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Senate stops spending of Excess Crude Account, passes MTEF, pegs exchange rate at N305
THE Senate, on Tuesday, passed the 2018 budget estimates through the second reading after an exhaustive debate on the general principles of the budget estimates.
The lawmakers, who did most of the debate up to Thursday last week, voted to pass the appropriation bill through the second reading on Tuesday.
Also on Tuesday, the lawmakers stopped the Federal Government from further spending from the Excess Crude Account.
The Excess Crude Account was created under the administration of former President Olusegun Obasanjo to retain funds collected by the government in excess of the budget benchmark.
The lawmakers said the law was explicit on how funds accruing to the government should be spent, but that the executive arm deliberately refused to revert to the National Assembly to get approval before spending it.
The decision was taken as part of the passage of the 2018-2020 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP), which was passed on Tuesday.
The Senate adopted the recommendations of its Joint Committee on Finance and Appropriation, which indicated that the parametres for 2018 budget should include 2.3 million barrels per day for oil; $47 per barrel as the benchmark price for 2018 and N305 to a dollar as the official exchange rate.
The Senate also approved the projected N5.279 trillion for non-oil revenue in 2018, as well as N1.699 trillion for new borrowing for 2018 fiscal year.
The senators equally approved 3.5 per cent growth rate for the fiscal year.
Deputy Senate Leader, Senator Bala Ibn N’Allah, who raised the suggestion to stop the spending of Excess Crude Account, said the move to stop the “reckless spending” of non-budgeted funds by the executive arm was to ensure that the rule of law was followed.
“I am sorry to use this phrase, ‘reckless spending’. That is what the executive has been involved in. Every year, it spends excess funds realised from the sale of crude oil without any approval from the National Assembly.
“The Central Bank of Nigeria (CBN) opened an account called Excess Crude Account. All the extra money realised from the sale of oil are paid into this account. This is despite the fact that the law states that such money should be paid into the Federation Account.
“Going forward, I recommend that we insert in the 2018 budget, a clause to stop the executive from spending excess funds realised from the sale of oil without approval by the National Assembly,” he said.
The 2018 appropriation bill also scaled second reading in the Senate.
The N8.612 trillion budget proposal was submitted to the lawmakers in a joint session on November 7.
The lawmakers, thereafter, adjourned sittings for two weeks, to enable the committees to work on the budget while further considerations of the budget would resume on December 19.
Senate President, Dr Bukola Saraki, while rounding off deliberations on Tuesday, asked the committee on Appropriation to ensure that public hearings were held on schedule.
He also advised government ministries, departments and agencies (MDAs) to respond promptly to the enquiries from the standing committees, adding that any heads of MDAs who avoided the defence would be sanctioned.
Also on Tuesday, the House of Representatives passed for the second reading, the N8.6 trillion 2018 budget estimate.
Speaker, Honourable Yakubu Dogara, consequently directed the committee on Appropriation and all standing committees of the House to commence further legislative work on the budget.
The House also passed the MTEF and FSP and approved $47 oil benchmark for the 2018 budget.
In considering the MTEF/FSP, the lawmakers approved 2.3 million barrel per day, while it increased the oil benchmark to $47 from the $45 earmarked by the executive.
Also, the lawmakers okayed N305/$ as the exchange rate for the 2018 fiscal year, while they called on the CBN to adopt measures to close the gap between the parallel market and the official exchange rate.
The House also adopted the projected N5.279 trillion for non-oil revenue and charged revenue generating agencies to up their ante and reduce loss.
The N1.669 trillion borrowing proposed in the 2018 budget was agreed to, but, therefore, warned that borrowing by the government must be tied to projects.
The House equally resolved to amend the Fiscal Responsibility Act and other extant laws while the 3.5 per cent growth rate be adopted, especially with the latest figures indicating a doubling of growth rate to 2.4 per cent.
The House, during the committee on supply, chaired by both the Speaker and his deputy, Honourable Lasun Yusuf, approved the $350 million loan request by the Kaduna State government.
It, thereafter, adjourned plenary till December 19 to allow members carry out oversight function and to engage MDAs on 2018 budget defence.