By Abdullateef Salau, Balarabe Alkassim & Francis Arinze Iloani
Some committees in the Senate and House of Representatives will on Thursday begin consideration of the revised 2020 budget proposal transmitted to the National Assembly by the Executive. Though the Senate had proceeded on a two-week Sallah break, the leadership of the Red Chamber on Wednesday assured that the development will not in any way affect deliberations on the revised budget proposal.
Recall that both the Executive and the Legislature last year agreed on reversing the national appropriation to start in January and end in December.
To this end, formalities in respect of the 2020 budget were concluded before the end of 2019. However, the outbreak of the COVID-19 coupled with dwindling oil revenue for the government changed the whole ambitious projections of the 2020 Appropriation Act of the federal government. President Muhammadu Buhari on Wednesday transmitted the revised budget to the National Assembly for consideration and approval.
The new fiscal document was delivered to the Senate President, Ahmad Lawan, by the presidential aide on National Assembly (Senate), Senator Babajide Omoworare, at the National Assembly on Wednesday, sources told Daily Trust. Omoworare did not respond to enquiries as of the time of filing this report.
But Presidential Liaison in the House of Representatives, Umar Ibrahim El-Yakub confirmed to Daily Trust that the Green Chamber had received the revised 2020 budget and the Medium Term Expenditure Framework (MTEF) from the Executive. “Yes, it was submitted yesterday (Tuesday). The document was submitted to the House late after the plenary. I submitted it yesterday but the Senate received theirs today (Wednesday),” he said. The N10.59 trillion 2020 budget passed by the National Assembly in December last year was slashed to N10.52 trillion, a difference of about N71.5 billion.
The Minister of Finance, Budget and National Planning, Zainab Ahmed had last week after the virtual Federal Executive Council (FEC) meeting said that as the government cut the size of the budget, new expenditures were also added to enable it adequately respond to the COVID-19 pandemic. Ahmed said while the federal government will fund the budget by N5.158 trillion, the deficit from N5.365 trillion will be financed by both domestic and foreign borrowing. A top source at the Senate who preferred not to be named said the Senate president had asked members of the Senate Committee on Appropriation, chaired by Senator Barau I. Jibrin, to immediately commence work on the document. It was also gathered that relevant committees will immediately commence interaction with ministers on the document.
Lawan had before closing the plenary for the Sallah break assured that the Red Chamber would be ready to consider the revised 2020 budget if sent to it by the Executive during the break. He said: “Once we receive the 2020 budget cut from the Presidency in the course of the Sallah break, we will circulate it among all the senators and also give them one or two days to study the document before we will now reconvene and consider the revised 2020 budget estimates.”
Details of the revised 2020 budget
At a meeting with National Assembly leadership last week, the finance minister gave the details of the revised fiscal document. The finance minister stated that the crude oil benchmark price was slashed from US$57 per barrel to US$25 per barrel; while crude oil production benchmark was reduced from 2.18 million barrels per day to 1.9 mbpd. She added that the federal government also adjusted the budget exchange rate to N360/US$1; and reduced the upfront fiscal deductions by the Nigerian National Petroleum Corporation (NNPC) for mandated oil and gas sector expenditures by 65 percent from N1.223 trillion to N424 billion.
She disclosed that the amount available for funding the 2020 budget is now estimated at N5.548 trillion, down from N8.419 trillion, a revised revenue estimate, which is 34 per (N2.87 trillion) lower than what was initially approved. Federal government’s aggregate expenditure budget was slashed by N88.412 billion; statutory transfer from N560.47 billion to N397.87 billion; and overhead costs of ministries, departments and agencies of government from N302.43 billion to N240.91 billion. Debt service provision was, however, increased from N2.453 trillion to N2.678 trillion.
Budget revision will not affect Jan-Dec cycle
An economist, Chijioke Okechukwu, said yesterday that the revision of the 2020 budget by the executive to reflect the realities of the effect of the coronavirus pandemic on the economy does not affect the January-December budget cycle, which Nigeria started this year. He said that the revision merely involved changes in the value and key benchmarks and not implementation timeline.
Okechukwu, a former Director-General of the Abuja Chamber of Commerce and Industry (ACCI), said the budget would continue to run its course up to December, 2020.The economist said the federal government can still maintain the January-December budget cycle by expediting action on the 2021 budget to get it passed through the National Assembly on time. The expert said the revision done on the 2020 budget includes a reduction in oil price and oil production benchmarks to reflect current realities. However, he raised concerns with the reduction in the overall value of the budget, adding that the budget should have been further cut to match a drastic reduction in the current federal government’s revenues.
Culled from Daily Trust