SAN FRANCISCO, September 25, (THEWILL) – The Senate on Wednesday directed its Committees on Finance and Appropriation to analyse the 2014-2016 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) and forward it for formal debates.
The committees were given two weeks to submit their report.
Debate on the MTEF/FSP was deferred during the plenary following arguments by some Senators led by Senator Enyinnaya Abaribe (PDP, Abia) that the document was critical to the 2014 budget and deserves proper scrutiny.
In lead debates, the Senate Leader, Victor Ndoma-Egba (SAN), informed his colleagues that the MTEF/FSP formed the fiscal foundation and basis for the 2014 budget.
He urged the Senate to approve the document in order to enable the
executive make good preparation for the 2014 budget.
Senator Abaribe had suggested that the document be forwarded to the relevant committees to study and present their analyses to guide the debates.
He observed that it would not be proper for the Senate to rely solely on the figures presented by the executive.
“I am of the view that our committee on finance should have looked at this document and give us their own insight into these figures.
“We cannot just rely on the statistics coming from the executive,” he said.
Sen. George Akume (Benue/APC) said the document was flawed because it did not contain inputs by relevant agencies as required by provisions of the Fiscal Responsibility Act (FRA).
He insisted that the Senators must have a good understanding of the fiscal issues raised in the MTEF to ensure that a robust debate is carried out on the document.
“This is a very important document but from the lead debate adequate consultations were not done before it was prepared.
“This document is flawed and should be reworked by the executive before sending it back to us. If this is done, the relevant agencies listed in the FRA will be consulted to make inputs into the document,” Akume said.
The Senate President, Sen. David Mark, ruled that it was best for the relevant committees to scrutinise the document for any shortcoming and bring it back for debates.
Mark noted that a lot of issues still needed to be addressed to enable the Senators carry out a robust debate on the document.
“Let the committees on Finance and Appropriation go and study the document and bring out the issues for us to debate. It is for the committees to go and fish out the shortcomings and bring it back as a more prepared document because this document is as important as the budget,” Mark stated.
The 2014-2016 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) submitted to both arms of the National Assembly – Senate and House of Representatives – has fixed crude oil benchmark for the yet-to-be-presented 2014 budget at $74 per barrel.
For debt service, the 2014-2016 MTEF/FSP submitted by President Goodluck Jonathan earmarked N663.6 billion and N48 billion was earmarked for domestic and foreign debt service respectively, totaling N712 billion.
Under the “Federally Collectible Revenue” category, the Federal Government is projecting to earn N10,519 trillion for 2014. A breakdown reads: Gross oil revenue (N6,814 trillion), Gross non-oil revenue (N3,288 trillion), non-federation account levies for targeted expenditure (N250.0 billion), education tax (N156 billion) and National Information Technology Development Fund (N9.390 billion).
It could be recalled that the oil benchmark price of $75 per barrel arrived at for the 2013-2015 fiscal year’s was subject of intense horse trading between the executive and the National Assembly. A $79 per barrel oil benchmark was later agreed for the 2013 budget.
The 2014-2016 MTEF/FSP signaled increasing threat to Nigeria’s crude oil revenue from emerging competitors – global and regional – vis-a-vis dwindling demand for Nigeria’s crude oil, chiefly by the US.
“New regional producers, including Ghana, Cote d’ Ivoire, Liberia and Uganda are adding to the supply such that previous importers of Nigerian crude oil are now producing and exporting oil. Although India and China are presently making up for the falling US demand, these developments suggest that there could be significantly lower demand for Nigeria’s crude oil over the medium to long term, and thus, suggests the need for more prudence in managing our available resources,” the document read.
Jonathan in his letter dated September 12, 2013 to the Senate President, David Mark, said the planning documents were prepared against the backdrop of global economic uncertainty.
“The developments towards preparation of the 2014 budget have culminated in the 2014-2016 MTEF and FSP. Prepared against the backdrop of global economic uncertainty, the 2014-2016 MTEF and FSP reflect the reality of our circumstance; and will ensure that planned spending is set at prudent and sustainable levels consistent with government’s overall medium-term developmental objectives,” Jonathan’s letter read.
BY EMMA UCHE, ABUJA
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