The Senate has cut subsidy payable on petrol in the coming year to N100 billion, On Kerosene to N45.52 billion.
The Senate’s decision to whittle down the costs of some major items in the proposed 2015 budget iis in reaction to the dwindling oil price in the international market.
The upper chamber on Wednesday demanded immediate submission of the details of the N360.94 billion Service Wide Vote which some of the lawmakers described as nebulous.
This is contained in the 2015-2017 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) which the upper chamber debated and adopted.
The MTEF and FSP which are statutory requirements that must be submitted to the National Assembly for its consideration and approval prior to the presentation of the National Budget to the National Assembly by the Federal Government.
The Federal Government had voted N4.42 trillion as the total Federal Government expenditure for 2015.
After exhaustive debate of the MTEF and FSP, the Senate adopted that recommendation that the total recurrent (Non-Debt) expenditure of the budget be reduced from N2,616.01 trillion to N2,584.08 trillion.
It also reduced the total Statutory Transfers from N411.85 billion to N363.27 billion while it insisted that details of the Service Wide Vote of N360.94 billion be made available to the parliament.
The submission, it said, will enable the National Assembly to see areas to apply any necessary cut.
The specific recommendations it made on the Service Wide Vote included that there is no reason to include N63 billion for Presidential Amnesty Programme under the Service Wide Votes when there is a Ministry for the Niger Delta.
It said that the vote of N63 billion should be moved to relevant Ministry.
The Senate also said that N22 billion provision for internal operations of the armed forces should be made under relevant Ministry.
The Senate also resolved that all sums provided as arrears of pension and gratuity should be reclassified from Service Wide Votes to relevant heads saying that “henceforth this general provision should be discontinued.”
The lawmakers also reduced the total expenditure for the Subsidy Reinvestment and Empowerment Programme (SURE-P) from N102.50 billion to N21.03 billion due to fall in price of crude oil while it demanded that the details of SURE-P projects to be executed should be attached to the annual budget estimates for approval by the National Assembly.
It said that non-oil revenue projection for 2015 budget be increased from N3,539,07 trillion to N4,024.11 trillion while the total Capital Expenditure should be increased from N633.53 billion to N700.78 billion.
The Senate also said that government should strengthen and consolidate its fiscal strategy to narrow the gap between projected and actual revenue for the period 2015-2017, curtailing oil theft and diversifying the economy to increase tax bases.
It said that the current government policy restricting government-owned enterprises expenditure to a maximum of 75% of their gross revenue and automatically converts 255 of such revenue to government revenue is commendable and should be pursued with vigour.
The Senate directed relevant committees of the National Assembly to oversight the kerosene subsidy provision to ensure its full implementation, availability and accessibility.
For effect, the upper chamber warned that if policing kerosene subsidy is difficult, “then we should do away with kerosene subsidy.”
Other salient resolutions of the Senate included that crude oil production of 2,278.2mbpd, 2,327.1mbpd, and 2,406.7mbpd for 2015, 2016 and 2017 respectively be approved.
That the exchange rate of N190/US$1 for 2015 be approved as proposed.
That the price of US$52 per barrel of crude oil as benchmark for 2015 budget be approved against the US$65 per barrel.
On the Senate was of the view that the reduction in the provision of subsidy payment for PMS from N971.14 billion in 2014 to N200 billion in 2015 are not indication of plans to alter government subsisting policy on subsidy on petroleum products but rather based on the projected lower crude oil price in the international market.
It added that the kerosene subsidy provision in the MTEF and FSP which was as a result of the recent investigation by the Senate Committee on Finance of the alleged unremitted $49.8 billion is a welcome development.
It said that kerosene subsidy in the previous years was not appropriated by the National Assembly but now included in the MTEF/FSP.
It said that the increase of non-oil revenue from the proposed N3,539.07 trillion to N4,024.11 trillion is meant to beef up revenue short falls resulting from the recommendation of lower benchmark.
The Senate resolved that in order not to crowd out the private sector from domestic credit market, N665 billion out of the N882.12 billion borrowing for 2015 will be sourced externally at lower interest rate.
It said that the 2015 new borrowing should be pegged at N88.12 billion with N217.12 billion coming from domestic sources and N665 billion from external sources.
Senator Ita Enang (Akwa Ibom North East) in his submission noted that the Senate should be concerned about the monies from non oil sectors.
Enang said, “The Minister of Finance, Dr. Ngozi Okonjo-Iweala who is a proponent of the Fiscal Responsibility Act but she is not seeing to the implementation of that Act. Solid mineral sector should by today generate revenue for the country given the appropriation for the sector over the years.
“Part of our responsibility is to ensure passage of the Petroleum Industry Bill.
“ The PIB is one of the areas that should stabilise the economy for investors to invest more.
“Now the investors are going to Angola because they said the oil climate in the country is not certain.
“By 4th of June the life of this Assembly will end and if we do not pass the bill we are responsibility for the instability of the non oil sector.
“No country trades on its own currency. We have consciously devalued the exchange rate from 160 to 190 and it is official currency trafficking.
Senate President, David Mark, in his summary said, “What this clearly shows is that we all have to tighten our belts across the entire sectors of this government.
“We have for the last several years relied on oil as the main source of our revenue and I know that budget after budget we say we will diversify the economy.
“Every time this budget comes we are still repeating the same thing, the impression I get from it is that those who are responsible for producing the draft merely go there and reproduce what they have been bringing up.
“I think they need to do a little more; they may not be able to forecast accurately. There are a few things I think we must get right, the first thing is let there to be a cut across board, the executive, the judiciary and the legislature and we a prepared to lead in this.
“The areas of leakages we must emphasize on them, the revenue generation and collection, we must make sure that we tighten our belts.
“What has impressed me is that the entire discussion and the debate is the fact that this has been non-partisan, everybody has been very fair.”
Source: World Stage
