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BUDGET: Crude oil benchmark, production

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Read more on the budget presentation here

In view of its anti-people tendencies, Esele warned that labour would not support the budget except the capital provisions were made to be higher.

Crude oil benchmark, production

Notwithstanding the criticisms, respondents agreed that the $75 benchmark was realistic, as according to Fawibe: “We need to cut down on the crude oil benchmark in view of developments in the global energy world, as more alternative sources are being discovered.”

In spite of the loss of production from the continental shelf through the loss of Bakassi to Cameroon, yesterday, on account of the International Court of Justice, ICJ’s ruling, Esele argued that the 2.53 million daily production target was still realistic, considering not all of the oil and gas resources was ceded to Cameroon.

Besides, with oil price still within the range of $100/barrel, he said Nigeria still had a lot to fall back on if the price remained at current levels by next next year, which will help reduce budget deficits

Security gets N667bn allocation, education – N426bn

In the proposed budget, security received a large chunk of the allocation of N668.56 billion, broken down into Defence N348.91 billion and the Police N319.65 billion.


The Educational sector followed with an allocation of N426.53 billion; Health – 279.23 billion; Works – N183.5 billion; Agriculture and Rural development – 81.41 billion and Power – 74.26 billion.

Jonathan disclosed that the budget is based on the prudent economic policies of the government, going by the uncertainty in the global economic environment.

The Federal Government’s crude oil production proposal of 2.53 million barrels per day is an improvement of 2.02 per cent over 2.48 million barrels per day estimate in 2012

The government is projecting Gross Domestic Product, GDP, growth rate of 6.5 per cent, compared to 6.85 per cent, in its Fiscal Strategy Paper.

The revision in the GDP growth rate, according to Jonathan, is underpinned by the fact that the severe floods experienced over large parts of the country are expected to impact on economic activity in 2013, especially agriculture. He noted, however, that the growth prospects may improve with the plan to boost dry season farming.

The Federal Government is projecting gross federally collectible revenue of N10.84 trillion, of which the total revenue available for the Federal Government’s Budget is forecast at N3.89 trillion, representing an increase of about nine per cent over the estimate for 2012.

It is targeting an increase in non-oil revenue in 2013, adding that ongoing reforms in the country’s revenue collecting agencies, and the implementation of initiatives to further develop the non-oil sector has continued to yield positive results.

Budget deficit of 2.17%, dropping from 2.85 in 2012

“The fiscal deficit is projected to improve to about 2.17 per cent of GDP in the 2013 Budget compared to 2.85 per cent in 2012. This is well within the threshold stipulated in the Fiscal Responsibility Act, 2007 and clearly highlights our commitment to fiscal prudence.

“We are determined to further rein in domestic borrowing, and this way, ensure that our debt stock remains at a sustainable level.”

Concerning the allocation, Jonathan said the government was maintaining its focus on critical economic and social sectors, noting that some of the sectors are largely driven by private sector activity, while others require a great deal of public sector support.

He said: “The power and gas sectors require a lot of investments to sustain our supply improvements. We shall, therefore, complement available resources with a proposed Infrastructure Euro Bond of about $1 billion in order to complete gas pipelines and other infrastructure investments.

“We have also programmed other grants and soft credits critical to infrastructure and other sectors in our medium term external borrowing plan.”

FG committed to reduction in cost of governance

Meanwhile, President Jonathan has said the Federal Government was taking steps to reduce the cost of governance, and has commenced moves aimed at rationalising agencies with overlapping functions.

He noted that in 2013, the government expects to save costs from the proposed rationalisation exercise.

He said government was also determined to reduce the cost of governance. We are reviewing the recommendations aimed at rationalizing Agencies of the Federal Government with overlapping functions. This has been taken into account in the preparation of the 2013 Budget, and we expect some modest cost savings from this exercise in the course of the 2013 fiscal year.

“However, more significant progress will be made in 2014, as we work with the Legislature to harmonise those Agencies that have enabling laws, but which also have duplicative mandates.”

