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.