President Goodluck Jonathan on Wednesday submitted a revised Medium Term Expenditure Framework, MTEF, to the National Assembly, in response to declining oil price at the international market.
The government had pledged to review the fundamentals of the 2015 budget to reflect the current realities.
On Sunday, the Finance Minister, Ngozi Okonjo-Iweala, told reporters in Abuja that some of the previous benchmarks, including the $78 per barrel oil benchmark earlier proposed in the draft 2015 Appropriation Bill submitted to the lawmakers, have become unrealistic.
The minister said the Federal Government was considering a fresh proposal of $73 per barrel, which would require the approval of the National Assembly.
A letter from the president conveying the revised 2015-2017 MTEF to the Senate on Wednesday also included adjustments to some other key parameters and fiscal estimates in the budget.
The president’s letter, read by the Senate President, David Mark, stated in part, “I had transmitted the 2015-2017 medium term expenditure framework and fiscal strategy paper (MTEF/FSP) to the National Assembly for consideration and approval.
“However, recent developments in the international oil market have necessitated that the MTEF be revised.
“Consequently, following further consultations with key stakeholders, adjustments have been made to some of the key parameters as well as to some fiscal estimates in the MTEF.”
President Jonathan also asked the National Assembly to approve the review in order to “bring the 2015 FGN budget preparation process to a quick closure.”
A review of the document showed that the former proposals in the draft 2015 appropriation was cut by about N235 billion, though the country’s daily oil production capacity was left at an average of 2.2782 million barrels and exchange rate of N162 to the dollar.
Further review of the document revealed that some critical component programmes like the Subsidy Reinvestment and Empowerment Programme (SURE-P) which was allocated N259billion for its capital expenditure, now has its budget reduced to N184billion.
Similarly, allocations to ministries, departments and agencies (MDAs) for capital expenditure, previously put at N1.029trillion, has been sliced to N872billion.
Subsidy for supply of petroleum products was reduced from N971 billion to N458.6 billion, while subsidies for household kerosene is now cut from N250 billion to N156 billion in the current proposal.
The President in the new MTEF proposed N4.661trillion as the budget estimates for the 2015 fiscal year.
The figure is lower than the previous N4.817trillion proposed in the MTEF and FSP document presented to the Senate on October 15.
The document also showed that the fresh proposal of N4.661tn is over N100bn lower than the N4.724tn appropriated by the National Assembly in the 2014 budget.
The new MTEF and FSP also showed a cut in capital expenditure from N1.436trillion proposed earlier to N1.208trillion.
However, the Federal Government retained the recurrent expenditure of N2.622tn proposal in the first MTEF/FSP.