‘2016 budget can’t work’

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• Senators cite shrinking oil revenue, high debt profile, no equity in projects’ votes
• Reps differ, want speedy passage
BOTH chambers of the National Assembly yesterday opened debate on the general principles of the N6.08 trillion budget with calls for a critical appraisal of its revenue base.

The debate in the Senate was characterised by shouting matches among senators who, however, ‎agreed over the threat posed by the country’s shrinking revenue as well as her rising debt profile while the House of Representatives pledged speedy passage.

In the Senate, lawmakers were worried about how the Federal Government can fund the N6.08 trillion budget with a loan of over 50% of that amount . The Deputy President of the Senate, Ike Ekweremadu, in contributing to the debate was very categorical on the fact that the budget was too large and seriously out of tune with the country’s economic realities . He said the budget portrayed Nigeria as a country in prosperity whereas the contrary was the case.

Ekweremadu submitted that government should look inwards and find ways of generating funds to finance the budget instead of relying on borrowing which he described as an attempt to mortgage the future of Nigeria.

Ekweremadu said: “I am not an economist but I know that if my income is N100,000 and suddenly I start earning N30,000 and I tell my children that we will now be spending N120,000, they will start wondering where I will get the money. The problem we have is that over the years we have seen prosperity and we have adjusted to it and now we are seeing a downward trend in our revenue, we don’t seem to be addressing this issue.

“We have always increased the budget of this country from between 10 and 20 per cent. I just want to appeal that for the first time we should be able to reduce that budget by the same 20 to 30 per cent.”

The deputy Senate president who advised that new projects be avoided so that attention would be focused on ongoing projects drew attention to what he called a series of imbalances in the distribution of ‎resources as reflected in the budget “We need to begin to reduce the cost of running government so that we can afford the government which we deserve.

I also believe that looking at the budget, we need to concentrate more on ongoing projects rather than starting new projects.
“If you look at some sectors, they have about N5 billion for designs alone, which mean new projects; we need to concentrate on the important existing projects. My consolation is that this parliament has the final say on this budget so I will like to appeal to my colleagues to look at this budget critically .I will be really worried if we are able to pass the budget the way it is,” he said.

On the imbalance in resource distribution, Ekweremadu said: “I am also worried about the spread, the equity in some of the figures: I hope our colleagues will do the right thing.

Look at the Kano-Maiduguri Expressway where you have N10 billion, the Enugu-Port Harcourt N10 billion, Enugu Onitsha N3 billion, but Lagos – Ibadan has N55 billion.

I think that our committee needs to look at it, I do not have any problem with that road but I think there should be equity in the distribution of the resources. It may never be enough but we need know that a man who is not justly treated can never be interested in peace. This country belongs to all of us.”

In his contribution earlier, Senator Enyinnaya Abaribe, (PDP, Abia South) said it was a bad economic policy to have increased the size of the budget based on a plan to borrow.

“Mr. President, a budget that increases spending up to 30 per cent based solely on borrowing, in what way is it justified? That is the question we want to ask the people who brought this budget . Mr President, a budget that moves domestic spending within Aso Villa from N580 million to N1.7 billion cannot be a budget of change..

“We were told that in the revised budget there was an adjustment due to error, we agree but what has happened is that up to N7 billion was moved from buying vehicles to being spread in offices.

“It also increases spending for renovations within the Villa to N3.9 billion: what else do you want to renovate there that Nigerians will see in the Year 2016?

“This budget is predicated on an oil benchmark of $38 per barrel and I can now say that with oil at $28 today, this budget is dead on arrival.”

Senator Barau Jibril (APC) Kano State observed that the budget proposal required serious overhaul to make it comply with topical economic‎ realities.

“There is the need for us in the National Assembly to re-arrange this budget document particularly in line with the assumptions like the benchmark. It is either we do it now or we give it back to the presidency to re-arrange it and give it back to us,” he said.

