FG to allocate new oil licences to fund 2017 budget •Recovered loot also to be utilised

THE Federal Government, on Tuesday, said it will issue new oil licences early in the year and review the current joint venture arrangements with oil companies, in order to fund the 2017 budget.

This was as the government revised its projections for the 2017 budget, while also changing the projections contained in the Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP).

Minister of Budget and National Planning, Senator Udoma Udo Udoma, who appeared before the joint committee of the Senate on Appropriation and Finance, on Tuesday, said that budget size had been moved from N6.6 trillion to N7.298 trillion.

He also said the government would review marginal oil fields and mount pressure on revenue generating agencies to surpass expected targets for revenue.

Udoma Udo Udoma, who told the Senate Joint Committee that the country could only be revived from recession by pumping more money, said the budget size for 2017 would stand at N7.2 trillion.

He also said the Federal Government was expecting a revenue collection of N10.6 trillion made up of oil receipts and other sources, adding that the 2017 budget would be funded with the recovered looted funds, including the $320 million (N97 billion) recovered from Swiss government and another N261 billion in assets and fines recovered locally.

The minister said crude oil benchmark for 2017 budget would remain at $42.50 per barrel up from $38 per barrel for 2016, while the government projected a daily oil production of 2.2 million barrels per day.

The government also projected the Naira exchange rate at N305 to the US dollar, which is up from the 2016 projection of N197 to the dollar.

The minister said of the targeted N10 trillion revenue, the government hoped to make about N5 trillion from oil sales, while the non-oil sectors are expected to rake in about N5.06 trillion.

He said the revenues were expected from corporate and company taxes, Nigeria Liquefied Natural Gas (NLNG), stamp duties, Capital Gains Tax, Value Added Tax (VAT), Customs, Excise, fees, surcharges on luxury items, special levies and Federal Government independent revenue.

Out of the N7.2 trillion budgets, the government expects to spend N1.488 trillion on debt servicing for domestic debts. The sum of N1.307 trillion was expended on a similar subhead in 2016.

On foreign debts servicing, the government also expects to spend N175.882 billion. The sum of N54.480 was committed to that subhead in the 2016 budget.

The new document submitted by the minister to the senators also indicated that the government had increased its projected aggregate capital expenditure from N1.939 trillion to N2.243 trillion, while the new figure for recurrent non-capital expenditure is N2.629 trillion, up from initial projection in the MTEF put at N2.5 trillion.

The document also projects that the government intends to borrow a total of N2.321 trillion out of which N1.253 will be sourced locally and another N1.067 borrowed from foreign sources.

In 2016, the government borrowed the sum of N1.182 locally and N635.8 billion from foreign sources.

While addressing the lawmakers, Senator Udoma said: “I know N7 trillion seems larger than N6 trillion. In actual dollar term, the 2017 budget is smaller. We have had challenges in revenue generation in funding the 2016 budget. We are trying to get to the bottom of revenue generating agencies in order to raise more money.

“On independent revenue, he said the government needs to work with the National Assembly. The issue of 80 per cent of operating surplus is a problem.

“We need to work the National Assembly to review certain clauses of the law. We need to be more imaginative and creative in order to get out of the problem we have with revenue generating agencies.

“We want to issue a presidential order to ensure that revenue generating agencies are unable to spend money unless payment of salaries until their budgets are passed.

“We want to be more engaging in the Niger Delta to ensure that there is peace in order for us to produce. We will be increasing the amount for the amnesty programme to the old figure. It is important to engage the people in the Niger Delta region,” he said.

Also, the House of Representatives, on Tuesday, committed the 2017-2019 MTEF and FSP to the committees on Finance, Appropriations, National Planning and Economic Development, Legislative Budget and Research and Aids, Loans and Debt Management, to scrutinise and make recommendations to the House.

The House, before passage, faulted key assumptions in the MTEF document as presented by the executive.

This is coming just as the House passed a resolution admitting President Buhari into the chamber for presentation of 2017 budget estimates today.

The House resolution followed the adoption of a motion moved by House Leader, Honourable Femi Gbajabiamila, entitled: “admittance into the Chamber” of President Muhammadu Buhari and his entourage.

Gbajabiamila, while moving the motion, said “pursuant to Order 19, Rule 8, do admit the president, Commander-in-Chief of the Armed Forces and his entourage for the purpose of presenting an address to a Joint Sitting of the National Assembly on  the 2017 budget estimates on Wednesday, December 14, 2016 at 10.00 a.m.”

The time was, however, amended to 12 noon.

Debating the MTEF document, most of the lawmakers kicked against the key assumptions in the proposal, especially oil benchmark, exchange rate, amongst other and appealed to the government on the need to end militancy in the Niger Delta and insecurity in the North-East.

The assumptions on crude oil production indicated 2.2 million barrel per day in 2017; while 2.3 mbpd in 2018; and 2.4mbpd in 2019, this the lawmakers said was unrealistic.

Deputy Speaker, Honourable Lasun Yusuf, in his contribution, was particular about the crude oil benchmark, saying that the price of oil at the international market was not encouraging.

Honourable Kayode Oladele said the exchange rate of N290 to a dollar for 2017 was unsustainable, as, according to him, exchange rate as of Tuesday stood at between N480 and N490 to a dollar.

The House minority leader, Honourable Leo Ogor, in his own contribution, said the source of funding of the budget was not clear, adding that the assumptions must be very close to reality.

Meanwhile, President Muhammadu Buhari is expected to present the 2017 budget estimates to a joint session of the National Assembly today.

In the same vein, the Senate President, Dr Bukola Saraki, declared on Tuesday Senate would not rubber-stamp the budget as presented by the executive.

Saraki, who spoke through the Senate leader, Ali Ndume, said the National Assembly was critically reviewing the revised MTEF and the FSP) and would ensure realistic projections.

He told a civil society group, Centre For Social Justice, led by Eze Onyekpere, that the Senate would not just rubber stamp the budget after its presentation.

He said the National Assembly placed much premium on the MTEF and FSP, since it forms the basis for the annual budget.

Onyekpere, in his speech had told the Senate President that the Senate needed to prevail on President Buhari to submit the debt limit of the three tiers of government, in accordance with Section 40 (1) of the Fiscal Responsibility Act 2007.