The 2017-2019 Medium Term Expenditure Framework and Fiscal Strategy Paper sent to the National Assembly by President Muhammadu Buhari for legislative approval narrowly escaped being rejected again at the Senate on Wednesday.
The upper chamber of the National Assembly condemned the projections in the documents as unrealistic, even though it said the Presidency had set December 1 for the presentation of the 2017 Appropriation Bill to the legislature.
The senators, who took turns to criticise the new version of the MTEF/FSP as well as the officials who prepared the documents during the day’s plenary, submitted that it should be sent back to the Executive to include the “correct” figures showing the true state of the economy.
The MTEF/FSP, which will form the basis for the national annual budget for the next three years, had earlier been rejected by the Senate over the failure by the Executive to include some critical details in the document.
The Majority Leader, Senator Ali Ndume, had described the first version of the MTEF and FSP as “empty.”
Members of the Senate, however, agreed that rather than send the MTEF/FSP back to the Executive, the legislature was bound to tinker with the projections to make the proposal “realistic.”
Ndume explained in a written document that the MTEF/FSP articulated government’s revenue and spending plan as well as its fiscal policy objective over a period.
Represented by the Deputy Majority Leader, Senator Bala Ibn Na’Allah, Ndume noted that Section 11 of the Fiscal Responsibility Act, 2007 required the Minister of Finance to prepare the MTEF/FSP and lay it before the Federal Executive Council and the National Assembly for consideration.
He said, “The MTEF/FSP is proposing a budget that will be predicated on an oil revenue benchmark of $42.5 per barrel for the period of 2017-2019, while the government will continue with the diversification of the non-oil revenues, which are more predictable and less volatile to a position of performance.
“The non-oil revenue for 2017-2019 is guided by the improved efficiency of collection and expected growth in non-oil Gross Domestic Product and, accordingly, Customs collection, Companies Income Tax, Value Added Tax and FGN independent revenue are non-oil sectors the government is expecting revenue from in 2017.”
Ndume further said the proposal also showed that the government was projecting a 3.02 per cent GDP growth in 2017, while inflation was expected to moderate at 12.92 per cent.
The President of the Senate, Dr. Bukola Saraki, who presided over the plenary, however, backed the position of some lawmakers that since the Executive had failed to prepare the MTEF/FSP to meet the standard required, it was the responsibility of the legislature to enhance its quality.
He said, “There is no doubt about the fact that these projections are not realistic. There is no doubt that the exchange rate is not realistic. The Central Bank of Nigeria has said it is using N305 (to a dollar). There is no doubt as well that throughout this year, we did not achieve 2.2 million barrels per day; even in time of peace, we have not achieved 2.5mbpd. How realistic is 2.2mbpd next year? The oil price as well looks conservative.
“Like some of our distinguished colleagues said, our responsibility is to work on it and use our capacity to do the right thing. We have our committees on Appropriation and Finance that should not just take anything from the Executive, sign it and return it verbatim. If it means that we have to rehash it, look at it again, turn it around and do what is right, then, that it our responsibility.
“I think that it is just the way to go rather than to just take a document from the Executive and return the same to it. It is clear from what was submitted today that it will not work like that this time around.”
Saraki also asked the committees on Finance and Appropriation to take note of all that was said by the senators on the MTEF/FSP during the plenary, while preparing their report on the document, adding that the committees should also organise a debate on the performance of the 2016 budget, “before we even take the report of the committees on the MTEF; that must be a precondition.”
The Minority Leader, Senator Godswill Akpabio, while seconding the motion for the transfer of the MTEF/FSP to the committees, said the President had hinted of his plan to present the 2017 Appropriation Bill to the National Assembly on December 1.
He said, “We can see that we don’t have a perfect document in our hands but, of course, we are looking at assumptions and assumptions may not necessarily be correct. I want to suggest that we send it to the committees. Of course, the committees will invite the relevant agencies and ministries of government and they (the committees) will come up with a more realistic MTEF/FSP.
“Looking at the date that this was submitted to the Senate, October 4, and we are debating it today November 23; so, a lot of indices must have changed. And the timing also is critical.”
Senator Dino Melaye said, “Just this morning, the front page of The PUNCH carried boldly an assertion from the Central Bank of Nigeria that huge debts are responsible for recession and there is no other factual factor responsible for recession than our huge debts.
“I want to say this document that I have before me, this MTEF proposal and projections for 2017 to 2019, is a lie. This document is not truthful, it is not honest, it is not transparent and it is not factual.
Melaye stated, “In this great chamber, last year, we passed the 2016 to 2018 MTEF of three years. This chamber will want to know what happened to that MTEF and what happened to the 2017 aspect of the three-year MTEF we passed last year. Now, there is a new one for 2017. What are the variations between and comparative analysis of what we received in the MTEF of last year that is meant for three years and what we have now? This chamber needs to know.
“What are the new amendments? Is this MTEF predicated on the loan that the Executive is requesting to take? We want to know and that is not stipulated in this MTEF. The average of N290 exchange rate per dollar, is it realistic? Is this the truth?
“The Gross Domestic Product is going down and this MTEF document is telling me that it is going up. So, how do you corroborate this fraud? We should not be talking about a deficit GDP growth. In realistic term, we should be talking about deficit to revenue.
“How much of our revenue is being used in servicing our debts? You need to tell us; we need to know what percentage of our revenue are you allocating to servicing debts. But that question is very painful to me because recently at an international forum, the Minister of Budget and National Planning was blatantly displaying ignorance of not knowing even what the debt profile of the government is.”
Senator Abiodun Olujimi, said, “This document is not what we expected. It shows the incompetence of those who prepared the document.
“We are talking of an MTEF/FSP that has failed to review the budgetary performance of 2016; how then can we make the right projections for 2017?”
Olujimi asked why the inflation rate was put at 12.92 in the document sent to the Senate when the rate had risen to 18.2 per cent, adding, “I am not a professional in any way, not even in economics, but I can see clearly that there is nothing in this MTEF. It is voodoo oriented.”
In his submission, Senator Olamilekan Adeola, who asked that the document be rejected, said, “The economic team of Mr. President is in a disarray.”