JOINT committees of the House of Representatives mandated to study the proposals of the Federal Government, which contain removal of fuel subsidy from next year has recommended that subsidy removal is "pre-mature".
The committees were asked by the House to study the 2012-2015 Medium Term Fiscal Frame (MTFF) work and Fiscal Strategy paper as they would impact on the Fiscal Responsibility Act.
The committees also said that "sources other than relying on savings from proposed subsidy removal, as part of financing items for expected deficit should be explored."
Meanwhile, despite threat from organised Labour and civil society groups over the proposed removal of fuel subsidy, the ruling Peoples Democratic Party (PDP) has come out not only to declare its support for the policy but moved ahead to package a sensitisation programme.
Also, Petroleum Minister, Mrs. Diezani Alison-Madueke, declared yesterday that the Nigerian National Petroleum Corporation (NNPC) was not run on Federal Government's Consolidated Revenue Fund.
In a speech at the ongoing investigation of the alleged N450 billion debt by the NNPC to the Federation Account, the minister said that the Corporation's budget could not be subject to Federal Government's yearly appropriation because it was an entirely commercialized entity.
"The Oil and Gas industry is highly capitalized that it cannot be run on government appropriation. Let members know that the NNPC is not subject to the Consolidated Revenue Fund of the Federal Government."
The committee's report, which appeared on yesterday's Order Paper of the House but was skipped during plenary, also recommended that the MTFF and Fiscal Strategy plan must necessarily limit itself to a three-year period of 2012-2014. This is a key requirement of the Fiscal Responsibility Act, 2007.
The House had mandated its joint committees on Finance, Appropriations, Legislative Budget and Research and National Planning and Economic Development to take a look into the proposal and make recommendations to the House for debate and consideration.
Also contained in the report of the committee and obtained by The Guardian is that specific set targets for the various macro-economic parameters/variables such as inflation rate, interest rate and others be articulated, adding that specific strategies to be pursued and implemented to achieve the set targets especially in the light of the impact of the slowdown in global economic recovery, be articulated.
The joint committee led by the Chairman, House Committee on Appropriation, John Enoh, also contended that macro-economic projections for the proceeding three financial years be made to provide fiscal performance information as required by the Fiscal Responsibility Act, 2007.
It also recommended the need for indicative envelopes for the various priority sectors to be clearly spelt out, taking into consideration the historical absorptive capacity of the various sectors/ministries, departments and agencies, adding that, "there should be clear identification of specific flagship projects to be implemented in the various sectors, and that contingent liabilities that could crystallize in the medium term, be identified and described in details."
The joint committee also recommended that the MTFF's paper be submitted to the National Assembly before or on September 1 of each year, adding that "the statutory bodies' budget as required in the schedule to the Fiscal Responsibility Act 2007 be attached to 2012 budget.
"The Joint committee review of key assumptions underlying the revenue projections that, taking into cognisance the amnesty programme initiated in 2009 as well as interaction with the Department of Petroleum Resources and the NNPC, the daily oil crude production figures of 2.48mbpd, and 2.55mbpd and 2.58mbpb for 2012, 2013 and 2014 respectively are recommended."
The committees also accepted to revised benchmark price of $70 instead of the original $75.
It said: "Given the uncertainties of the global economic recovery and the average market price of $83.50 to date for 2011, it is recommended that the benchmark price be approved at $70 per barrel.
That 2012 non-oil revenue estimates as presented be adopted. Government should also clearly articulate its plan for plugging revenue leakages, improving the efficiency of collections, and encouraging the flow of goods and services through Nigerian ports."
On the baseline assumptions for macroeconomics indices on Gross Domestic Products, the committee recommended that Federal Ministry of Finance should, in subsequent submissions, provide adequate clarification on the justification of the assumptions that the exchange rate of N153/US$1 be adopted.
The joint committee also recommended that "the proposal on fuel subsidy removal as contained in the revised fiscal strategy paper is pre-mature. Sources other than relying on savings from proposed subsidy removal, as part of financing items for expected deficit should be explored.
