•FG targets review in June over falling oil prices
•Group petitions Senate on TSA
From Fred Itua, Abuja
The Federal Government yesterday expressed fresh worries over the continuous dwindling of oil prices and the possible effect on the implementation of the 2016 national budget.
Minister of Budget and National Planning, Senator Udoma Udo-Udoma, who briefed a joint committee session (Appropriation) of both chambers in Abuja, told lawmakers that the government may be compelled to consider a downward review of the $38 oil benchmark for the budget. This is even as his Finance counterpart, Mrs. Kemi Adeosun, admitted that the economy was struggling.
Sen. Udo-Udoma said the review may come in June, but did not tell the lawmakers about the new oil benchmark that may be settled for after its midterm review.
“The oil prices came down over a year ago. People will not appreciate the impact of that. The cost of production has not come down. The cost of production is about $20 and what we get at the end of the day is small. This has made the budget a big challenge.
“We have been talking about diversification. In the end, it will be good for the economy. When we diversify, we create jobs. We are using the fall in oil prices as an opportunity to do things differently.
“We have taken a bold step in this budget, despite the financial challenge. We are expecting more resources from non-oil to oil revenues. We based our benchmark on $38. We are expecting that by the middle of the year, prices of crude oil will go up. Just in case our oil benchmark target is wrong, we will consider a mid-term review and come back to the National Assembly. If the price proves unrealistic, we will come back to the National Assembly to look at other ways forward.
“We are going to look at other sources. We are making plans to improve on our tax collection. The Federal Inland Revenue Service (FIRS) is championing that to ensure that we get that right. The Treasury Single Account (TSA) is another way. The Nigeria Customs Service (NCS) is another agency we are hoping will generate funds,” he said.
The minister denied that the government was planning to sack civil servants as a result of the biting cash crunch.
“Despite the huge drop in earnings, the government will not retrench. People should not be scared. We are looking at overheads and we have cut that by 9 per cent. There is a level you reduce it to and it will affect government officials from performing their duties. Next year, we will look at new ways we can further reduce overhead cost,” he added.
Mrs. Adeosun who, admitted that the economy was struggling, however, revealed that things would improve when the government injects 30 per cent of the money for 2016 budget into the real sector.
She said the ministry was working with the Economic and Financial Crimes Commission (EFCC) to fish out more ghost workers from the government’s payroll.
She said: “We have secured debts with Chinese Nexim Bank and the World Bank at very low interest rates. We are not just borrowing money for borrowing sake. We are borrowing to finance critical sectors of the economy.
“We are working with the Economic and Financial Crimes Commission (EFCC) and see how we can further remove ghost workers from our payroll. That is something we are still doing.
“We believe that by injecting more than 30 per cent, it will stimulate the economy. The economy is slow right now and by the time we start paying contractors and others, the economy will pick up. We expect that from next year, our debt will reduce.”
In his remarks, Senate Committee Chairman on Appropriation, Danjuma Goje, promised to hasten things up to meet the new March 17 deadline when both chambers of the National Assembly will pass the budget.
Goje said: “We have been meeting with you, trying to package the budget. It is in continuation of our efforts to finalize the budget. We have already given ourselves a deadline to ensure that by March 16, we lay our budget report. In order not to fail the nation, the budget has to be passed.
“That is why we are having this conversation to ensure that what we produce is what will be implemented. We want to produce a budget the executive will be able to implement. If you have any other idea you have not told us, this will be the last place for public interaction,” he said.
Meanwhile, Bukola Saraki has received a petition accusing the Upper Chamber of seeking to frustrate the application of the Treasury Single Account (TSA) policy through one of its recent resolutions, wherein the Red Chamber, among other recommendations, urged the Central Bank of Nigeria (CBN) to terminate all contracts relating to the TSA.
The petition which was sent by The Coalition Against Corrupt Leaders (CACOL), asked the Senate to immediately rescind its position, pointing out that “the recommendations, if implemented as adopted, would represent a deadly attack on the Federal Government TSA project with a view to killing it and reversing all the gains recorded within the short time of its implementation.”
Signed by the Executive Chairman, Debo Adeniran, the petition raised questions about the resolution of the Senate.
He queried: “Could it then be safe to conclude that there is a move within the Senate to use the termination of the contract which will naturally frustrate the TSA project, still at its infancy, as an excuse to exempt the Senate from compliance with TSA to which President Muhammadu Buhari has consistently pledged commitment?
“What measures, if any, has the Senate proposed to manage the consequences on the economy of immediate disruption of the already settled nationwide TSA payment and revenue collection processes?” the group asked.