President Goodluck Jonathan will today present the 2015 budget proposal of N4, 357.96 trillion to the National Assembly.
President Jonathan in a letter to both the Senate and the House of Representatives which was read on the floor of the two chambers also showed a revision of the oil benchmark from the initial $73 per barrel to $65 per barrel.
President Jonathan informed the National Assembly that the Minister of Finance, Dr. Ngozi Okonjo-Iweala will lay the budget estimate on the floor of the Senate. This is the second time the Minister of Finance will be presenting the national budget to the National Assembly on behalf of President Jonathan. The first time the development was recorded in the history of Nigerian national budget presentation was last year when the President delegated his power to the Minister to represent him.
According to the revised budget estimates, N627.16 billion will be spent on capital expenditure which includes N380.70 billion for the Ministries, Departments and agencies; N144.42 billion will be capital expenditure in statutory transfers and N102.03 billion for the Subsidy Re-investment Empowerment Programme, SURE-P.
A total of N2,622.42 trillion was earmarked for the recurrent expenditure which also includes personnel costs for MDAs that stands at N1,801trillion, Overheads, N216,56 billion, pensions N228,81 billion and N376.05 billion budgeted for other service wide votes.
Service on domestic debt is expected to gulp N894.61 billion while that of foreign debt will take N48.39 billion.
President Jonathan had earlier in October, presented to the National Assembly a budget proposal of N4.817 trillion with the oil benchmark put at $78 per barrel. It was later cut down to N4.7 trillion with the benchmark at $73 per barrel. The President has now for the third time revised the oil benchmark to $65 per barrel with the total budget size of N4.4 trillion against N4, 724.69 trillion budgeted in 2014.
Besides, the previous budget estimate had N1, 208.37 trillion for capital expenditure but it has been reduced to N627.16 billion which the President explained was as result of the sharp reduction in global oil price while the recurrent expenditure remained N2, 622.42 trillion.
The budget, going by the Medium Term Expenditure Framework, MTEF, and the Fiscal Strategic Paper, FSP, was also predicated on the production of 2.2782mbpd for 2015, 2.3271 mbpd and 2.4067 mbpd for 2016 and 2017 respectively.
On the revision of the MTEF, FSP, President Jonathan explained that “given further developments in the international oil market which have necessitated further revisions, amendments have been made to some parameters as well as to some fiscal estimates in the MTEF.
“I hereby forward copies of the revised 2015-2017 MTEF for the kind consideration of the distinguished members of the Senate and hope that it will be considered and approved expeditiously in order to bring 2015 Federal Government of Nigeria budget preparation process to a quick closure.”
On the authority letter for the Minister of Finance to lay the budget estimates, he said: “In consonance with the provision of Section 81 Sub-section 1 of the constitution of the Federal Republic of Nigeria 1999 as amended, I write to request that the Distinguished Senate grant the Minister of Finance the slot of 11 am on Wednesday December 17, 2014, to enable her lay before you the 2015 budget estimates.”
President Jonathan in his letter said: “I am cognizant of the fact that the budget estimates are being presented before the passage of 2015-2017 Medium Term Expenditure Framework, MTEF. This is due to the extra-ordinary global circumstances that confronted us in the latter quarter of the 2014 fiscal year.
“As you know, the first MTEF with the budget benchmark of $78 per barrel was submitted to the National Assembly on September 30, 2014, and discussion on the MTEF and budget construction based on those estimates began with the relevant Committees of the National Assembly.
“However, shortly after that first submission, oil prices began to fall precipitously leading to a revision of the oil benchmark price in the MTEF to $73 per barrel which was resubmitted to the National Assembly on November 18, 2014.
“Following this, the decision of OPEC (Organisation of Petroleum Exporting Countries) on their meeting in Vienna on November 27, 2014, not to cut production to support the price led to further precipitous fall in the oil price to below $70 per barrel.
“This led, one more time to another downward revision of the benchmark price to $65 per barrel and the revised MTEF which was again submitted to you on December 2, 2014. The uncertainty surrounding the global price of crude oil and its continuous fall has occasioned delays in both the submission of the final MTEF and budget estimates and we thus request your kind consideration of both these items together in view of our national budget calendar.
“We would like to confirm that having submitted these budget estimates, we are not proposing further revision of the oil benchmark price. Though prices continue to be extremely volatile and trend further downwards, there are indications based on price intelligence we have this time that prices may range between US$65-US$70 per barrel in 2015.
“Nevertheless, we will like to emphasize that there is no iron clad guarantee where oil prices are concerned due to numerous underlining global geo-political factors that are outside our control and unpredictable.
“Should prices fall below the range; the country would have to make further adjustments. We hope that despite these circumstances, the Distinguished Senators will give kind and due consideration to the budget estimates in sufficient time for us to implement the 2015 budget starting early next year.”
At the House of Representatives, immediately the Speaker, Aminu Tambuwal finished reading the president’s letter, the Minority Leader, Femi Gbajabiamila raised a Point of Order, telling the House that it was out of known traditions since the history of the budget presentation in Nigeria for the president to keep doing the ritual by proxy.
He said that the practice prior to now and the world over had been for the president to lay the budget before a joint session of the Legislature, saying “it has been the practice of the parliament over the years the world over”.
He argued that “a situation where the President is given the liberty to send his aides to present the nation’s budget which is the most important fiscal document is setting a bad precedent before the international community.”
But in what appeared to be a swift riposte to Gbajabiamila’s remarks, Deputy Majority Leader of the House, Leo Ogor cited the provisions of Sections 68 and 81 of the constitution, saying that the president was not compelled by the provisions to lay the budget in person. “I rely on the provision of the constitution which is supreme. The constitution did not stipulate that the president shall lay the budget before the House. So, the issue is totally inconsequential. This is not the first time the Finance Minister is laying the budget before the House”, Ogor said.
At this juncture, Tambuwal waded into the matter, reminding the opposition leader and the general House that his knowledge and understanding of the relevant provisions of the constitution on budget presentation was that the President was not mandated to lay the budget himself if he had chosen otherwise.
The Speaker, at this juncture, ruled Gbajabiamila out of other.
“Honourable members, I do not think we should debate this matter. To my understanding of the provision, there is nowhere this provision stipulates that the President shall personally present the budget. Of course, traditions may be respected. Therefore, under this basis, I want to rule you out of order.” Tambuwal hit the gavel.
Meanwhile, amid the moving of the motion by Leo Ogor to suspend the relevant sections of the House rules to accommodate the laying of the budget today came a shout of Point of Order by Ali Madaki, (Kano State, APC).
Recognized by the Speaker, Madaki said that it was not in the nature of the House according to its rules to allow for the presentation of the national budget on the floor of the House before debating and approving the MTEF.
“It is the rule of this House that we must approve the bench mark before seeing somebody to lay the budget. We are going against the rules”, he echoed.
This, again, prompted the Speaker to speak in defence of the novel practice.
He said: “Honourable members, if you listened to the letter of Mr. President, he admitted that we ought to have approved the MTEF before receiving the budget. My plea is that we will first deal with MTEF before attending to the budget. That is my plea, please. We have received the MTEF. I plead that we receive the budget.”
Having succeeded in convincing his colleagues, Tambuwal then asked the deputy minority whip of the House, Samson Osagie to second Ogor’s motion. – Vanguard.