"That Public Private Partnership should be restricted to specialised areas and government should not abandon its responsibility in the process.
"That the Federal Ministry of Finance provide comprehensive information to the National Assembly, before the submission of the 2012 Appropriations proposal, on the volume of capital projects to be founded through Public Private partnership.
"That the deficit GDP fiscal ratios of 2.7per cent and 1.5 per cent for 2012, 2013 and 2014 respectively be adopted.
"Review of 2012-2014 expenditure focus and alignment with the first National Implementation Plan in future submissions, the Ministry of Finance should provide indicative envelopes for the various sectors, as part of the main report to enable the National Assembly assesses the level of alignment with top-line investment priority areas.
The Acting National Chairman of the party, Alhaji Abubakar Kawu Baraje who announced the position of PDP yesterday at a press conference in Abuja, said that the removal of fuel subsidy would make funds available for the Federal Government to fix infrastructure in the country. He contended that only a cabal currently enjoyed the proceeds of subsidy and its removal would bridge the gap that exists between the rich and the poor.
Baraje who was accompanied by his colleagues in the National Working Committee (NWCC), argued it was high time government reviewed the policy of oil subsidy because it was no longer fashionable for government to bear such burden.
"Nigerians are more concerned with the improvement of infrastructure. They want their roads safe and motorable; they want quality education for their children; they want to see affordable and efficient healthcare delivery systems; they want security of lives and property; they also want a guaranteed supply of petroleum products at affordable cost.
"The era when we used our collective wealth to fund the greed of a few middlemen is over. Now is the time to make real the promise of democracy. We cannot continue to gloss over a problem that poses imminent danger to our economic progress", he declared.
Alison-Madueke was responding to a question from a member of the Joint Committee on why the NNPC had refused to submit its budgets to the National Assembly for appropriation as required by law.
She equally dismissed as untrue, reports that the NNPC was using a different exchange rate from the one authorised by the Central Bank of Nigeria (CBN) to calculate its remittances to the Federation Account from the amount it generated from the sale of crude oil.
The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) and Nigeria Extractive Industry Transparency Initiative (NEITI) had in their submissions to the joint committee, alleged that the NNPC used totally different and illegal exchange rate.
The minister attributed the submission by NEITI that NNPC was owing a debt of N842 billion to the Federation Account as a misrepresentation, which arose from the differences between the audit reports of NEITI and that of NNPC, pointing out that while NEITI audit report on NNPC covered the period of 2004 to 2008, the NNPC audit report covered from 2004 to 2010.
In a related development, uproar, exchange of hot words and walk out characterized the investigation by the House of Representatives into the NNPC alleged N450 billion debt to the Federation Account yesterday.
Members of the investigating joint committee practically resorted to a shouting match, resulting in name-calling and all sorts of unprintable words, following disagreement over allegations of bias by leaders of the joint committee.
Trouble started when executive secretary of the NEITI, Mrs. Zainab Ahmed, who concluded her presentations yesterday was asked to provide clarifications on some allegations she made against the NNPC.
One of the co-chairmen of the joint committee, Muraina Ajibola, who is also the chairman of the House Committee on Petroleum Resources (Upstream Sector), asked the NEITI boss to explain how NEITI arrived at the conclusions that the NNPC made unauthorised deductions amounting to N812 billion from the Federation Account.
Ajibola also declared that the fact that NEITI's audit of the NNPC was done every three years had reduced the anticipated impact, which the audit was meant to have on agencies so audited.
Suddenly, there was a massive uproar from many other members of the joint committee who shouted: "No! No!! No!!!" in an uncontrollable manner.
This was followed by shouts of "Point of Order!" to seek ways of expressing their anger.
When the Presiding Chairman of the joint committee who is also the Chairman of the House Finance Committee, Abdulmumuni Jubrin, granted the aggrieved members the opportunity to talk, they poured words of anger on Muraina, a development that complicated the tension in the 231 conference hall, which served as venue of the open investigation.
The Guardian