Continuing, Jonathan stated, “We have accomplished a number of goals in the Power sector reform programme in line with the Roadmap, including:  completion of new units at our thermal power stations, to increase generation; rehabilitation of existing power infrastructure, which has yielded up to 1,000 mega watts of additional electricity.

“Fast-Tracking three NIPP projects, which will bring an additional 1,055 mega watts by the end of the year; and facilitating a power and gas financing package, which includes Government Guarantees, proposed Infrastructure Bonds of about $1 billion, and $150 million of external funding from the African Development Bank to support continued gas supply and the liberalization of the power sector.

“We will remain prudent with our fiscal resources but also ensure that the Nigerian economy keeps growing and creating jobs.

“To this end, the government will continue with the medium-term theme and interventions that are consistent with the objectives of the Transformation Agenda.

“One key plank upon which our economic transformation is based is the achievement of macroeconomic stability. My Administration has made significant progress in putting the finances of the nation on a sound footing and laying the foundation for rapid and sustainable growth.

“We will stay focused on maintaining macroeconomic stability in Nigeria.

The budget will be altered —Mark

The Senate President David Mark, yesterday, spoke tough to the Executive arm of government that it should expect an alteration of the 2013 budget estimates, just as he warned that the lawmakers would not robotically pass the budget.

Mark told the President that what he presented were mere estimates and not immutable figures which members of the National Assembly would exercise their constitutional powers to do justice to the estimates.

He also told the President that the National Assembly would take into consideration the social and economic challenges the country was currently facing in the course of carrying out its constitutional power.

He said: “Our budgets, from my experience since 1999, have been dogged by three main areas of controversy. These are the time of presentation of the estimates to the National Assembly; whether the National Assembly has the constitutional power to make inputs on the budget estimates; and implementation of the budget.

“On whether the National Assembly has the power to make inputs to Appropriation Bills laid before it, our stand is that parliament is constitutionally empowered to make inputs. What the Constitution enjoins Mr. President to lay before the National Assembly are mere estimates, not immutable figures. And once the estimates are so laid, their consideration becomes subject to the constitutionally prescribed modes of exercising legislative power.

‘’Therefore, we do not think that the Constitution intended to turn the National Assembly into a mere mechanical rubber_stamp that must robotically pass budget estimates as presented.

‘’However, in exercising this constitutional power, we will be mindful of the fact that the social and economic challenges currently besetting our nation are the severest in our contemporary history. The National Assembly is also conscious of the fact that urgent steps need to be taken to address our dire infrastructural challenges.”

The Senate President who hailed the President on his timely presentation of the budget as against previous ones that were usually received late by the National Assembly, said: “It is gratifying to note that the 2013 Budget Estimates is being presented unprecedentedly in October, 2012. Yet, Mr. President, a compelling case can still be made for a consistently earlier presentation. This will allow for a meticulous and exhaustive consideration and debate and ensure that we work towards passing it before the end of the year.”

On implementation of budget estimates, Senator Mark said: “We believe that so long as our budgets are only partially implemented, the full benefits of your administration’s economic policies may not be accomplished.”

The Senate President who reminded the executive of one of its legislative functions of oversight to ensure that the budget was fully implemented and projects executed by the Ministries, Departments and Agencies, MDAs, said, ‘’When the 2013 budget is passed and signed into law, the National Assembly will deploy its weapon of oversight, more than ever before, to ensure accountability, probity, transparency and full implementation. The need to ensure the efficient utilisation of public finance for the promotion of the public good will be our guiding principle. We will work to ensure that the lofty developmental goals embedded in the budget are fully realised.

‘’Furthermore, we must strive to make our economy conform to global best practices. Experience has shown that the most virile economies are private sector driven. We advise that we continue to follow this time tested economic philosophy. It is important to ensure that the 2013 budget appropriately regulates the compass of the national economy and confronts our various economic, political and social challenges.

