The Senate has said a review of the 2020 budget for practicable implementation due to “difficulties in the funding the 2020 Appropriation Act as passed by the National Assembly” has become inevitable.
This new approach to 2020 budget by the upper House of the Nigerian parliament is a consequence of the “the sharp drop in the crude oil price which is creating difficulties in funding the 2020 Appropriation Act,” the report of the Senate joint committees of Finance, Appropriations, National Planning and Petroleum Resources (Upstream) stated.
The Senate had in its plenary of Tuesday, March 10, charged the committees to look into the current economic realities and report back to the Senate on a weekly basis or when the need arises, by interfacing with the relevant stakeholders in the Executive and business community with the intention of bringing out suggestions, solutions and way out of the present economic realities.
The committee in its report read by Senator Solomon Olamilekan, chairman Joint Committee and chairman Committee on Finance to plenary, made this submission among others.
The committee further stated that “the downsizing of the Appropriation Act 2020 as passed by the National Assembly is inevitable, but the modalities to be adopted in the reduction of the budget must be used as suggested by the Appropriation chairman and agreed to by the Joint Committee;
“That the revenue-generating agencies must be alive to their responsibility in line with the Fiscal Responsibility Act passed by the National Assembly and other relevant laws of the National Assembly;
“That other issues affecting the oil sector such as cost of production of a barrel of crude oil and any other matter taken care off in PIB.”
The joint committee chairman said these were part of the short term measures considered.
He noted that the committee in carrying out its mandate took into cognisance the current Appropriation Act 2020 passed by the National Assembly; the cost of production of a barrel of crude oil compared with the other counterparts in the Petroleum Producing Countries and reality of the current situation of the government in terms of the number of agencies and parastatals of the government putting into perspective the Oronsanye Panel Report which called for collapsing about 102 agencies of government.
Senator Olamilekan also pointed out that there was the need to prioritise both the social and the real sector of the economy looking at their importance to the overall benefit of Nigeria; loss of revenue as a result of gas flaring which runs into several billions of dollars.
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Further areas of consideration by the committee he said was the devaluation of Naira and the removal of oil subsidy among other sundry issues.
Senator Olamilekan added that “also as part of the fact-finding mission of the Joint Committee on the effect of the Coronavirus/COVID-19 and the sharp drop of crude oil price, we sought and receive different views from experts in finance and economy on the state of the economy and other wide range of issues as it affects the economy. These include:
“Devaluation of Naira: while the Federal Government has come out to tell Nigerians that devaluation of Naira is not on its agenda as the recent drop in the price of oil necessitated the recent drop in the value of Naira and rise in the value of Dollar, which experts believe will be over as soon as a solution is found to COVID–19 and the price war between OPEC members i.e Saudi Arabia and Russia is over.
“Also, experts believe that fund from internal loans and bonds sourced from the capital market should be mobilised to fund infrastructural development, a model exemplified by India with a population of 1.1 billion people, as this will be much cheaper for us as a nation.
“Allowing fund taken out of the country to be returned back into the economy without destroying the anti-corruption war of the President by providing a legal instrument to ensure the return of this fund.
“Experts believe it is time Nigerian should start to look beyond oil as a major source of revenue to the Government and ensuring proper diversification of the economy.
“Experts noted that our shallow policy in Agriculture is responsible for our dependency on oil as our major source of income. The government should show more commitment in returning the country as a major leader in agricultural produce both within and outside the African continent e.g Nigeria was the leading producer of cocoa but as over taken over by C as number one producer, since the advent of crude oil.
Other members of the joint committee include Chairman Committee on Appropriations, Sen. Jibrin Barau; Chairman Committee on National Planning, Sen. Olubunmi A. Adetunmbi; Chairman, Petroleum Resources (Upstream), Sen., Albert Akpan Bassey.
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