Senate Passes 2015 MTEF, Approves $52 Oil Price Benchmark

Ministerial NomineesThe Senate has passed the Medium Term Expenditure Framework (MTEF) and Fiscal Policy Paper (FSP).

The Senate at plenary on Wednesday set the benchmark price of crude at $52 dollars per barrel, against the benchmark price of $65 dollars per barrel set by the Federal Ministry of Finance.

The Senate also set an exchange rate of one hundred and ninety naira to one dollar against one hundred and sixty five naira to the dollar set by the Ministry of Finance.

The Chairman Senate Committee on Finance, Senator Ahmed Markarfi, said the benchmark price of crude was reviewed lower because of the falling price in the international market.

The Senate also approved the reduction of recurrent expenditure from N2.6 trillion to N2.4 trillion and increased capital expenditure from N633 billion to N700 billion.

2013 Budget: Experts Discuss Matters Arising

Three financial Analysts, Odilim Enwegbara, Eghes Eyienyen and Martin Udogie on Saturday examined some of the challenges and controversies surrounding the 2013 budget that was recently signed into law by President Goodluck Jonathan.

While speaking as guests on Channels Television’s weekend programme, Sunrise, the analyst examined the effect of the National Assembly stance of ‘no budget’ for the Security and Exchange Commission (SEC), the oil benchmark controversy between the lawmakers and the presidency, constituency projects and the issue of economic growth.

Recall that President Jonathan on Tuesday assented to the 2013 Appropriation Bill, ending the long-drawn disagreement between the executive and the legislature over the bill.

The president signed the N4.987 trillion budget passed by the National Assembly into law at a quiet ceremony witnessed by a few government officials.

The budget was transmitted to the presidency on January 15 and since then, the executive and the legislature had been holding meetings to resolve some grey areas identified in the document.

Among the areas of disagreement between the executive and the legislature are the inclusion of constituency projects in the budget and the provision of zero budget for SEC.

In the video below Messrs Enwegbara, Eyienyen and Udogie discuss these issues and what the 2013 means for the Nigerian economy.

Sanusi calls for fiscal prudence (Video)

Ensuring fiscal responsibility and prudence in spending is one way the Nigerian Capital Market and indeed the Nigerian economy can thrive.

The governor of the Central Bank of Nigeria; Mallam Lamido Sanusi said this in his presentation at the just-concluded capital market committee retreat in Warri, Delta state.

Mallam Sanusi is of the view that government at all levels should cut down on their re-current expenditure and reduce overhead cost.

2013 Budget: Nweke Jnr describes demand for increased benchmark price as tragic

Frank Nweke Jnr, the Director General of the Nigeria Economic Summit Group (NESG) on Thursday said that his group does not support the House of Representatives’ demand to increase the benchmark price of crude oil in the 2013 budget from $75 to $82.

Mr Nweke, who was a guest on Channels Television’s breakfast programme, Sunrise Daily, said that the NESG also does not support the “perennial altercation between the legislature and the executive” arms of governments.

“This latest jack-up in the benchmark price for the 2013 budget is ill-advised. When I first got information about this yesterday, I described it as tragic,” he said.

2013 Budget: Gbajabiamila says issue of benchmark price is unconstitutional

The House of Representatives’ Minority leader, Femi Gbajabiamila on Thursday said the power to decide how the revenue earned by Nigeria is spent is the prerogative of the National Assembly not the executive arm of government.

The lawmaker, who was speaking on Channels Television’s programme, Sunrise Daily, against the fallout between the presidency and the legislature over the benchmark price of crude oil in the 2013 budget, said pegging the price of crude oil is a way through which the Federal Government short-changes the states.

“There is no issue of benchmark vis-à-vis the constitution. If we decide we want a benchmark so that we can save, that part of the constitution needs to be amended. There is no issue of benchmark as far as I am concern,” Mr Gbajabiamila.

The Minority leader said though the House of Representative is yet to receive the 2013 budget, it would improper to present a fresh budget when previous one is yet to be implemented.

“The position of the House is very simple. You don’t jump from one to the other without care of the one that comes before. Again, it is very tardy to present a budget when there is a 2012 Budget that is pending,” he said.

We’ve not started budgeting in Nigeria – Analyst

A budget expert, Emeka Ejikonye on Thursday said what Nigerians generally refers to a budgeting is mere fiscal policy making activities.

Mr Ejikonye, who was speaking on Channels Television’s programme, Sunrise Daily, against the fallout between the presidency and the legislature over the benchmark price of crude oil in the 2013 budget, said until the Nigerian government “start doing budgeting, Eldorado will continue to elude us.”

Don’t void CBN’s autonomy, IMF advices National Assembly

The Country Director of the International Monetary Fund (IMF), Scott Rogers on Thursday faulted the call by members of the National Assembly for the removal of the autonomy of the Central Bank.

The Country Director of the International Monetary Fund, Scott Rogers

Mr Scott, who spoke during the presentation of the IMF’s report on sub Saharan Africa in Abuja, said that the sustenance of financial system stable in the country will be truncated if the institution is not allowed to function independently.

“Without an independent Central Bank, you do not have an independent monetary policy,” he said.

Mr Scott said it was primarily because the CBN was able to tighten monetary policies that Nigeria’s reserves are raising again.

“It’s important that the Central Bank has the autonomy to hire the people they need, to remunerate them competitively, to be able to undertake the modernization they need to be able to manage payments and financial supervision effectively,” he said.

Mr Scott further said that the CBN should be able to perform its duties without fears of being penalised “because they took an unpleasant decision on interest rate policy or because they decided that they needed to close a bank.”

The IMF representative who suggested the tightening of fiscal policies to control the rise in inflation rate also said that all hands must be on deck to achieve structural reforms in the country.

According to him, the federal government’s petroleum subsidy and the millennium development goal of 2015 may not be achieved owing to the volatility of the oil market and lack of political will.

The immediate past Governor of the CBN, Chukwuma Soludo last weekend also warned against any move that could curtail the autonomy of the CBN as guaranteed by the CBN Act 2007.

According to him, such a move could jeopardize the effectiveness of monetary policy and management of the macro-economic framework in Nigeria.
“The survival of CBN as an institution is at the heart of the survival of the Nigerian economy,” he had declared.

A bill to amend the Act establishing the Central Bank of Nigeria recently passed the first the reading in the Senate while a similar move is on-going in the House of Representatives.

The CBN was embroiled in a controversy with the lawmakers, when it failed to present its budget to the national assembly.

The CBN Act allows it ruin as an independent body without the scrutiny of the national assembly.