FG performance on budget unimpressive —Tambuwal

In his own remarks at the occasion, the Speaker of the House of Representatives, Rt. Hon. Aminu Tambuwal expressed the reservation of the Lower House over certain aspects of the budget proposal.

He explained that while passing a resolution on the Medium Term Expenditure Framework (MTEF)  for 2013_2015 last  Tuesday, the House had fixed the benchmark for the sale of crude oil at $80 per barrel for the purpose of reducing the deficit in the 2013 budget.

Tambuwal also reminded the President about the House’s earlier decision to embark on oversight trips to monitor implementation of the 2012 budget adding that interim reports which had reached him indicated that the Federal Government’s performance was unimpressive.

Said he : “ As I speak, interim field oversight reports from House Committees on the 2012 budget implementation are clearly unimpressive both in terms of releases as well as utilization and this is a great challenge to all of us. It is important to state at this point the clear provisions of Section 8 of the Appropriation Act to the effect that approved budgeted funds shall be  released to MDAs “as at when due”. This is sadly observed more in breach.”

He identified another source of concern for the Legislature  as the management of the excess crude revenues.

According to Tambuwal: “Since 2010 the Appropriation Act has legislated that the excess crude component of the Federation Account be operated under separate records for purpose of transparency and accountability. Besides, Section 30 of the Fiscal Responsibility Act makes it mandatory for the Budget office to submit budget implementation Assessment reports to the National Assembly and the Fiscal Responsibility Commission on a quarterly basis and to publish same on Ministry of Finance Website.

“The President may be unaware that the National Assembly is neither availed evidence of implementation of this policy along with the records of Federal Governments portion of the excess crude funds nor the quarterly implementation reports, as required under the two Acts.”

The Speaker further complained  that the National Assembly had become increasingly concerned about the disregard for its resolutions and public comments by certain functionaries of the Executive on same.

He  cited the Senate’s Resolution on the Bureau of Public Enterprises (BPE), the House Resolution on the state of insecurity of the nation, requesting Mr. President to visit and brief the House, the House of Representatives Resolution on the Security and Exchange Commission (SEC), the concurrent Resolution of the two Chambers on Bakassi among others.

He concluded that this situation  did not promote cordial relationship between the Executive and Legislature and consequently stability in the polity.

Jonathan to Senators, let us work together

President Goodluck Jonathan has appealed to Senators to join him in the transformation agenda of the Federal Government, in order to move the nation forward.

President Jonathan in a parley with members of the upper chamber yesterday at the Apo Mansion residence of the Senate President, David Mark, enjoined the legislators to work together with the executive for the common good of Nigerians.

Jonathan who also had some of his Ministers in attendance at the parley according to a statement signed by the Chief Press Secretary of the Senate President, Mr. Paul Mumeh stated that even though Nigeria runs a system of government that preaches separation of powers, there is the need for synergy between the various arms of government.

The statement reads in part, “Although, the Presidential system of government prescribes separation of powers, but our goals and interest are the same to wit; the welfare of our people and the development of our country.

“We face the same challenges, we face the same elections and the problems are the same, so, we must come together and work like a team to achieve the same goal.”

Jonathan said a harmonious relationship can be built between the executive and the legislature through constant social interactions, adding that it would provide avenues for both arms to come together to address any issue of conflict.

He also advocated for similar arrangements both at the zonal and the State levels so that the aspirations of the people could be met adding that the future of our people and the progress of our country should be paramount in our minds.

Earlier, in his remark, Senator Mark said the interaction between the executive and the legislature was aimed at celebrating our oneness and the similarity of purpose for the future of Nigeria and Nigerians.

Mark called for mutual cooperation between the two arms of government in order to bring the much needed development to the doorstep of every Nigerian.

Adding his voice, Deputy Senate President, Ike Ekweremadu reiterated the need for the executive and the legislature to work in harmony in the interest of all Nigerians and the survival of democracy.


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