BusinessDay 07 Nov 2017

4 BUSINESS DAY
C002D5556
Tuesday 07 November 2017
NEWS
LOLADE AKINMURELE; OKAFOR
ENDURANCE & DIPO OLADEHINDE
ers gather to discuss prolonging
historic production caps.
Brent crude was up 2.84 percent
to $63.83 per barrel on
Monday, according to Bloomberg
data.
Futures jumped 2 percent
in New York, closing above $55
a barrel for the first time since
July 2015.
“It is very positive for Nigeria.
We should begin to see improved
foreign interest in our fixed
income instruments and equities,
given that higher oil prices
spurs positive sentiments about
Nigeria,” said Ayodeji Ebo, managing
director at Lagos-based
financial advisory firm, Afrinvest
Securities.
“It sends a signal to foreign investors
that the Central Bank has
Saudi turmoil drives Brent crude to 28-months high
Oil reached levels last
seen more than two
years ago as traders
began to price
in geopolitical
risks from Saudi Arabian King
Salman’s anti-corruption drive
just weeks before major producfirepower
to defend the naira.”
Oil has advanced for four
straight weeks in New York on
signs that a global glut is shrinking
in response to output caps
implemented by the Organization
of Petroleum Exporting
Countries and allied producers
including Russia.
Higher oil prices is positive
for Nigeria, whose 2017 budget
is pegged against an oil price of
$44.5 per barrel.
It also holds upside for the
naira which has appreciated in
the past months against the dollar
helped in part by increased
CBN supply on the back of
higher oil revenue.
The naira traded at N360 per
Continues on page 34
Concerns mount over 2018 budget as Buhari...
Continued from page 1
tional Assembly under section 81
(1) of the Constitution.
(2) The sectoral and compositional
distribution of the estimates of
expenditure referred to in subsection
(1) of this section shall be consistent
with the medium term developmental
priorities set out in the Medium
Term expenditure Framework.”
BusinessDay was reliably informed
that members of House of
Representatives had not received
copies of the Medium Term Expenditure
Framework (MTEF)
and Fiscal Strategy Paper (FSP),
less than 20 hours before formal
presentation of the 2018 budget
estimates by the President.
Buhari is scheduled to lay the
N8.60 trillion budget estimates before
the joint session of the National
Assembly by 2pm today (Tuesday).
Abdulrasak Namdas, Chairman,
House Committee on Media
and Public Affairs via phone chat
told one of our correspondents that
copies of the MTEF/FSP sent to the
House penultimate week has not
been circulated.
“I have not seen anything yet,” he
said. “We have not done anything
yet,” the House spokesman explained.
He however assured that the
National Assembly will pass the
MTEF/FSP before considering the
2018 budget as stipulated by the
Fiscal Responsibility Act.
Johnson Chukwu, Managing
Director of Cowry Assets, in his reaction
say these kinds of delays and
developments violate provisions in
the Fiscal Responsibility Act 2007
and have grave implications for the
entire budget and economy just
coming out of a recession.
“The National Assembly should
consider the implications of considering
a national budget ahead
of their own review and approval
of the MTEF. This is because the
MTEF defines the parameters with
which the budget assumptions are
based on,” Chukwu told Businessday
in a telephone conversation.
“Ordinarily, I would have
thought that the Fiscal Responsibility
Act required that the MTEF/
FSP is considered ahead of the
presentation of the budget.
“But if the budget is now presented
ahead of the consideration,
though it has been submitted to the
NASS, it is not proper unless we are
going to assume that the assumptions
in the MTEF/FSP would be
adopted as they are, then there is
actually no need sending to the National
Assembly for consideration.
“The key to this is that we may
now go through the period of attrition
where the budget will now
be returned to incorporate the real
assumptions adopted by the NASS
and we keep going back and forth.”
According to the Medium Term
Expenditure Framework and Fiscal
Strategy Paper transmitted earlier
by the President to the National Assembly,
the aggregate expenditure
for 2018 fiscal year is N8.6 trillion
against N7.44 trillion for 2017, showing
a difference of N1.16 trillion or
15.5 percent increase compared to
the 2017 Appropriation Act.
Total sum of N6, 128,290,144,686
is expected from oil sector while
N5, 596,745,945,657 is expected
from non-oil subsector for the
incoming year.
Total sum of N350 billion proposed
for special interventions
(recurrent); N2,597,246,628,719
is for capital expenditure for
2018 while deficit is pegged at
N2,948,777,905,500 (2.61% of GDP).
The total oil production is pegged
at 2.51 million barrels per day while
budgeted oil production volume net
incremental was pegged at 2.3mbpd;
$45 oil benchmark; while exchange
rate was pegged at N305/$ for 2018
fiscal year.
The fiscal deficit is to be maintained
at 3 percent level as stipulated
in the Fiscal Responsibility
Act, 2007 but at an average of about
1.93 percent of GDP, but declining
to less than 1 percent by 2020.
Expected to accompany the
President to the National Assembly
chambers are key members of the
Federal Executive Council namely:
Udoma Udo Udoma, Minister of
Budget and National Planning and
Kemi Adeosun, Minister of Finance.
Others are: Ita Enang, Senior
Special Adviser to the President
on National Assembly Matters
(Senate) and Ismaila Kawu, Senior
Special Adviser to the President on
National Assembly Matters (House
of Representatives).
But ahead of the presentation of
the 2018 budget to a joint session
of the National Assembly today,
lawmakers from both chambers
have intensified their opposition
to the budget presentation.
Findings by BusinessDay revealed
that this may not be unconnected
with poor implementation
of the 2017 budget.
At an interactive session with
the joint committee on Appropriation
and Finance last month,
Finance Minister, Kemi Adeosun,
had put capital releases at just
N440.9 billion out of the capital
expenditure of N2.177 trillion for
the 2017 budget.
With speculations that the National
Assembly will embark on
Christmas break in the next five
weeks, it is yet to approve the
N135.6 billion virement, $5.5billion
foreign loan as well as 2017 budgets
of over 38 federal agencies.
Lawmakers are also unhappy
that the Executive is yet to release
Constituency Projects running into
N100 billion.
A top National Assembly source
insisted that lawmakers from the
two chambers are not in a hurry to
pass the budget unless the Executive
releases funds for constituency
projects, which they would showcase
to the constituents as the 2019
elections approach.
On Monday, it emerged that
the increasing tension around the
President’s bid to present the budget
proposal had degenerated to the
extent that some groups of lawmakers
had begun to perfect strategies of
truncating the budget presentation.
The body of opposition which
cuts across political and ethnoregional
boundaries in the National
Assembly anchored their protest
against the budget presentation on
what a lawmaker described as the
attempt by the Executive arm of
government to sabotage their political
fortunes in their constituencies.
“How else can one’s political
career be frustrated? Since 2015,
we have never had a single budget
that recorded 50 percent success in
terms of implementation particularly
with regards capital projects. We
had hoped that all these would be
corrected in the 2017 budget but
no! When we asked questions, no
concrete response is forthcoming;
and you expect us to just keep quiet
and allow the President to present
another budget that may go the
same way.
“Remember that the 2018 budget
is the last one to be executed
fully by this administration. What
will the President count as his
legacy in terms of budget implementation?
Also take note that
all these budget failures has very
damning effects on members of
the National Assembly who are the
real representatives of the people.
What do they expect us to tell our
constituents? It is really a sad moment
for us,” the source said.
•Continues online at www.businessdayonline.com