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Senate to pass N466bn supplementary budget next week
There are strong indications that the Senate will next week pass the 2015 supplementary appropriation bill of N465, 636,926,857 billion.
The 2015 Supplementary Appropriation Bill passed the second reading yesterday after it was presented for consideration by Senate leader, Senator Ali Ndume, APC, Borno South.
In his lead debate, Senate leader, Senator Ali Ndume said that the bill seeks to authorize the issue out of the Consolidated Revenue Fund of the Federation the total sum of N465,636,926,857, of which N460,636,926,857 is for additional recurrent (Non-Debt) and the balance of N5,000,000 is for contribution to the development fund for additional capital expenditure for the year ending on the 31st day of December, 2015.
Ndume said that the president, through a communication to the president of the Senate forwarded the 2015 Supplementary Appropriation Bill to the Senate which was read on the floor of the Senate on Wednesday 18th November, 2015 by the President of the Senate.
Speaking yesterday, Senate President Bukola Saraki who referred the Bill to the Senator Danjuma Goje led appropriation committee, gave the committee one week to submit its report.
It will be recalled that the Senate on Wednesday last week received a supplementary budget of N465,636,926,857 from President Muhammadu Buhari for consideration and approval.
President Buhari who also sought an upward review of the new borrowing plan from N882.1billon to N2.103trillion, had said, “The expected deficit arising from the above is projected at 2.103 trn or 2.19 per cent of GDP to be financed by additional borrowing of 1.601 trn through the debt management office.”
In a letter to the Senate President, President Buhari had explained that the supplementary budget would be predicated on oil production of 2.2003 million barrels per day, with benchmark price of US$48 per barrel and an exchange Rate of N190 to US$1.
According to the president, of this amount, N413,363,134,505 would be for fuel subsidy payment( PMS), just as N10,618,837,435 has been proposed for the payment of outstanding severance gratuity and allowances of outgone and incoming legislators and legislative aides.
Buhari who also sought a review of the fiscal deficit from 1.09 percent of GDP to 2.19 percent, in the letter had said, “the Senate President, you may wish to recall that the 2015 budget was predicated on oil production of 2.2782million barrels per day, benchmark oil price of US$ 53 dollars per barrel and an exchange rate of 190 to US$1.00. Based on these key assumptions, the following fiscal budget was projected: FGN budget revenue of N3.452 trillion made up of share of oil and minerals revenue- 1.645trillion; share of non oil revenue N1.215 trillion; FGN Independent revenue N489.3 billion.”
“FGN’s aggregate expenditure was estimated at N4.485 trn, comprising of statutory transfers-N354.34 billion; debt service-953.6 billion; recurrent Non- debt (personnel costs)N1.828 trillion; recurrent non debt overhead N791. 2billion; capital expenditure, N536. 6 billion.
“However the implementation of the FGN2015 budget has been fraught with significant revenue shortfalls due to continuous decline in oil price, oil production shortfall and non full non oil revenue.
“You may wish to further note that owing to the need to sustain the current progress in addressing the security challenges and other important obligations of government, emergency expenditure items required urgent funding is projected at 465.64 bn.
“Please see below breakdown: Operation Lafiya Dole, N39.65 billion; provision for Prison rations, feeding for Unity Schools and others, N2.00 billion and emergency provision for Subsidy claims, N413.36 billion.
“Given this new level of expenditure and revenue constraint, the 2015 Budget which has a projected Fiscal Deficit of N1.041 trillion or 1.09 per cent in GDP, with the deficit largely financed by the Domestic Borrowing of N502.1 billion and Foreign Borrowing of N380. billion making a total borrowing amounting to 882. 12 bn.
Call for additional borrowing- The expected deficit arising from the above is projected at N2.103 trillion or 2.19 per cent of GDP to be financed by additional borrowing of N1.601 trillion through the Debt Management Office.
“Accordingly, I deem it necessary to formally request the concurrence of the National Assembly to please consider and approve: An upward review of the fiscal deficit from 1.09 per cent of GDP to 2.19 per cent of GDP.
“An upward revision of the new borrowing from N882.1 billion to 2.103 trillion.
“A new funding requirement to address security challenges and other important obligations with the sum of N465.64 billion.
“The 2015 budget revised revenue framework is also attached, also attached is supplementary appropriation bill 2015.”
Source - VANGUARD
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