Amidst contradictions in the Medium Term Expenditures Framework and Fiscal Strategy Paper presented by President Muhammadu Buhari, the Senate on Thursday passed a resolution to increase the total proposed expenditure of the 2020 Budget from N10.002 trillion to N10,729.4 trillion.
This was part of the recommendations of the Joint Committees on Finance on the 2020-2022 MTEF/ FSP of the National Assembly.
Chairman Senate Committee on Finance, Adeola Olamilekan presented the report to the Senate at plenary yesterday.
The Senate premised its decision to jerk up the budget estimate based on the observations of the Joint Committees during a public hearing on the MTEF that the salaries and remunerations for the proposed recruitment of 30,000 personnel in Police, Army, Immigration and Civil Defence were not captured.
President Buhari is expected to present the budget next Tuesday to the joint session of both chambers of the national assembly.
The joint Committee report frowned at the attitude of the apex bank, the Central Bank of Nigeria for what it called under-disclosure of the e-collection of stamp duties. The Committee equally “observed that the activities of the Nigerian National Petroleum Corporation as it relates to the cost of production of crude oil is shrouded in secrecy, the direct deduction of cost from revenue without recourse to relevant agencies of government is unacceptable.”
Speaking on the sharp practises of the IOCs involved in the upstream sector, the lawmakers called for decisive actions to instil sanity in the industry.
Senator Gabriel Suswam lamented that in both the Joint Ventures Operations (JVO) and the Production Sharing Contracts, ( PSC) Nigeria was at the mercy of the IOCs.
He said: “Joint ventures are contracts in partnership with the NNPC on behalf of the federal government. In those JV where six are the major ones, if we are not raising any money and we continue to pay the JVO, there is a problem with that. We go into partnership with IOC in order for us to raise money to finance our budget and then, we are not getting anything.
” If we enter into a contract with the IOCs whether it is joint ventures or production sharing formula and we are not getting even a dime from any of them, to finance our budget. What is the essence of staying in those contracts?”
Senator Dino Melaye said relevant committees of the Senate should insist that the NNPC deploy modern technologies to checkmate the excesses of the IOCs. He mentioned oil-producing nations like Saudi Arabia and Venezuela that use Information Communication Technology to carry surveillance around its oil facilities.
Senator Ayo Akinyelure faulted the N200 Billion revenue target projection by the CBN from the e-collection stamp duties. He said revenue from the account domiciled with the apex bank was enough to fund the budget deficit put at N2.28 trillion.
“It is important to know that we are here for serious budget and change the narrative. Revenue projection is grossly under-declared. Only projection of N200billion from stamp duty is under-declared. This particular item must be investigated.
“From stamp duty only we can fund our budget, comfortably. Why must we borrow? We must look out for leakages to be able to finance our deficit budget. We must tackle multiple exchange rate because it is fraught with a lot of fraud.”
The Senate adopted the Committee recommendations of proper investigation of the e-collection stamp duties domicile with the CBN to show probity, accountability and increase the revenue base of the country.
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Having noted that the country was being shortchanged by the International Oil Companies (IOCs) in its Production Sharing Agreements, the Senate similarly adopted the recommendations for the immediate amendment of the National Assembly Act on the PSC with the IOCs.
The lawmakers were unanimous in their reservations over the staggering budget deficit of N1.7 trillion which they noted was as a result of an increase in public expenditures but further demanded corresponding increase in the drive to shore up government revenue.
While the Senate observed increase in revenue target of the Nigeria Customs Service of N942.6 Billion to N1.5 trillion, ” as a result of the performance of the revenue-generating agency in the last 9 months with 3 months still outstanding, they recommended that 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 the Ministry Department and Agencies by N357 billion, from N1.01 trillion to N1.367 trillion”
The President of the Senate, Ahmad Lawan in his remarks after the Senate adopted all the 16 recommendations of the Senator Adeola Finance Committee report on the MTEF/FSP called on the revenue collection agency, the Federal Inland Revenue Service, (FIRS) to expand its network towards boosting the revenue base of the federal government. He equally called on the Executive arm to increase its drive for the diversification of the economy.
“We are optimistic that President Muhammadu Buhari will present the budget next week. The FIRS must be tasked by our relevant committees, to expand its net.
” Time has come for us to diversify the economy, We must look at agriculture, solid minerals and tourism. We believe that we can get a lot from that. Our Procurement process must be monitored, we should be able to do that to stop over-invoicing or inflating the cost of projects.
“The Senate is determined to engage the heads of revenue agencies, regularly, to see how we can make them effective, where they have outlived their usefulness, we need to streamline some of them.”
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