ACTING President, Dr. Goodluck Jonathan. yesterday signed the 2010 Appropriation Act into law, pledging that it will accelerate the nation's economic recovery through targeted fiscal interventions.
The N4.6 trillion budget is predicted on an oil production capacity of 2.35 million barrels per day, an oil price benchmark of $67 per barrel and an average exchange rate of N150 to the United States (U.S.) dollar.
In November 2009, the National Assembly was presented with a budget proposal of N4.4 trillion, which it reviewed and jerked up to N4.6 trillion. The Bill which contains a deficit of N1.52 trillion or 4.66 per cent of the Gross Domestic Product (GDP).
The 2010 budget as signed by the Acting President pays special attention to the development of critical infrastructure in the areas of power, efficient transport system, provision of opportunities for food security and wealth creation, enhanced education and healthcare services, physical security and access to justice, sustainable economic and political empowerment, security and development in the Niger Delta and across the nation.
The signing ceremony, conducted at the Council Chambers of the Presidential Villa, Abuja, was witnessed by the President of the Senate, David Mark, the Acting Speaker of the House of Representatives, Usman Bayero Nafada, Deputy Senate President, Ike Ekweremadu, other members of the leadership of the National Assembly and members of the Federal Executive Council (FEC).
Jonathan noted that with the signing of the appropriation bill, it was now left to the ministries, departments and agencies (MDAs) of government to rapidly utilize the provisions of the budget to accelerate initiatives to enhance the pace of national development.
According to the the Acting President, the reconstituted FEC understands the importance of delivering on the present administration's promises to Nigerians, directing all the ministers in the cabinet to ensure proper and efficient administration of their sectoral budgets.
Jonathan said increased emphasis would be placed on monitoring the deliverables of MDAs by tracking the output of the financial and other resources appropriated under their stewardship.
Towards this, "the office of the Hon. Minister for Special Duties will be structured and empowered to undertake the task of monitoring and evaluation of all government projects and activities. This administration will quickly move to identify and resolve impediments to implementation, rewarding excellence in performance and applying sanctions where otherwise."
While thanking both Chambers of the National Assembly for their invaluable contribution to the budgeting processes, Jonathan, however, noted that the Executive pointed out certain aspects of the appropriated expenditure which the leadership of the Legislature has agreed would be resolved.
According to the Acting President, "in November 2009, this administration presented a budget proposal to the National Assembly for their consideration and passage into law. This proposal as subsequently amended was for an aggregate expenditure of N4.4 trillion, with a deficit of N1.32 trillion, or 4.05 per cent of GDP. After due consideration of the budget proposal, the legislature passed an Appropriation Bill of N4.6 trillion, with a deficit of N1.52 trillion or 4.66 per cent of GDP. However, we in the Executive have pointed out certain aspects of the appropriated expenditure, which the leadership of the legislature have agreed will be resolved. The 2010 Budget is based on certain assumptions reflecting our outlook for the fiscal year, including: Oil production of 2.35mb/d; benchmark oil price of $67/barrel; average exchange rate of N150 to the U.S. dollar."
In meeting the aspirations of Nigerians, Jonathan noted that "increased emphasis will be placed on monitoring the deliverables by MDAs by tracking the outcomes and outputs they achieve with the financial and other resources appropriated in the budget, over which they have stewardship. In this regard, the office of the Hon. Minister for Special Duties will be structured and empowered to undertake the task of monitoring and evaluation of all government projects and activities. This administration will quickly move to
identify and resolve impediments to implementation rewarding excellence in performance and applying sanctions where otherwise."
Meanwhile, the All Nigeria Peoples Party (ANPP) caucus in the House of Representatives yesterday faulted the Federal Government's plan to secure a $915 million loan facility from the World Bank, arguing that the development was not necessary.
This came after the House of Representative on Wednesday gave assent to the letter from Jonathan requesting the approval of a foreign loan totalling $915 million. Explaining the rational for the loan, Jonathan stated that the country was in dire need of the facility to enable it to fund the huge infrastructural deficit critical to rapid development.
"The World Bank portfolio of the facilities totalling $915 million out of which $179 million would be drawn in the 2010 fiscal year is of particular essence as it would be deployed to urban water and transport, human capacity development and power infrastructure across the country", he said.
But addressing a press conference on the matter yesterday, spokesman of the group and Minority Leader in the House, Mohamed Ali Ndume wondered why the Acting President was in a hurry to obtain a loan facility when the country could not justify the usage of its excess crude.
"If the country is currently producing crude oil at about 1.02 mb/d, and the market price today is about $80 against the $50 benchmark in the 2010 budget, there is no justification for borrowing", he said.
"If you take 1.02 million barrels of crude oil in a day and you multiply it by $80 you are going to get conservatively more than $800 million."
