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2020 Budget: Senate approves revised MTEF/FSP, jerks up oil price benchmark to $28

By John Akubo and Azimazi Momojimoh Abuja
02 June 2020   |   5:08 pm
The senate yesterday approved the revised Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) as it jerked up the $25 per barrel oil price benchmark as proposed by the executive to $28 per barrel.

President Muhammadu Buhari presents the 2020 budget proposal to lawmakers on 8 October. Nigeria Presidency/Handout via REUTERS

….reduces oil production from 1.9mbd to 1.8mbd

The senate yesterday approved the revised MediumTerm Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) as it jerked up the $25 per barrel oil price benchmark as proposed by the executive to $28 per barrel.

It also reduced from 1.9million barrel per day to 1.8million gcrbarrel per day, oil production proposed by the executive in the MTEF/FSP documents due to the decision of cutting production by OPEC which Nigeria is a member.

This is as it declared monies kept in the Natural Resources Development Accounts as waste.
Senate’s decisions to these effects, were sequel to consideration and adoption of report of its committee on Finance , mandated to work on the revised MTEF/FSP documents by the executive .

Other critical parameters such as exchange rate of N360 to a US dollar, 14 .43 inflation growth rate, 4.42 GDP growth rate were retained .
Their resolution they said is predicated on current realities and downturn in the global economy.

This was coming after the senate committee on finance presented its report on the revised 2020-2022 MTEF and FSP through its chairman senator Solomon Adeola.

Other assumptions as well as proposals retained are N5.09 Trillion FGN’s revenue, N10 .51 trillion proposed expenditure , N4.95 Trillion fiscal deficit, N4.17 Trillion new borrowings ( including Foreign and domestic Borrowing;.
Others are N398.5 Billion as Statutory transfers, N2.68 Trillion for debt serving, N272.9 Billion as sinking fund, N536.7 Billion for Pension and gratuities.

The upper legislative chamber also retained the Critical components of the proposal as presented by the executive with adoption of N10.51 Trillion as total expenditure , N4.93 Trillion as total recurrent, N2.83 Trillion for personnel cost and N2.23 Trillion for capital expenditure .

The Chairman of the Committee, Senator Solomon Adeola ( APC Lagos West) in his submission said the increase effected on the oil price benchmark was as a result of the recent upward trend of the crude oil market which as today stood at $38 per barrel with a very strong expectation that the price will rise to as $40 to $45 per barrel.
In his remarks after the adoption of the report, the President of the Senate, Ahmad Lawan, urged the Senate Committee on Privatization to laise with the Bureau of Public Enterprise ( BPE) in ensuring that the projected N260billion from proceeds of privatized agencies, is realised and accordingly used to fund the budget.
He frowned at some of the special accounts being kept by the executive, particularly the Natural Resources Development Accounts, saying that such accounts at this time of scarcity of funds to finance the budget are not all that necessary.
“Keeping monies in Natural Resources Development Accounts is more of waste than serving critical purposes”, he said .

He thereafter adjourned sitting of the Senate to Tuesday next week for consideration and possible passage of the revised N10.509 trillion 2020 budget .

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