in the document including the assumptions of the daily oil production of 2.2 which has not changed from where it was in 2016.

    Enoh said, “I think with the backdrop of a lot that is happening in terms of oil production the government especially the executive arm has to put in place a proper engagements strategy in the Niger Delta if it hopes to achieve this because as I speak am sure we are losing on a daily basis more than 600,000 or 800,000 barrels a day.

    “If that is what we are doing and then we are predicating daily production in 2017 at 2.2 then the government needs to do quite a lot in terms of the oil price benchmark of $42.5.

    “Talking about the exchange rate of N290 when in spite of the exchange rate we have figures that rotates the upper limits into as much as N350 not minding what is happening in the parallel market

    “In looking at the 2017 projections, the one that is most startling in terms of the projections that has increased is bad. VAT in 2016 was about 1.2, 1.4 but in 2017 it was projected about 2 trillion and I think that there is no real basis if for example as at September VAT indicated just about 55 percent then why are you now increasing it by more than 1trillion.”

    Senator Solomon Adeola (Lagos West) in his contribution noted that by passing the MTEF, the Senate was giving the leeway to the President to present the 2017 budget.

    The lawmaker said that the first thing the Senate should have done was to consider and analyze the performance of the 2016 budget.

    Senator Adeola added, “Going through the document before us, I want to say that the Economic Team of the government is in disarray. The document before us is not realistic. We should return it for the Economic Team to rework.”

    For Senator Suleiman Adokwe, (Nasarawa South) the problem is the bureaucracy, who have a template they recycle every year.

    Adokwe lamented that it appears there is no economic blue print to get the country out of recession.

    Senator Mohammed Hassan (Yobe North) agreed the most of the assumptions in the document were unrealistic.

    Sentor Usman Bayero Nafada warned that if the MTEF was not well done, the 2017 budget would fail.

    He wondered why the Central Bank of Nigeria Governor, Godwin Emefiele would inform Nigerians that the exchange rate stood at N305 to one dollar while the government would sent a document containing N290 to one dollar.

    Senator Jibrin Barau (Kano North) said that Senate has the constitutional power to adjust the document as it deemed correct.

    Barau also said the assumptions were wrong.

    On his own Senator Dino Melaye (Kogi West) said “Mr. President, if we speak the truth, we would die, if we lie, we would die. So I have chosen to speak the truth and die.

    “I want to say this document that I have before me, this MTEF proposal and projections of the 2017 to 2019 is a lie. This document is not truthful, it is not honest, it is not transparent and it is not factual.

    “We want to know the level of compliance of the MTEF we passed last year and it is for three years, 2016-2018. What are the new amendments, Is this MTEF predicated on the loan that the executive is requesting to take. We want to know and that is not stipulated in this MTEF. We also want to know the whether the rate of N290 exchange rate per dollar is it realistic? Is this the truth. Governance is about the truth, it is about honesty, it is about transparency, it is about opening yourself to the people.

    “The GDP is going down and this MTEF document is telling me that it is going up. So, how do you corroborate this fraud. We should not be talking about deficit to GDP in realistic term we should be talking about deficit to revenue. How much of our revenue is being used in servicing our debts.

    “You need to tell us, we need to know that what percentage of our revenue you are allocating to servicing debts but that question is very, very painful to me because recently in international forum the minister of budget and planning blatantly displaying ignorance of not knowing even what the debt profile of the government is.”

    After the debate and appeal by the Senate President, the lawmakers agreed to refer the document to the joint committee on Appropriation, Finance and Budget and National Planning for further legislative action.

     

     

  • Senate faults Buhari’s MTEF

    Senate faults Buhari’s MTEF

    …Says proposal ‘empty’

     

    Barely two days after it rejected President Muhammadu Buhari’s bid to borrow $29.96 billion, the Senate Thursday faulted the president’s 2017 to 2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

    The upper chamber described the fiscal document which is a prelude to the presentation of the 2017 budget as “completely empty” not worthy of its consideration.

    Senate Leader, Senator Mohammed Ali Ndume, who tore the document into shreds, drew the attention of the Senate to a publication where the Minister of Budget and National Planning, Senator Udoma Udo Udoma reportedly blamed the National Assembly for the inability of the Presidency to present the 2017 budget in October 2016 as promised.

    Ndume who relied on Order 42 and 52 of the Senate Standing Rules, prayed the Senate to resolve to call Udoma to order.

    He noted that it was unfortunate that the Presidency had started once again the blame game that rubbished the 2016 budget.

    He said that it was wrong for the Presidency to give Nigerians the impression that the National Assembly was responsible for the avoidable delay in presentation of the 2017 budget especially when it was obvious that the MTEF submitted to the National Assembly was empty.

    The Senate Leader noted that when the leadership of the Senate discovered that the MTEF was empty, Udoma was invited to brief the leadership on grey areas of the MTEF/FSP on Tuesday.

    He said that the Senate leadership was stunned when Udoma failed to honour the invitation.

    He also said that the minister failed to submit vital documents the Senate requested from him.

    The Senate Leader who displayed a copy of the MTEF repeatedly said furiously,“ this document is empty, it is completely empty and you cannot build something on nothing.”

    Ndume said, “The report with the headline which says, “Budget 2017: Blame National Assembly for failure to meet to meet October target”.

