Finance Minister to present 2015 Budget today

Finance minister and co-ordinating minister for the economy, Ngozi Okonjo-Iweala, will today present the 2015 budget estimates separately to the two chambers of the National Assembly.

The total budget figure to be presented by the minister is N4.357.96 trillion. Out of this amount, government proposed N627billion for capital expenditure and N2.622 trillion for recurrent expenditure.

The Federal Government had  returned the revised 2015-2017 Medium Term Expenditure Framework (MTEF) to the Senate to ratify the adjustments carried out on the document, in tandem with  current realities in the oil market.

This is the second time President Goodluck Jonathan has

effected a change to the MTEF and returned to the National Assembly for ratification, following the instability in the international oil market which crashed  crude oil prices recently.

In the first MTEF presented to the apex parliament on 30th September, 2014, Government had proposed a benchmark of $78 per barrel of crude oil, with an exchange rate of N160 to a dollar. The total budget figure then, was N4.8 trillion.

However, as the crude oil price crashed, Government effected a reduction of the oil benchmark on November 18, from the earlier proposed $78 to $73 per barrel, with an exchange rate of N162.00 to the dollar. The total budget figure in that proposal was N4.7 trillion.

With more fall in crude oil prices in the international arena, the Nigerian Government also further reduced the benchmark to $65 per barrel, with exchange rate of N165 to a dollar for the 2015 fiscal year.

The fiscal deficit for 2015 was put at N755 billion against N993.68 billion for 2014; GDP pegged at N95,843 for 2015 against N80.222 for the 2014 fiscal year.

An additional sum of N20 billion revenue is expected from sales of government property; N10 billion from privatisation proceeds; N75 billion from FG’s share of signature bonus; N80 billion from sharing from Stabilisation Fund Account; N570 billion from domestic borrowing, while foreign borrowing was ruled out. These were contained in the revised MTEF returned to the Senate yesterday by President Jonathan for approval.

To facilitate the presentation scheduled for 11am, the minister earlier yesterday, held a closed door meeting with Speaker Aminu Tambuwal and other principal officers of the House, where she sought for the co-operation of the House.

In the letter which was read by Senate President, David Mark, Jonathan said, “I refer to my earlier transmission to the National Assembly in November 2014 of the revised 2015-2017 Medium Term Expenditure Framework, MTEF, for consideration and approval.

“Given further developments in the International oil market which have necessitated further revisions, amendments have been made to some parameters, as well as to some fiscal estimates in the MTEF.

“I hereby forward copies of the revised 2015-2017 MTEF for the kind consideration of the distinguished members of the Senate, and hope that it will be considered and approved expeditiously, in order to bring the 2015 Federal Government of Nigeria budget preparation process to quick closure”.

Also, President Jonathan wrote the Senate yesterday, asking for the slot of 11am today, to enable the finance minister lay the 2015 budget estimates before the lawmakers for their consideration and approval.

He explained that  unstable oil prices at the global level  caused the seeming inconsistency of the Federal Government in the handling of the MTEF and the 2015 Budget proposals.

Jonathan however assured that irrespective of what the oil price might be, the government would not embark on another revision of the oil benchmark after submitting the budget estimates today, noting that necessary adjustments would also be made in future, if the price of crude continues to drop.

The letter reads: “In consonance with the provision of Section 81 Sub-section 1 of the constitution of the Federal Republic of Nigeria 1999, as amended, I write to request that the Distinguished Senate grant the Honourable Minister of Finance the slot of 11 am on Wednesday, 17th December, 2014, to enable her lay before you, the 2015 budget estimate.

“I am cognisant of the fact that the budget estimates are being presented before the passage of 2015-2017 Medium Term Expenditure Framework, MTEF. This is due to the extra-ordinary global circumstances that confronted us in the latter quarter of the 2014 fiscal year.

“As you know, the first MTEF with the budget benchmark of $78 per barrel was submitted to the National Assembly on 30th September 2014, and discussion on the MTEF and budget construction based on those estimates began with the relevant Committees of the National Assembly.

“However, shortly after that submission, oil prices began to fall precipitously, leading to the revision of the oil benchmark price in the MTEF to $73 per barrel, which was resubmitted to the National Assembly on  the 18th of November 2014.

“Following this, the decision of OPEC on their meeting in Vienna on the 27th of November 2014, we want to cut production to support the price, not to further precipitous fall in the oil price to below $70 per barrel. This led one more time to another downward revision of the benchmark price to $65 per barrel and the revised MTEF, which we again submitted to you on 2nd of December, 2014.

“The uncertainty surrounding the global price of crude oil and its continuous fall has occasioned delays in both the submission of the final MTEF and budget estimates. And we thus request your kind consideration of both these items together, in view of our national budget calendar.

“We would like to confirm that having submitted these budget estimates, we are not proposing further revision of the oil benchmark price. Though prices continue to be extremely volatile at present and to trend further downwards , there are indications based on the price intelligence we have at this time, that prices may range between $65 to $70 per barrel in2015.

“Nevertheless, we will like to emphasize that there is no iron clad guarantee where oil prices are concerned, due to numerous underlying global geo-political factors that are outside our control and unpredictable. Should prices fall below the range, the country will have to make further adjustments.

“We hope that despite these circumstances, the distinguished will give kind and due considerations to the budget estimates in sufficient time for us to implement the 2015 budget starting early next year”.

Also, the President submitted for the consideration and approval of the Senate, the 2015 budget proposal of the Nigeria Communications Commission, as well as the 2015 budget proposal of the Universal Service Provision Fund.

Businessday