Senate approves MTEF, raises oil benchmark to $57

Senate President, Ahmed Lawan. [PHOTO CREDIT: Official Twitter handle of the Senate President]
Senate President, Ahmed Lawan. [PHOTO CREDIT: Official Twitter handle of the Senate President]

The Senate has approved the 2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The MTEF and FSP are documents that provide the framework of designing a budget as enshrined in section 11(3) of the Fiscal Responsibility Act, 2007.

The lawmakers increased the crude oil benchmark price to $57 per barrel against the $55 proposed by President Muhammadu Buhari.

The Senate also recommended that the total estimated expenditure of the federal government should be increased from N10.002 trillion to N10,729.4 trillion.

The lawmakers, however, maintained the exchange rate of N305/$ for economic stability – as proposed by the president.

Last week, Mr Buhari sent a letter to the National Assembly detailing the provisions of the two documents.

In it, he made proposals for a budget deficit, crude oil benchmark price, exchange rate, among others.

The Chairman of the National Assembly joint committee on finance, Adeola Olamilekan, who presented the report, said the committee put daily production output at 2.18 million barrels per day.

He said in view of the concerted effort by the NNPC and security agencies to tackle the menace of oil theft and vandalization, the 2.18 million bpd would be realisable.

The committee also recommended that the revenue target of Nigeria Customs Service (NCS) of N942.6 billion for 2020 should be increased to N1.5 trillion, “as a result of the performance of NSC in last nine months with three months still outstanding.”

“The NCS revenue as at September stood at N1 trillion against the budget figure of N969. 8 billion for the year 2019. The Joint Committee commends the NCS for exceeding the targeted revenue despite the global economic challenges and closure of the Nigerian borders.

“The sum of N557.4 billion from the revenue increment of NCS be used to reduce borrowing by N200 billion and increase capital expenditure thereby decreasing the size of the budget deficit from N1.7 trillion to N1.5 trillion and also increase the total capital available to MDA by N357 billion, from N1.01 trillion to N1.367 trillion,” he said.

While stating that exchange rate of N305/$ should be maintained, Mr Olamilekan said more work should be done by the Minister of Finance and all economic advisers and her team on improving the economic growth by increasing the GDP and reducing the inflation rate to a single digit.

The lawmaker said a proper investigation should be carried out on the e-collection stamp duties domiciled with Central Bank of Nigeria for the past years so as to show probity and accountability and increase the revenue base of the country.

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Other recommendations include immediate amendment of the National Assembly Act on Production Sharing Contracts (PSC) with lOCs and proper investigation of NNPC so as to ascertain the actual cost associated with the Joint Venture agreements.

The committee also recommended that more budgets of government-owned enterprises should be added to the nation’s budget to ensure proper checks and balances among all federal government agencies.

“Debt Management Office (DMO) should put more efforts and strategies in managing foreign and local debts.

“National Assembly should expedite action on the passage of the finance bill which will be brought along with the National Budget into Law for easy implementation of the 2020 budget, most especially in the area of VAT.

“The committee calls for an urgent review/amendment to the FRA Act and the various Laws of the revenue-generating agencies to align with current realities,” the lawmaker said

The committee also asked that one per cent of the Consolidated Revenue Fund to finance the Basic Healthcare Provision Fund be classified as Statutory Transfer.

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