"So, if a country like Nigeria can earn conservatively $500 million in a day, why would you go and mortgage the future of your children and grand children?
"We know what we went through when the country was owing the Paris Club. Nigeria had to make serious sacrifice during the Obasanjo administration in order for us to get out of the lenders' grips.
"Why would Jonathan allow, just because of the interest of a few individuals that are agents of the so-called World Bank, mortgage the future of our poor people for their selfish interest? I cannot see any reason why our country that just came out from a borrowing situation would go back to borrowing no matter how attractive it is," he said.
Ndume, who earlier protested, but could not stop the approval through a resolution of the House during the debate on the floor, expressed regrets that details of the 2010 borrowing plan were just made available in a 235-page booklet to members mid-way into the sitting. He said the resolution was hastily passed by his colleagues without studying and understanding the implications.
"As a leader, I just received a copy of this bulky document on the floor and they expected members to just rubber-stamp and approve it. If the country is earning about $500 million daily, why should they borrow money?", he asked.
He further noted that no mention was made on the proposed loan at their Tuesday's meeting between the leadership of the National Assembly and the Acting President where the grey areas and other issues of discrepancy in the 2010 Appropriation Bill were trashed.
He also explained that he had personally told the Acting President that his party (ANPP) would go to any length in protest against the plan to increase the Value Added Tax (VAT) from five to 10 per cent, just as he equally vowed to personally mobilize the organised Labour in protest, if government increased the VAT.
Speaking further, Ndume accused the Peoples Democratic Party (PDP) administration of trying to favour some individual's interest, who, according to him, are friends of the World Bank, and that if allowed to be properly scrutinized, there may be harsh conditions attached to the loan, such that the funds could not be flexibly applied.
Earlier on the floor yesterday, Deputy Leader of the House, Baba Shehu Agaie had moved the motion for the approval of the loan, urging the House to pass the resolution as the 2010 borrowing plan was part of the 2010 budget of the federation.
The Chairman of the House Committee on Finance, John Enoh and the Chairman, Rules and Business Committee, Ita Enang expressed support for the approval, arguing that the loan was meant to finance critical areas of the budget.
But Ndume and the Deputy Minority Leader, Suleiman Abdurrahman Kawu, opposed the motion, arguing that the House had earlier kicked against such external borrowing.
The House had recently, sequel to a motion sponsored by John Halims Agoda urged the executive arm to stop a planned move to obtain $300 million foreign loan, pointing out that the country was just settling down after being offered debt relief by the Paris Club of Creditors.
But the Minister of Finance, Mr. Olusegun Aganga, yesterday said that reports that the Federal Government would borrow about $950 million to finance the budget is "absolutely wrong."
Aganga told journalists after witnessing the signing of the 2010 budget by Jonathan that the government would not borrow $billion to fund the budget.
Instead, he said that the deficit in the budget would be financed through other sources of revenue, which include sale of some assets and the raising of about $500 million bond at the international market.
According to the minister: "This is absolutely wrong. We are not borrowing a $billion to fund the budget, I think what they are referring to is something which we are working with the World Bank. And the World Bank as you know help a number of developing countries. And that is just a quantification of the work they are doing which is broken down to quite a few segments, maybe eight or nine of them. So, it is not one billion dollars borrowing upfront, it doesn't work like that. It has nothing to do with the budget."
Aganga further explained that the government had made it clear on how it intended to finance the budget deficit of about N1.52 trillion.
He said: "There are other sources of revenue in which we are looking at. There was some mention of sales of some assets and it has been mentioned that we are going to raise a bond this year. We are going to the international capital market this year of about $500 million. But I think the most important thing we should understand is that in a recession, there is nothing wrong about spending, in fact if you look at any of the Western world, they all have deficit. The deficit is growing at an alarming rate. So, the most important thing for us is to make sure that in spending, we get good value for the money spent, that it is spent in areas where we generate both social and economic returns, that is what is critical and that is why we should all be pleased that the Acting President made it very clear today that this administration is going to be heavily focused on the execution of the budget, is going to be heavily focused on how money is been spent and the minister in charge of special duties has being mandated to handle that, so you will see changes in that direction."
On the Joint Venture Cash Calls account (JVC) on the 2010 budget, the minister said: "It will not in any way affect the budget. We are looking into it already."
Aganga also spoke on the just signed 2010 budget, saying: "It is something that is going to help the growth of the economy and it is something that we have been waiting for and it is something that has been done. My focus now will be on three major things: One is about the management of our revenue, which will make sure that there are no linkages, making sure that we risk manage whatever we need to risk manage. Secondly, we are looking at what will be enhancing the quality of spending. It is okay to spend but it is important that you spend wisely and people are held accountable."
No comments:
Post a Comment