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Senators Say 2018 Budget Projections Are Unrealistic

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Senators Say 2018 Budget Projections Are Unrealistic
November 29, 2017
• Want oil benchmark raised to $50
• House berates poor implementation of 2017 capital vote
James Emejo and Damilola Oyedele in Abuja
Debate on the N8.612 trillion 2018 Appropriation Bill opened Tuesday in both chambers of the National Assembly with senators faulting some of its projections, describing them as unrealistic.
Specifically, some senators called for an upward review in the crude oil price benchmark from $45 per barrel to about $50.
Many of them, as well as some members of the House of Representatives, also expressed their reservations over what they called the abysmal implementation of the N1.2 trillion capital component of the 2017 budget.
Opening the debate, Senator Enyinnaya Abaribe (Abia PDP) described the 2018 budget of consolidation as fictitious, saying it did not consolidate on previous budgets as claimed by the President Muhammadu Buhari administration.
His use of the word ‘fictitious’ however did not go down well with the Senate Leader, Senator Ahmed Lawan (Yobe APC), who said the description was not parliamentary, therefore, unacceptable.
Abaribe agreed to withdraw the word ‘fictitious’ but replaced it with ‘imaginary’ and maintained that the implementation of previous budgets of the administration was low.
He said: “I am just quoting the Senate Leader from his speech, which said the 2018 budget was designed to consolidate on the achievements of the 2016 and 2017 budgets. What was done in 2017 when less than 15 per cent of that budget was released? Nothing was done and that was why I called it (2018 budget proposal) fictitious. I am very sorry if that is the word he is bothered about. I will withdraw the word ‘fictitious’ and use ‘totally imaginary.”
Abaribe said the receivables (revenue) of the government were exaggerated, adding that the 2018 budget was predicated on assumptions that facts had already destroyed.
“The 2018 budget is already dead on arrival,” he stated.
Supporting Abaribe’s position, Senator Ben Murray Bruce (Bayelsa PDP) said the proposal was a budget of active imagination, with 25 per cent going to debt servicing.
“We have to decide what the exchange rate really is. Is it N305 (to US$1) or N365?” he asked.
Bruce maintained that the cost of governance in Nigeria remained high with agencies that had outlived their usefulness, and bloated workforce drawing overheads and salaries from the federal government.
“FRCN (Federal Radio Corporation of Nigeria) has 8,000 workers. Sell it to the staff. Who listens to the Voice of Nigeria (VoN)?” he asked.
The senator further said while the multi-billion dollar rail contract between the Ministry of Transport and a Chinese firm was a laudable one, the intricate details should be thoroughly examined by the Senate, to explore which parts can be handled domestically.
“We have steel, Ajaokuta is there. Why don’t we use that facility and create jobs through that,” he suggested.
Senator Gbenga Ashafa (Lagos APC) lamented that only N450 billion had so far been released for capital projects in the 2017 budget which lifespan was expected to expire soon.
The major challenges of the 2016 and 2017 budget had been funding, making them less impactful on the populace, he said.
According to him, “A budget can be big and bloated, but when you do not have enough funds for capital projects, which are more impactful, then the budget is going nowhere.”
He cited the case of the Federal Roads Maintenance Agency (FERMA) where only N800 million out of N25 billion had so far been released.
“What impact would that make on roads,” Ashafa queried, disclosing that only N500 million had so far been released out of the N11 billion budgeted for the Nigeria Railways Corporation (NRC).
Senator George Akume (Benue APC) advised that the oil benchmark be increased to $50 as crude oil had sold for around $58-$62 per barrel in the last one year.
This, he said, was necessary to avoid speculation in the international market.
Senator Francis Alimekhena (Edo APC) said the 2016 and 2017 budgets were bloated without impactful implementation.
He noted that the assumptions of about N2 trillion from oil revenue and N4 trillion from non-oil revenue are unrealistic, as the environment to provide such monies from non-oil sources had not been diversified.
He also suggested that the oil benchmark should be increased to $50 while output would be maintained at 2mbpd as proposed.
“There is no need to raise the hope of Nigerians and execution is zero. Let’s cut our coat according to our cloth. If the budget size is N3 trillion and execution is N3 trillion (100 percent), we will be happier than to say it is N8 trillion and execution is just N2 trillion,” Alimekhena said.
Presiding, Deputy Senate President Ike Ekweremadu said there was an urgent need to consider how to reduce the budget deficit.
He said: “I thank everyone for their contributions, I commend my colleagues for keeping their language clean and speaking their minds on the 2018 budget.
“Some research agencies are not researching anything and are still being funded, we need to point them out so we don’t spend money on them.”
The debate continues Wednesday.
House Berates Poor Implementation of 2017 Capital Vote
In the House of Representatives Tuesday, the Majority Leader, Hon. Femi Gbajabiamila (APC, Lagos), prepared the ground for the debate, appealing to members not to lose sight of the bigger picture in the 2018 budget especially in areas of economic diversification, job creation and infrastructural development even though there were obvious shortcomings in the proposed spending bill.
However, members did not mince words as they took turns and put aside party lines to express their disappointment over the dismal implementation of the 2017 budget, particularly the non-implementation of the N100 billion capital component earmarked for constituency interventions.
The lawmakers’ agitation was further buttressed by the submissions by key revenue generating agencies of government, including the Nigerian National Petroleum Corporation (NNPC) and the Federal Inland Revenue Service (FIRS) that they had respectively surpassed revenue targets for the year.
Members, as a result, expressed concern over the inability of the executive to implement the budget past the current 25 per cent mark especially when revenue appeared not to be a challenge.
Hon. Mohammed Tahir Monguno (Borno APC) said even though the National Assembly had been effectively playing its role in approving the previous budgets, their implementation by the executive continued to pose a major concern.
He said: “The National Assembly must tackle the executive on this dismal implementation track record.
“If we have surpassed oil and other revenue targets. We should have exceeded at least 60 per cent implementation of the 2017 budget by now.”
According to him, “If we don’t have constraints on revenue generation then why are we having challenges in implementation?”
He, however, commended the 2018 estimates for making provision for agriculture in line with government’s economic diversification objectives.
Monguno further raised the need for the legislature to beef up its oversight function to the letter so that Nigerians could enjoy the fruit of democracy.
Also, Hon. Yunusa Ahmad Abubakar (Gombe APC) said although the federal government ought to be commended for steering the economy out of recession even before the 2017 budget was fully implemented, the capital component of the proposed budget, which was almost at par with the recurrent portion left room for worry.
He argued that the capital vote ought to be much higher than recurrent spending to allow for the greater implementation of developmental projects.
Hon. Abubakar Chika Adamu (Niger APC) expressed worry over the direction of the economy in view of the rather high recurrent component of the proposed 2018 budget.
He further raised issues over the country’s increasing obligation towards debt service stressing that this was not good for the economy.
He argued that it was unlikely that a large budget would bring about development as real inflation was currently at 15 per cent and not the 12 per cent touted in the budget for next year.
Also contributing, Hon. Ibrahim Isiaka (Ogun APC) said he did not see anything in the 2018 budget worthy of moving the country forward.
He based his comments on the realisation that the executive had consistently failed to make allocations for critical projects that were of great economic value to the people.
He identified the hydropower station in Ogun State as well as other road projects, which though had been repeatedly appropriated for but never had capital releases for implementation.
He said despite claims by FIRS, NNPC of surpassing revenue targets, the level of implementation of the 2017 budget ought to have been gauged and the report made available to the National Assembly for scrutiny.

www.thisdaylive.com/index.php/2017/11/29/senators-say-2018-budget-projections-are-unrealistic/

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