Senator Olugbenga ‎Ashafa (APC, Lagos East) lamented that some proposals contained in the budget might not be realised unless a supplementary budget was brought by the presidency.

“Where is the money for recruiting and training 500,000 teachers going to come from? Is it going to come from states which cannot pay salaries? It is also good that we are proposing to pay N5,000 to unemployed youths. How are we going to raise the funds?” Ashafa queried.

While Suleiman Adokwe (PDP, Nasarawa South) advised that serous measures be taken to properly establish the exact revenue accruing to the country from the revenue generating agencies, the chairman of the Senate Committee on Finance, John Enoh, expressed concern that the budget has a deficit figure higher than the capital.

“What it means is that some components of what we are going to borrow, we are going to use for recurrent items and we need to be very careful on this basis,” he said.

On the danger in borrowing, Enoh, said: “We need to also remember that when the International Monetary Fund chief executive came to Nigeria, she was quite graphic in what she demonstrated; that a situation in Nigeria in which for every one naira, about 37kobo is devoted to servicing debt is not right.

“We need to be a little bit more careful about it. That means there’s pressure on what we earn in terms of what we use to service our debt.”

According to Enoh, the government was being too optimistic that expenditure items would be realised but forgot to take a lot of issues into consideration.

“I believe there is also too much optimism. We are talking about the fact that we expect to raise about N1.45trillion non-oil proceeds. If you look at what we did and how we performed in 2015, you find out that the difference is so huge.”

Senator Peter Nwaobushi (PDP,Delta North) pointed out some loopholes in the lead debate presented by the Senate Leader Mohammed Ali Ndume earlier , adding there were attempts to deceive Nigerians with some of the proposals in the budget estimates.

The lawmaker condemned the reduction in the budget for the Niger Delta Amnesty programme , pointing out that such actions would not help to promote peace in the area.
“In the Amnesty Programme, last year, what was budgeted was N47.39 billion and now, what is budgeted here is N20 billion.

“We are talking of the fall of the price in oil revenue, the only way we can get the N820 billion that you are projecting in this budget is by having peace in the Niger Delta. What is the justification of budgeting N35 billion for oil exploration when you are budgeting N20 billion to the people who are producing the oil? We should pacify these people, make sure that they are happy,” he said.

Leading the debate in the House, Majority Leader Femi Gbajabiamila called on his colleagues to facilitate the speedy passage of the bill in view of the time already wasted, describing the proposals as epic and historical.

Gbajabiamila noted that the budget bill was an inclusive one for the interest of all Nigerians, noting further that with a deficit of N2.2 trillion, domestic borrowing would for the first time be higher than foreign borrowing, with figures for domestic borrowing standing at N984 billion and foreign borrowing at N900 billion.

He said the Federal Government’s proposal for the allocation of N500 billion for social intervention initiatives, would provide for recruitment and training of 500,000 unemployed graduates.

“It is an epic budget because it is a budget based on the internationally acclaimed zero-based budgeting system where every kobo has been newly justified by the Ministries Departments and Agencies (MDAs).”

Also contributing, Mohammad Tahir Monguno lamented the poor implementation of budgets by previous administrations. “Year in year out we pass the Appropriation Bill into law, but when it comes to implementation it is haphazard. For example for the past four years there was never a time our budget was implemented up to 60 percent so there is the need for us to emphasize the issue of budget implementation,’’ he said.

Abiodun Adeogun, however, said that income projection from the country’s non-oil sector was weak. “When the bill gets to the various committee levels, amendments should be effected to address non-oil revenues,” he suggested.

Herman Hembe in his submissions urged the Federal Government to find means of funding the budget.“Our job as parliamentarians is to rally round the president and ensure that this budget he brought to us justice is done to it so that he will be able to do the best for Nigeria at these difficult times,” he said.

source: http://www.ngrguardiannews.com/2016/01/2016-budget-cant-work/

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