Reduces benchmark to $70, pegs exchange rate at N155
Fixes deficit at N1.1 trillion
Reps probes govt's interventionist scheme
EVEN before the formal presentation of 2012 budget to the National Assembly for consideration, the Executive arm of government has reviewed some of the major elements in the Appropriation Bill.
The changes include the downward review of the budget benchmark from $75 to $70 per barrel, fiscal deficit of N1.1 trillion and exchange rate of N155 to the dollar.
The Director, Budget Office, Dr. Bright Okogu, made public the changes yesterday at an interactive session with the Senate Committee on Finance just as the Comptroller-General of Nigerian Customs Service (NCS), Abdulllahi Dikko alleged undue influence from some quarters on the operations of the agency.
Okogu said that although the oil benchmark for 2012 was put at $75 per barrel in the Medium Term Expenditure Framework (MTEF) forwarded by President Goodluck Jonathan to the National Assembly a few weeks ago, after further consultations with critical stakeholders, it had been discovered that it would not be realistic and therefore reduced to $70 per barrel.
"In the frame-work forwarded to the National Assembly, we put the oil benchmark at $75 per barrel but after consultations with stakeholders, we are likely to revise it to $70 per barrel. Most of the oil countries that had turbulence, the situation seems to be over," he said.
Okogu also hinted that the exchange rate being contemplated by the Executive in the new budget is now N155 to the dollar, Gross Domestic Product (GDP) 7.2 per cent and inflation rate of 9.5 per cent. He explained that these figures were arrived at after talks with the National Planning Commission (NPC).
He put expected revenue from privatisation at N10 billion, explaining that in view of the past experience where some agencies slated for sale could not be disposed off, there was need for "caution." He added that fiscal deficit had been put at N1.1 trillion and charged government's agencies to sit up to make the budget a reality.
On the country's domestic debt profile, Okogu said an arrangement had been made to reduce it to about N500 billion. "The issue of local debt is now causing a lot of concern. The programme we have will reduce it to about N500 billion," he said.
The Senate Committee on Local and Foreign Debts headed by Kabiru Gaya, last month put the local debt at N6 trillion.
In his submission to the Committee on Finance, Abdullahi said that the NCS has met the revenue target for 2011 last September, stressing that more funds would still be raised before the year end. "So far, (from January – October, 2011), N597.622 billion has been realised. With this feat, we have surpassed this year's target even as more funds are expected for November and December 2011," he said.
The target for the year is N596.096 billion.
Abdullahi also told the committee that from next year, all activities of the service would be automated so that no importer would have physical contact with officers and men of the NCS.
He expressed concern over the activities of exporters whom he alleged have a scheme called Negotiable Duty Credit Certificate, which allows them to collect revenue amounting to aboutN50.3 billion. "The amount realised from here goes back to the exporters. "It is affecting our operations. It is not part of our collection."
Also yesterday, the House of Representative urged President Goodluck Jonathan to include the budget of the Central Bank of Nigeria (CBN) and all revenue earning agencies in the 2012 Appropriation Bill as required by the Fiscal Responsibility Act 2007 and the 1999 Constitution (amended).
The Lower House resolved to investigate the sources of funds used to bailout some banks and other institutions by the CBN, and the AMCON. The House had expressed worries that several billions of naira were being used for intervention without recourse to the National Assembly for approval.
Consequently, its Committee on Banking and Currency was mandated to undertake with a view to finding out how the funds were sourced by the CBN and AMCON, how much was applied, as well as whether such interventions conform with the constitution.
The resolution followed the adoption of a motion titled: "Expenditure of public funds by the CBN and AMCON without approval," introduced by Uzoma Nkem-Abonta.
In its bid to revive some ailing banks, the CBN gave out N620 billion to the banks, while another N500 billion was given to private manufacturers and N200 billion to the textile sector. The aviation, power and entertainment sectors also benefited from the scheme.
Nkem-Abonta had during his submission berated the modus operandi of the CBN, accusing it of granting public funds to various entities and sectors without the approval of the appropriate authority.
He said the CBN contrary to its core functions had acquired several hectares of land in the Federal Capital Territory (FCT) for the purpose of investing in hospitality and property businesses, and paid N17 billion for a Nigerian Telecommunications Limited (NITEL) property already sold for N1.8 billion among other alleged impunities.
Nkem-Abota further expressed concern that the CBN injected N620 billion public funds to rescue private banks in 2009, and in 2011, the apex bank, the Nigerian Deposit Insurance Corporation (NDIC) and AMCON injected another N679 billion to recapitalise the same banks without the approval of the National Assembly.
"AMCON being a wholly government-owned agency announced that it will inject another N821 billion to revive some ailing banks again and has also pledged to inject up to N3 trillion without requisite approval."
Attempts to refer the motion to the relevant committee of the House for legislative action without debate was however defeated as members including Deputy Minority Leader Samson Osagie, Yakoob Balogun, Rasaq Bello-Osagie, Ganiyu Olukolu, Jerry Manwe, Bitrus Kaze, Adams Jagaba and the Chairman, Committee on Appropriation, John Enoh who debated the motion separately, expressed support for the prayers.
The House has also resolved to pass the re-enacted Bank and Other Financial Institutions Act 2011 and mandated the House Committee on Rules and Business to circulate the clean copies of the Bill for consideration in the Committee of Whole.
The new bill is meant to reform the financial system and put it at par with international best practices.
Deputy Speaker, Emeka Ihedioha, who presided over the plenary, said there was need to re-commit the bill to the Committee of Whole in view of its importance to the financial sector.
The members present voted that the bill be considered at the Committee of the Whole.
The Guardian