Sunday, 24 January 2016

SENATE COMMENCES DEBATE ON THE APPROPRIATION BILL


The Senate at its plenary on Wednesday, 21st January 2016 commenced debate on the general principles of the 2016 Appropriation Bill. The National Budget was presented by President Buhari on December 22, 2015.

Leading the debate on the Bill, Senate leader, Sen. Ali Ndume (APC: Borno) recalled that President Buhari had requested the legislature’s authorisation of N6,077,680,000,000.000 (Six Trillion & Seventy Seven Billion, Six Hundred and Eighty Naira) from the Consolidated Revenue Fund of the Federation at the date of budget presentation. Out of the total budgetary sum, N351.37 billion is for statutory transfers, N1.475 trillion for debt service, 2.648 trillion for recurrent expenditure and N1.85 trillion as capital expenditure.
The Senate leader also mentioned that the development of the 2016 budget was guided by the 2016-2018 Medium Term Expenditure Framework (MTEF) and Fiscal Strategic Paper (FSP) as well as the 2016-2020 medium term successor strategic plan.  The 2016 budget is also predicated on certain assumptions such as a benchmark price of $38 per barrel, a production estimate of 2.2million barrels of oil per day and an exchange rate of N197 to a dollar among others. Other assumptions include the broadening of tax base and improving the effectiveness of revenue collecting agencies, full implementation of the Treasury Single Account, the adoption of a zero based budgeting approach, the enhancement of the Government Integrated Information Systems (GIFMIS), the introduction of the Continuous Audit Process (CAP) and the establishment of an Efficiency Unit to identify and eliminate wasteful spending, duplication and other inefficiencies.
Objectives of the 2016 Budget  include :
  • Ensuring that the economy is revived by making it more competitive and focusing on infrastructural developments
  • Delivering inclusive growth to Nigerians
  • Addressing the problem of youth unemployment and underemployment
  • Prioritising the welfare of Nigerians
  • Broadening the tax base and improving the effectiveness of revenue collection
  • Diversifying the economy and moving away from dependence on oil 
Sen. Ndume also emphasised that a capital allocation would also be given to priority areas such as Works, Power and Housing, Transport, Defence and Interior with investments made in the Agriculture and Solid Mineral sectors in line with Nigeria’s long term objectives and the principle of sustainable development.  A sum of N500 billion will also be provided as a Social Intervention Fund. A key component of the programme is the implementation of the Public Primary School feeding and a free education programme for science, technology and education students in the tertiary institutions.  There is also a provision of financial training and loans to market women, traders and artisans through cooperative societies in the Appropriation Bill.  Nonetheless, the overall deficit budget for 2016 is predicated at N2.22 trillion   out of which N984 billion will be financed from domestic sources and  N900 billion from foreign sources.  The total percentage of the Government debt profile was also placed at 14% of the Gross Domestic Product (GDP) for 2016.
Contributing to the debate, various lawmakers appeared to have divergent opinions on the 2016 budget based on party lines. For instance, Sen. Enyinnaya Abaribe (PDP: Abia) criticised the budget as bringing ”change in the wrong direction” as the expenses detailed in the budget were not fully justified in line with zero based budgeting. He also drew attention of the Senate to the fact that the Presidency had pretended to revise the amount allocated to the purchase of BMW saloon cars and jeeps only to increase the amount allocated for the renovation of  President Buhari’s residence (Aso Villa).  Sen. John Enoh (PDP: Cross River)  was also uncomfortable with the amount  allocated as deficit budget as he feared that it would have huge implications in future.  Corroborating this view, Sen. Rose Oko (PDP:Cross River) also stated that Nigeria’s budget deficit in 2016 could only rise as  the oil price was presently at $28 per barrel.
Furthermore, Sen. Utazi Chukwuka (PDP: Enugu) disclosed his reservations on the 2016 budget as he questioned why various details on pages 194,197,198,200 and 201 of the Appropriation Bill were blank.  Sen. Peter Nwaoboshi (PDP: Delta) also questioned why the amount allocated for the amnesty programme in the Niger Delta had been reduced from over N47 billion to N20 billion in the Appropriation Bill.  Sen. Ben Murray-Bruce (PDP: Bayelsa) also called for a budget that was futuristic with higher allocations on energy efficiency, education and health. He also suggested an immediate tackling of the population explosion crisis in Nigeria and importation as a means of sustainable development.
However, lawmakers from the ruling party were of a different opinion and heralded the objectives and policies of the 2016 Appropriation Bill as a budget that would stimulate economic growth and provide service delivery to all Nigerians. Sen. Babajide Omoworare (APC: Osun) for example noted that broadening the tax base and exploring Nigeria’s solid minerals would create a pathway for the diversification of the economy. Sen. Gbenga Ashafa (APC: Lagos) was also of the view that the budget was predicated on Nigeria’s present reality as the Senate’s closed-door session with the CBN Governor on Tuesday, 19th January revealed the need to reflect on how to move the country forward.  Sen. Barnabas Gemade (APC: Benue) also appraised the budget as one that considered germane issues and hoped that there would be a conscious effort to promote more exports.
Although the deliberation of the Appropriation Bill was originally scheduled for  one week, the Senate President, Bukola Saraki has promised to create more room if need be, for debate.

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