Nigerian Senators divided over oil benchmark for 2016 budget

Senate chamber

Members of the Nigerian Senate on Wednesday commenced debate on the Medium Term Expenditure Framework (MTEF) presented to the upper legislative body by President Muhammadu Buhari.

Mr. Buhari had forwarded the MTEF to the Senate on Monday.

Under Nigerian public finance system, the MTEF is the precursor to budget, as well as Fiscal Strategy Paper (FSP), which details spending and revenue projections for three years.

At the Senate plenary Wednesday, lawmakers differed on the $38 per barrel benchmark projected as the price of crude of oil, the mainstay of the Nigerian economy.

Leading the debate, the Deputy Senate President, Ike Ekweremadu, asked the Senate to consider an upward review of the crude oil benchmark for the 2016 budget.

‎In his opinion the $38 oil benchmark is “conservative”.

Mr. Ekweremadu therefore urged the senate to peg the oil benchmark for the 2016 budget at $40 per barrel.

“I have looked at the projection for the oil price,” he began, adding that “the benchmark of $38 per barrel appears to me to be conservative. From the projection of oil price for 2016 it is estimated‎ that it will hover between $40 and $45.

“I like to suggest that the senate consider an oil benchmark of $40. I’m sure that this will help cushion the problems we have in the states.”

However, Adamu Aliero, an All Progressives Congress Senator from Kebbi State‎, opposed Mr. Ekweremadu’s proposal, saying it was unrealistic.

“It is unrealistic. I therefore recommend we take it to $35 per barrel,” he said.

‎Mr. Aliero added that it had been projected that the global price of crude oil would fall further in 2016.

The global price of crude oil fell from $38 to $35 on Wednesday.‎

‎Also, speaking, Olalekan Adeola (APC-Lagos West), queried the indices used by the Buhari-led cabinet in determining that “the price of oil will increase or decrease or fall below $38″.

“We can allow it (benchmark) to be like that but we should let the committee do a thorough job,” Mr. Adeola said.

Speaking further, he urged the Federal Government to increase borrowing and improve budgetary share of capital expenditure.

Mr. Adeola’s view on capital expenditure vis-a-vis infrastructural development was corroborated by Ben Bruce (PDP-Bayelsa East), who canvassed massive borrowing to “industrialize this nation” and develop infrastructure.

Saying “it does matter the party it comes from; what is important is that we develop”, Mr. Bruce maintained that “this budget is good” and commended the Finance Minister for a “good job”.

Also, he said if petrol was fully de-subsidized, the effect would be felt in the public transport sector. He noted that “prices of goods would not increase since diesel had always been deregulated.”

He, therefore, urged Mr. Buhari to subsidize public mass transit system, citing instances the United States, Germany and South Africa as examples of countries where that had been done successfully.

Dino Melaye (APC-Kogi West) also made a case for infrastructural development.

He proposed that capital expenditure be increased to 35 per cent because “APC promised infrastructural development”.

Peter Nwaoboshi (PDP-Delta North) drew the attention of the Senate to alleged “hidden things” in the MTEF.

For instance, he said it should be noted that “this government has removed subsidy on kerosene”.

Also, he said allocation to the Niger Delta amnesty programme had been reduced.

For him, the fall-out of the Bayelsa election showed that militants still existed.

Thus, he urged the Federal Government to jettison any plan to cut its commitment to the amnesty programme.

He also noted the reduction of National Assembly budget from N120 billion to N115 billion.

Mr. Buhari proposed N500 billion for social welfare programme in the 2016 budget.‎


“The federal government will collaborate with state governments to‎ institute well-structured social welfare intervention programme such as school feeding programme initiatives, conditional cash transfer to the most vulnerable, and post National Youth Service Corps (NYSC) grant,” the president said in a letter containing read by the Senate President, Bukola Saraki.

“N500 billion has been provisioned in the 2016 budget as social investments for these programmes.”

Mr. Buhari added that the interventions would start as a pilot scheme, and that the government would work towards securing the support of donor agencies and development partners in order to minimise potential risks.

The MTEF was later referred to the Senate Committees on Appropriations and Finance for further legislative actions.


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  • DanielOsazuwa

    It’s now certain that there is a demon holding Nigeria in captivity. That demon is IMF structural support (SP). Until Nigeria unzip itself from imperial IMF vace grip, our infrastructures will continuously deteriorate. Without developing our infrastructures, our developmental/economic gear will continually be on reverse.

    It’s the IMF SP agreement that is limiting our borrowing to 3%. The West ( US, EU,UK and Japan) are quantitative easing themselves at a speed never seen before but we are here playing dumb and sticking to the chains of IMF called SP.

    Our debt position is the best among the top 50th economy in the world. The Senate must help the President to see the pit fall in his conservative budget. They should increase the budget to 8trillion Naira and increase the borrowing limit to between 6-8%. The increase should be use to upgrade and revamp our delipidated and antiquated infrastructures.

    Our housing deficit alone is more than 15 million units and the Minister is applauding himself for his plan of building about 17,000 housing units. A JOKE !!!

    I hope I have not catapulted myself enter one chance bus. Just thinking aloud.

    • aladeadekunleoluwaadeshinaola

      How many did Jonathan build, he said it is a pilot scheme and if it works, they will now go full blast.

      • Don

        What was the return on Agricultural investment during Jonathan time?

  • marc umeh

    I thought by now they would have sobbered up. The benchmark for oil should not be pick-a-number game.
    The world is flooded with oil. Hungry Iran is now coming on board , Russia cannot sell enough oil , more oil well are being found.
    Meanwhile we are suggesting major increases in capital project. What we could not do at $100 , will not be easy to accomplish now. So a dose of realism will help.

  • Otile

    It is shameful that after all these years of Fulani Yoruba rule Nigeria is still solely dependent on crude oil from the Niger Delta. See how the unproductive senators are about to go to war on how much to peg the oil price. This means no oil no survival for one Nigeria. Buhari wake up from your stupor and diversify the economy before it is too late. Baba go slow.

  • anthony ile

    ” Is some one still talking of Jonathan? There are challenges to solve, time wait’s for no one ” . The president should look at infrastructure, technology, R & D, Nigeria needs a brand we can sell to the world. Moreover, the pricing of crude oil (C.O) in the international market is not controlled by Nigeria. So what ever price they peg C.O, is all speculative, it might go low or high. 21st century leaders should diversify the economy, Nigeria has so much resources other than C.O.

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