The Senate has opposed attempts by its committee on Finance to cut down the proposed N3.6trllion for subsidy in the 2023 budget, by the executive, to N1.7trillion.
The Senate Committee on Finance chaired by Senator Olamilekan Adeola (APC Lagos West), in its report on the proposals presented for consideration by the upper chamber, recommended N1.7trillion for fuel subsidy for the entire 2023 which was however rejected, with the Lawmakers insisting on the earlier proposed N3.6trillion earmarked for subsidy.
The committee recommended a $73 per barrel oil price benchmark for the proposed N19.76 2023 budget which was approved against $70 per barrel proposed by the executive in the MTEF/FSP documents.
President Muhammadu Buhari had in the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), proposed N3.6trillion for fuel subsidy from January to June in 2023.
Besides, recommendations on the existence of 10 out of the 63 Government Owned Enterprises (GOEs), made by the committee, was also approved by the Senate.
The GOEs concerned are the Nigerian Communication Commission (NCC), Corporate Affairs Commission (CAC), Nigeria Port Authority (NPA), Joint Admission and Matriculation Board (JAMB) and Nigerian Maritime Administration and Safety Agency (NIMASA).
Others are the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC) , Nigeria Upstream Petroleum Regulatory Commission (NUPRC) and Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMPDRA).
According to the recommendations, “That 10 out of the 63 GOEs be placed on cost of collections to serve as a test case for other GOEs which can be added in the future. The list of these GOEs includes, NCC, CAC, NPA, NIMASA, NUPRC, FIRS, CUSTOMS, NMPDRA, JAMB and NAFDAC with immediate effect through the proposed Finance Bill 2023 coming up with amendment on the existing Act of agencies’’.
The chairman of the Senate Committee on Finance explained that scenario 2 of the 2023 budget proposed by the executive in the MTEF / FSP document, was adopted by the committee because of lesser vote for budget deficit and over N1trillion for capital votes for the various Ministries, Departments and Agencies (MDAs).
The scenario two has a proposed total expenditure profile of N19.76 trillion and deficit of N11.30 trillion as against scenario one which has a proposed total expenditure profile of N18.75 trillion with deficit of N12.41 trillion and zero allocation for capital projects for the MDAs.
The scenario two proposed recommended by the committee for approval by the Senate and accordingly approved is based on other critical parameters like 1.69million barrel oil production per day, N437.57k exchange rate to a US dollar and 3.75% Gross Domestic Product (GDP) growth rate.
Others are projected inflation rates of 17.16% and new borrowings of N8.437 trillion, N6.31trillion for Debt Service, N722.11billion as statutory transfers etc.
Before the report adoption, many of the Senators expressed their reservations on the N437 exchange rate to a dollar which according to them gives over N300 difference to the N 730 or N740 to a dollar it is at the parallel market.
In his response, Senator Adeola said the committee attempted to increase the exchange rate from N437 to N550 to a US dollar but threaded caution, in avoiding further devaluation of the Naira.
The President of the Senate, Ahmad Lawan in his remarks, said based on observations and findings made by the Committee, Nigeria is in a war situation as far as crude oil theft is concerned and also under revenue remittances by many of the MDAs. The scenarios proposed are very challenging ones and all hands must be on deck to stem the tide “, he said.