Retains $38 oil benchmark, adopts N197 per dollar
· Interior Ministry gets lion’s share of N451.9bn
The National Assembly on Wednesday passed the 2016 Budget after slashing it to N6,060,677,358,227.
The two chambers of the National Assembly removed N17 billion from the initial sum of N6,077,680,000,000 proposed by President Muhammadu Buhari.
The lawmakers said that they reduced the aggregate expenditure and consequently scaled down the total recurrent, deficit and borrowing plan of the Federal Government in financing the budget.
The reduction in this year’s budget, according to the report of the Joint Senate and House of Representatives Appropriation Committees, stemmed from the overhead and recurrent expenditure due largely to some inconsistencies arising from the allocations to the Ministries, Departments and Agencies (MDAs) of government.
The budget is predicated on a revenue projection of N3.86 trillion resulting in a deficit of N2.22 trillion.
A breakdown of the budget revealed that it was predicated on a benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day for 2016; Statutory Transfers-N351,370,000,000 with a Capital Expenditure of N1.6trn which is a sharp departure from the N557 billion earmarked for Capital Expenditure by the last administration in 2015; Fiscal Deficit 2.2trn, a Debt Service-N1.5trn and a Deficit /GDP 2.14 percent.
(a) Recurrent (Non-Debt) expenditure -N2.6 trillion (b) Foreign and domestic debt servicing – N1.4 trillion.
A further breakdown of the budget shows that the Ministry of Interior got a lion’s share of the sum of N451.9 billion to top the table, followed by the Education Ministry with the sum of N367.7 billion while Defence played third with the sum of N312.2 billion.
Allocations made under statutory transfers include: N70,000,000,000 for National Judicial Council; N41,050,000,000 for Niger Delta Development Commission and N77,110,000,000 for Universal Basic Education (UBE).
Others are N115,000,000,000 for National Assembly; N2,000,000,000 for Public Complaints Commission; N45,000,000,000 for Independent National Electoral Commission (INEC), and N1,210,000,000 for National Human Rights Commission.
The Senate approved the budget sequel to the consideration of the report of the Committee on Appropriations, which was laid before the Chamber on Tuesday.
In his highlights on the budget report before its clause by clause consideration, the Chairman of the Appropriations Committee, Senator Danjuma Goje, noted that the Committee adopted the benchmark of $38 per barrel of crude oil, 2.2000mbpd oil production and N197/US$1 as proposed by the executive arm.
Goje said that the Committee, in the course of its work on the budget, observed that the 2016 Appropriation Bill, which was the first by the President Buhari’s administration, was not presented on time to the National Assembly, noting that it also affected the timely passage of the bill.
The Committee also observed that the Appropriation Bill was fraught with some inconsistencies from the MDAs, resulting in the emergence of different versions of the budget.
Goje said that this development was strange and went against proper budgetary procedures and processes, with attendant negative implications on the handling of the money bill.
The Committee further recommended that there should be proper engagement in the future between the Budget Office of the Federation and the MDAs on budget contents in order to avoid a disconnect in processing of budget proposals.
It also urged government to endeavour to increase and diversify its revenue generation streams, given the yawning gap between collectible revenue and actual collections.
The Committee also advised that the recurrent component of subsequent budgets should be reduced, while the capital components should be increased, so it can deliver the capital thrust of the budget to the people.
However, reacting to the observation of the Appropriations Committee that there were some gaps in the allocations made to some MDAs, the Deputy President of the Senate, Senator Ike Ekweremadu, expressed concern that such loopholes might pose a serious challenge to the successful implementation of the budget.
He suggested that it should be addressed by the National Assembly before final approval was made on the document, to avoid creating avoidable problems in the course of implementation.
He said: “I am a bit worried about the observation made by Senator Goje as contained on page five of the report, which says the 2016 Appropriation Bill contained a number of omissions, particularly in the area of personnel cost. Though the appropriation committee has filled some of the gaps, there are many outstanding cases which could raise serious concerns in the course of the year.
In his remark, Senate President Abubakar Bukola Saraki, noted that what is unique about this exercise was that for once there was no bickering over benchmark, rather the lawmakers devoted time and energy to ensure that the parliament had a budget that is implementable.
After approving the budget, the Senate adjourned plenary to April 12, 2016, to enable the lawmakers enjoy their Easter recess
Meanwhile, while briefing journalists on the passage of the 2016 budget, Senior Special Assistant (SSA) to the President on National Assembly Matters (Senate), Senator Ita Enang, thanked members of the National Assembly for doing a good job and passing the budget despite the challenges it faced.
The presidential aide said that both the Committees on Appropriation were in touch with the Minister of National Planning, Finance, as well as other ministers who they had to seek clarification from.
Saraki also tasked the various standing committees of the National Assembly to ensure full implementation of the 2016 Budget through effective use of their oversight duties.
He also pledged that the Senate would immediately commence the amendment of the Public Procurement Bill currently before the National Assembly as a way of aiding the effective implementation of the budget.
Saraki said: “The budget reflects efficient and equitable allocation of resources to reduce the challenges that we are all aware of. This budget is a product of bipartisan engagement, commitment and patriotism.”
2016 Budget Highlights
Projected Revenue: N3.86 trillion
Statutory Transfers – N351.37billion
Capital Expenditure – N1.6trn
Recurrent (Non-Debt) Expenditure – N2.6trillion
Foreign and domestic debt servicing – N1.4trillion
Interior – N451.9billion
Education – N367.7billion
Defence – N312.2billion
NJC – N70billion
NDDC – N41.050billion
Universal Basic Education – N77.110billion
National Assembly – N115billion
Public Complaints Commission – N2billion
INEC – N45billion
NHRC – N1,210,000,000