ABUJA, Federal Republic of Nigeria. President Muhammadu Buhari yesterday wrote the National Assembly (NASS) seeking approval for N465.64 billion as supplementary budget for the 2015 fiscal year to among others, pay petroleum subsidy claims amounting to N413,363,134,505.
In the letter separately addressed to the Senate and the House of Representatives, the President also asked the lawmakers to approve the upward review of a new borrowing plan from N882.1 billion to N2.103 trillion just as he sought an upward review of the fiscal deficit from N1.09 per cent of GDP to N2.219 per cent of GDP.
The N465. 6 billion supplementary budget proposal is made up of N460.6 for additional recurrent (non-debt) expenditure while the balance of N5 billion is for capital expenditure.
Buhari’s letter which the Senate President, Bukola Saraki read to his colleagues said: “Mr. Senate President, you may wish to recall that the 2015 budget was predicated on oil production of 2.2782 million barrels per day. Benchmark oil price of 53 dollars per barrel and an exchange rate of N190 per dollar. Based on these three assumptions, the following fiscal budget was projected:
- FGN budget revenue N3.452 trillion made of share of oil and mineral revenue. N 1.645 trillion, share of non-oil revenue. N1.215 trillion, FGN Independent Revenue of N489.3 billion.
- FGN aggregate expenditure was estimated at N4.485 trillion, comprising of statutory transfers – N354.34 billion debt service,N953.6 billion, recurrent (non-debt) personnel cost. N1.828 trillion recurrent (non-debt), overhead of N791. 2 billion and Capital expenditure of N536. 6 billion.
“However, the implementation of the FGN 2015 budget has been flawed with significant revenue shortfalls due to continuous decline in oil price, oil production shortfall and non-full realisation of non-oil revenue.
You may wish to further note that owing to the need to sustain the current progress in addressing the security challenges and other important obligations of government, emergency expenditure items required urgent funding is projected at N465.64 billion.”
The letter continued: “Call for additional borrowing: The expected deficit arising from the above is projected at N2.103 trillion or 2.19 per cent of GDP to be financed by additional borrowing of N1.601 trillion through the debt management office.
Accordingly, I deem it necessary to formally request the concurrence of the National Assembly to please consider and approve an upward review of the fiscal deficit from 1.09 per cent of GDP to 2.19 per cent of GDP; an upward revision of the new borrowing from N882.1 billion to N2.103 trillion and a new funding requirement to address security challenges and other important obligations with the sum of N465.64 billion.
A 2015 budget revised revenue framework is also attached and also attached is the supplementary appropriation bill 2015”.
The supplementary budget is predicated on oil production of 2.2003 million barrels per day, oil benchmark price of $48 per barrel and an exchange rate of N190 to US$1.
It also showed security provision of N29,958,865,512, subsidy sum of N413,363,134,505 as well as payment of severance gratuity and allowances of outgone and incoming legislators and legislative aides totaling N10,618,837,435.
Senate approval for the Lagos World Bank Loan followed consideration of the loan application by the Senate Ad-Hoc Committee on Local and Foreign Debt.
President Muhammadu Buhari had on September 29, written the Senate, urging it to approve the said amount for Lagos State.
Although the loan was approved, some senators expressed concern over the alarming rate the present administration was borrowing, pointing out that it was heightening the nation’s loan profile.
However, Saraki believed that accessing loans was not a bad development if judiciously deployed for productive ventures.
“We are going to be seeing many of these kinds of requests. We must do our work effectively in our respective committees to ensure proper oversight of loans and projects being executed with the funds.
The Ad-Hoc committed in its findings and observations stated that based on the submissions and interactions with Lagos State Commissioner of Works and Transport as well as other government officials, it was observed that the Lagos State Development Policy Operation, Budget Support) for the sum of $600 million was approved by World Bank in 2010 to be disbursed in three tranches of $200 million each.
Credit: Guardian (Nigeria)