    “The Minister of Budget and National Planning Udoma Udoma stated that the suspension of the debate of the MTEF/FSP which lays the foundation for the budget has stalled the Ministry’s plan to transmit the 2017 budget to the National Assembly.

    “As the Leader of this Senate and I am responsible for presenting communications, bills from the Executive. You will recall that we received the MTEF on 30th September. Instead of submitting it according to law not later than 1st of September, that is not even the problem.

    “I went through and the copies have been circulated. I talked to some experts. Even in this chamber, we have people that you can call experts. If you look at this document that they call MTEF, it is empty. And it doesn’t contain anything. If you have nothing how do you consider nothing?

    “Going through and knowing that it is empty, on October 19, 2016 I wrote to the Minister of Budget and National Planning. I crave your indulgence to highlight some of the contents and in the third paragraph, I stated: “To enable the Senate objectively review the MTEF from holistic perspective, we deem it necessary to invite you to a meeting to brief the leadership of the Senate on Tuesday 1st November. The minister failed to turn up.

    “Before then, I said you are requested to please send the following documents ahead of the meeting because that is what will make us have something to consider: draft copy of Medium Term Development Plan upon which the 2017 to 2019 MTEF is founded.

    “Secondly, I requested that a comprehensive report on the implementation of 2016 budget as of third quarter. And thirdly, fiscal rates taxes, charges etc used to derive the projected revenue.

    “Finally, a report on the structure, composition of the debt, funding, sources, how the borrowed funds are to be spent as well as repayment plan and schedule.

    “Up till now, there is no communication to that.

    “Finally, I have a copy of the request for approval of the Federal Government 2016 to 2018 external borrowing plan, which was thrown out last.

    “This is the document that we received. The first paragraph says: “I wish to refer to the above subject and submit the attached draft of Federal Government 2016-2018 External Borrowing (Rolling) Plan for consideration and early approval by the National Assembly to ensure prompt implementation of the projects”.

    “I don’t know whether the Senate President has the attached document that you did not circulate to us. But as far as I’m concerned there is no attachment here.

    “We cannot afford to start the 2017 budget process with this blame game. This Senate is Nigerian Senate. We have the opposition that is co-operating with us and we have the majority in this Senate.

    “So, it is not like we are working against the government but we know what we are doing. And we should do it right. When they bring nothing and we ask for something so that we will do it properly, they run to the newspaper to start blaming the National Assembly.”

    Also a copy of the letter dated October 19, 2016, and signed by the Leader of the Senate, Senator  Ndume, requested Udoma to submit some documents before the scheduled date of briefing the Senate leadership.

    Senate President, Abubakar Bukola Saraki, who appeared not to have found the unfolding development funny, informed the Senate that he personally called Udoma over the issue.

    Saraki said that the Minister has denied blaming the National Assembly for the delay in presenting the 2017 budget.

    He said that the Senate should be mindful of issues that could breed controversy ahead of the presentation of the 2017 budget.

    Saraki said, “I saw this article too. I had taken up the Minister and he denied the article. He said he was going to debunk it. Be that as it may, I think the matter should not be stressed.

    “The Leader has made the point that this issue of blame game is totally unnecessary. And if he (Udoma) said that he is withdrawing, that means he has said it as well that the National Assembly is not responsible for any delay.”

    Deputy Senate President, Senator Ike Ekweremadu, assured that the National Assembly was ready to receive the 2017 budget from the Presidency any day.

    Ekweremadu said, “Now that the statement has either been denied or withdrawn, we need to tell Nigerians the truth. We are here on a full job. We are ready to take the budget presentation anytime. In doing so, the executive must be reminded that everything must be done right. All arms of government must live to its responsibility. The issue of blame game should be put behind us.”

    Senate spokesperson, Senator Aliyu Abdullahi on his part, wondered “if this government is not padded with people who want to frustrate the government.”

    Senator Abdullahi also warned about the danger of starting the 2017 budget with controversy.

  • Senate receives 2017 MTEF

    Senate receives 2017 MTEF

    President Muhammadu Buhari Tuesday forwarded the 2017-2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the Senate for consideration and approval.

    Senate President, Abubakar Bukola Saraki read the memo containing the fiscal document on the floor of the Senate Tuesday.

    The MTEF and FSP lay the framework for the 2017 budget which members of the National Assembly are expected to debate and approve to pave the way for the presentation of the budget.

    President Buhari in the memo said that he is pleased to submit the 2017-2019 MTEF and FSP to the National Assembly.

    The memo read in part, “Let me use this medium to express my gratitude for the enduring partnership between the legislative and the executive arms of government.

    “In particular, I note with appreciation the commitment and support that distinguished senators have continued to demonstrate with respect to the preparation, passage and implementation of the federal budget.

    “Pursuant to provisions of the Fiscal Responsibility Act of 2007, the preparation towards the submission of the 2017 budget to the National Assembly is progressing well.

    “The MTEF and FSP which provides the framework for the development of the 2017 budget was designed against the backdrop of a generally advanced global economic environment as well as fiscal challenges in domestic economy.

    “In this regard the 2017-2019 MTEF and FSP articulates the Federal Government economic, socio and developmental objectives as well as the strategies for achieving this divine objectives and priorities.

    “I hereby forward the 2017-2019 MTEF and FSP to the distinguished Senate and trust that it will be kindly considered expeditiously and approved so as to move the 2017 Federal Budget process forward.”