The Senate yesterday reduced some subheads of the 2015 budget —no thanks to tumbling oil prices.
It demanded immediate submission of the details of the N360.94 billion Service Wide Vote, which some of the lawmakers described as nebulous.
This is contained in the 2015-2017 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP), which the upper chamber debated and adopted.
The MTEF and FSP are statutory requirements that must be submitted to the National Assembly for its consideration and approval prior to the presentation of the Budget to the National Assembly by the Federal Government.
The Federal Government voted N4.42 trillion expenditure for this year.
After an exhaustive debate of the MTEF and FSP, the Senate resolved that the total recurrent (Non-Debt) expenditure of the budget be reduced from N2,616.01 trillion to N2,584.08 trillion.
It also reduced the total Statutory Transfers from N411.85 billion to N363.27 billion. Details of the Service Wide Vote of N360.94 billion be made available to the parliament,” the Senate said.
The submission, it said, will enable the National Assembly to see areas to cut.
Specifically, recommended that there is no reason to include N63 billion for Presidential Amnesty Programme under the Service Wide Votes when there is a Ministry for the Niger Delta. The N63 billion vote should be moved to the ministry, it said.
The Senate said that the N22 billion provision for internal operations of the armed forces should be made under relevant ministry.
The Senate resolved that all sums provided as arrears of pension and gratuity should be reclassified from Service Wide Votes to relevant heads, adding that “henceforth, this general provision should be discontinued.”
The lawmakers reduced the total expenditure for the Subsidy Reinvestment and Empowerment Programme (SURE-P) from N102.50 billion to N21.03 billion due to the fall in price of crude oil. They demanded that the details of SURE-P projects to be executed should be attached to the annual budget estimates for approval by the National Assembly.
The Senate said non-oil revenue projection for 2015 budget be increased from N3,539,07 trillion to N4,024.11 trillion; the total Capital Expenditure should be increased from N633.53 billion to N700.78 billion.
The Senate also said the government should strengthen and consolidate its fiscal strategy to narrow the gap between projected and actual revenue for 2015-2017, curtailing oil theft and diversifying the economy to increase tax bases.
It said that the policy restricting government-owned enterprises expenditure to a maximum of 75 per cent of their gross revenue and automatically converts 25per cent of such revenue to government revenue is commendable and should be pursued with vigour.
The Senate directed the committees of the National Assembly to oversee the kerosene subsidy provision to ensure its full implementation, availability and accessibility.
The senate warned that if policing kerosene subsidy is difficult, “then we should do away with kerosene subsidy”.
Other salient resolutions of the Senate include that crude oil production of 2,278.2mbpd, 2,327.1mbpd and 2,406.7mbpd for 2015, 2016 and 2017 be approved.
That the exchange rate of N190/$1 for 2015 should be approved as proposed.
The price of $52 per barrel of crude oil as benchmark for 2015 budget be approved against the $65 per barrel projected.
The Senate is of the view that the reduction in the provision of subsidy payment for PMS from N971.14 billion in 2014 to N200 billion in 2015 are not indication of plans to alter the government’s subsisting policy on subsidy on petroleum products but based on the projected lower crude oil price in the international market.
It added that the kerosene subsidy provision in the MTEF and FSP, which was as a result of the recent investigation by the Senate Committee on Finance of the alleged unremitted $49.8 billion, is a welcome development.
It said that kerosene subsidy in the previous years was not appropriated by the National Assembly but now included in the MTEF/FSP.
The increase of non-oil revenue from the proposed N3,539.07 trillion to N4,024.11 trillion is meant to shore up revenue shortfalls resulting from the recommendation of a lower benchmark.
The Senate resolved that in order not to crowd out the private sector from domestic credit market, N665 billion of the N882.12 billion, borrowing for 2015 will be sourced externally at a lower interest rate.
It said that the 2015 new borrowing should be pegged at N88.12 billion with N217.12 billion coming from domestic sources and N665 billion from external sources.
Senator Ita Enang (Akwa Ibom Northeast) noted that the Senate should be concerned about the monies from non oil sectors.
Enang said: “The Minister of Finance, Dr. Ngozi Okonjo-Iweala, who is a proponent of the Fiscal Responsibility Act, is not seeing to the implementation of that Act. Solid mineral sector should by today generate revenue for the country, given the appropriation for the sector over the years.
“Part of our responsibility is to ensure passage of the Petroleum Industry Bill.
“ The PIB is one of the areas that should stabilise the economy for investors to put more money. Now the investors are going to Angola because they said the oil climate in Nigeria is not certain.
“By 4th of June, the life of this Assembly will end. If we do not pass the bill, we are responsible for the instability of the non-oil sector.
“No country trades on its own currency. We have consciously devalued the exchange rate from 160 to 190 and it is official currency trafficking.”
Summarising the debate, Senate President David Mark said: “What this clearly shows is that we all have to tighten our belts across the entire sectors of this government.
“We have for many years relied on oil as the main source of our revenue and I know that budget after budget, we say we will diversify the economy.
“Every time this budget comes, we are still repeating the same thing. The impression I get from it is that those who are responsible for producing the draft merely go there and reproduce what they have been bringing up.
“I think they need to do a little more; they may not be able to forecast accurately.
There are a few things I think we must get right; the first thing is, let there be a cut across board, the executive, the judiciary and the legislature and we are prepared to lead in this.
“The areas of leakages we must emphasise on them; the revenue generation and collection; we must make sure that we tighten our belts.
“What has impressed me in the entire discussion and the debate is the fact that this has been non-partisan; everybody has been very fair.”
