PRESIDENT Goodluck Jonathan is to present the 2013 budget to the joint session of the National Assembly today. This is coming six days after the initial scheduled date of October 4.
The shift in date was agreed upon to allow the House of Representatives analyse the 2013-2015 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) in order to take a proper position on the projections and assumptions on which the 2013 budget was based.
The presentation, which is slated for 10am, is coming on the heels of the simmering friction between the House and the Executive over the slow implementation of the 2012 budget.
Also, the proposed $75 benchmark per barrel of crude in the 2013 budget, it is argued, would create a further ground for disagreement, as the House has underlined its resolve to jerk the figure by $5, raising the new benchmark for the 2013 appropriation to $80.
The House agreed to admit the President into the Green Chamber via a joint sitting with the Senate, sequel to a motion by the House Leader, Mulikat Akande-Adeola, yesterday.
On the eve of the budget presentation, the House yesterday admitted, debated and adopted the report of the Hon. Jubrin Abdulmumin Joint Committee on Finance, Legislative Budget & Research, National Planning & Economic Development, and Aids, Loans and Debt Management on the 2013-2015 MTEF and FSP.
The Committee of Whole House adopted the recommendations of the report of the joint committee, wholesale.
In the report, the lawmakers accused the Executive of overstating its expenditure profile and understating its revenue projection in an attempt to hoodwink the National Assembly.
“It is observed that Non- debt recurrent expenditure of N2,411.486 trillion for 2013 is overstated by N166.695 billion in 2013 and N146.696 billion in each of 2014 and 2015. The projected capital spending of the Ministries, Departments and Agencies (MDAs) is also overstated by N20.0 billion in 2013, 2014 and 2015,” the adopted document alleged.
The joint committee’s report covered most of the assumptions on which the President’s 2013-2015 MTEF and FSP is based, signalling that a re-enactment of the imbroglio that characterised the implementation of the 2012 budget may snowball into the 2013 budget as well.
The lawmakers took on the Executive in the areas of debt profile/debt sustainability, budget deficit financing, projected revenue/aggregate expenditure (especially non-oil revenue projections) benchmark, daily production of crude oil and the Excess Crude Account
The report observed that “Nigeria total external debt stock rose from an average of $3.639 billion in 2006-2008 to $6.0 billion in June 2012. Of this, the federal government’s share was $3.8 billion (68.3 percent) while the 36 states and FCT accounted for the balance of $2.2 billion (36.7 percent). Similarly, domestic debt for the same period stood at N6.15 trillion bringing the total debt to N7.11 trillion, which is 17 percent of GDP.
“The increasing trend in total debt is increasingly becoming worrisome as it imposes a heavy burden on the government. This is against government’s position that the debt burden is sustainable, being below the international threshold of 40percent of GDP.”
The Chairman of the joint committee Jubrin Abdulmumin while briefing the House at the committee of whole accused the Executive of lack of transparency in the preparation of the document, adding that the intent of those that prepared the document was meant to deceive the National Assembly.
He said the argument of the Executive that an increase in benchmark is detrimental to the economy of the country and will cause inflation as well as put pressure on the exchange rate does not hold water.
According to the committee’s report “many submissions from various government agencies were at variance with estimates in the 2013-2015 MTEF and FSP implying that the process of,preparation may not have been all inclusive as it ought to be in line with Section 13 (2 b) of the FRA 2007.’
Abdulmumin said: “The MTEF is not a document of all inclusive consultation, a few people in the Ministry of Finance, the office of the DG Budget and a few personalities sat down and wrote the MTEF.”
He further stated: “One of the biggest issues in the daily production of oil. For all the decades that we’ve been producing oil, no one knows the amount of our daily production. We asked the Governor of the Central Bank of Nigeria, he said he doesn’t know, the Mininstrymof a finance does not know and the NNPC does not know.
“In this era of technological development, we don’t know the volume of oil we produce, what kind of country are we running?’
The lawmaker told his colleagues that contrary to the usual impression given by the executive that oil accounts for 90 per cent of the nation’s income, “oil accounts for 68 per cent and non oil accounts for 32 per cent of our income. By 2015, non oil will be accounting for 50 per cent.”
He said it was unacceptable that people will be using arguments of Foreign analyst who have no idea of the realities in the country to project the nation’s budget.
“It is when some people claim a monopoly of of knowledge that we will have problems. If we take the assumptions in the MTEF presented by the President the way it is, we will continue to have problems. But if we want a different result from what obtained in 2011 and this year, we need to do things differently.
“Why are they against an increase in the benchmark. They painted a gloomy picture in the MTEF. The MTEF took it to the extreme. But they will not tell you there is volatility in the Middle East and Sudan and that the American economy is improving and this drive up oil prices. It does not hold water for them to say there is crisis in the Euro zone”, he said.
Some of the key recommendations
• The revenue target of the Nigeria Customs Service should be increased to N1, 018 trillion, N1,155.700 trillion and N1,388.345 trillion in 2013, 2014 and 2015.
• Accruals for the sharing of the Stabilisation Fund Account (ECA) should be estimated, as the Fiscal Strategy Paper (FSP) did not project the medium Term accruals.
• The sustenance of peace in the Niger Delta should be given priority, attention and prominence, in order to guarantee uninterrupted production of crude oil
• Government should demonstrate fiscal discipline by limiting spending to the level of its resources. The proposed deficit of N1, 037.19 trillion should be further reduced to N663.328 billion by using the earnings resulting from the increase in the crude oil benchmark, privatisation proceeds and Nigeria Customs Service. This should reduce domestic borrowing from the proposed N727.19 billion to N243.33 billion.
