Ikengawo
April 24th, 2010, 06:30 AM
Nigeria 2010 Budget Breakdown
By NairaBrain on Nov 25, 2009 with Comments 2 - 5,969 views
INFRASTRUCTURE development topped the Federal Government’s agenda in THE Capital Expenditure of the N4.07 trillion budgetary proposal for 2010 laid separately before the Senate and the House of Representatives yesterday.
It was the first time since the commencement of the Fourth Republic that the sitting President did not perform the formality of personally laying the government’s financial plan before the National Assembly. It was also the first time that the two chambers separately received the budgetary proposals.
Special Adviser to the President on National Assembly Matters, Senator Mohammed Abba Aji performed the brief ritual in the two houses. He was welcomed into the Senate chambers at 11.28 a.m. after the Senate invoked order 17 of its standing rules to allow him and the Special Assistant to the President (Senate) Dr. Cairo Ojougboh into the Senate chambers.
Five minutes later, Abba Aji laid the budget estimates on the Senate table and bowed twice before taking his leave. He immediately proceeded to the chamber of the House of Representatives where he performed the same ritual, followed this time by Alhaji Ibrahim Zailani, the Special Assistant to the President (House of Representatives.)
The proposed spending is 32 per cent higher than that of 2009 and, if approved, will push Nigeria even further beyond a 3 per cent deficit target set under a 2007 fiscal responsibility act.
Around a third of the planned budget is non-recurrent spending targeting areas including critical infrastructure, the power sector and development in the Niger Delta, the restive heartland of the country’s mainstay oil industry.
“The purpose of the 2010 budget is to accelerate economic recovery through targeted fiscal interventions intended to further stimulate the economy and support private sector growth,” Yar’Adua said in a budget statement presented to the lawmakers.
The statement said N1.37 trillion was budgeted for capital expenditure and N2.011 trillion for recurrent, non-debt expenditure. The spending plans for the country, which vies with Angola as Africa’s biggest oil producer, assume oil output of 2.088 million barrels per day (bpd), a benchmark oil price of $57 and an exchange rate of N150 to the U.S. dollar.
Yar’Adua said improving power infrastructure was a top priority and that Nigeria aimed to double electricity capacity to 10,000 megawatts (Mw) by the end of 2011. Intermittent power supply is seen as a major blow on economic growth.
Yar’Adua said the utilisation of budgetary allocations for 2009 had been “below expectations”, raising questions about how effectively government would spend the additional funds.
Out of the N4.07 trillion budgetary proposed expenditure for 2010, N1.37 trillion is earmarked for capital expenditure, N2.011 trillion is proposed as recurrent expenditure, N517.071 billion is proposed for debt servicing and N180 billion is allotted for statutory transfers. Among the beneficiaries of the statutory (first line charge) are the Niger Delta Development Commission (NDDC) N35.6 billion, the National Judicial Council, N91 billion and Universal Basic Education, N44.3 billion.
Another N9.3 billion is earmarked as the NDDC’s share of excess crude distributed in 2009.
The National Assembly has an allocation of N127.7 billion in the budgetary proposal for the 2010 financial year.
Sectoral allocation
Details of the budgetary estimate further show that the highest sectoral allocation was given to the Ministry of Works with N249.4 billion followed by Education with N249.08 billion; Defence N231.99 billion; Police Formation N216.4 billion; Health N161.84; Federal Capital Territory Administration N158.00 billion; Power N156.8 billion
The Ministry of Niger Delta Affairs has an allocation of N64.3 billion while the benchmark for oil revenue is fixed at $57 per barrel and the exchange rate for the dollar is N150 to the dollar.The Senate is expected to commence debate on the budget today.
Many Senators including Senator Ahmed Makarfi, chairman of the Senate committee on Finance were yet to study the budgetary proposals as at press time.
However, Senator Manzo Anthony (PDP, Taraba North) welcomed the budget as an ambitious effort to fast track infrastructure development.
“It is an ambitious budget with significant capital projects. It would appear that even greater emphasis is being placed by the President on infrastructural projects. The deficit is a concern but it is an issue that can be managed,’’ he said.
Michael Hugman, emerging markets strategist at Standard Bank in London, said the expansionary budget would have some positive effects in the immediate term but noted there was an inflationary risk, particularly if the government goes ahead with plans to abolish fuel subsidies.
“In the short-term, the expansionary element, will be positive for growth, equities and also, somewhat perversely, bonds, which we believe are being driven by a combination of flight to quality by banks and pension funds together with repeated liquidity injections into the market,” he said.
“However, when combined with inflationary risks from fuel price deregulation and possibly poor food production over the next few months, there is a danger inflation can head back towards 15 per cent year-on-year by mid-2010.” The 2010 spending plans target economic growth of 6.1 per cent and headline inflation of 11.2 per cent.
“Although the deficit will likely exceed targets established under fiscal responsibility guidelines – this is no surprise given that priority areas are infrastructure and the Niger Delta,” said London-based Knight Libertas analyst Richard Segal.
“The accountability of spending in these two areas will be crucial to sustain the confidence of local investors,” he said.
Senate passes N253bn 2009 Supplementary Appropriation
Meantime, the Senate yesterday passed N253 billion supplementary budget for 2009.
The new sum was jacked up by N1.25 billion by the Senate from the N252 billion sent by the President Yar’Adua to the National Assembly.
Chairman, Senate Committee on Information and Media, Senator Ayogu Eze in response to questions from newsmen on the frequency of medical trips of President Yar’Adua dismissed the need to investigate the health status of the President.
Senator Eze said the constitution only empowers a health board of enquiry to ascertain the health status of the President following which the Senate can then act.
The highlight of the supplementary budget which was passed yesterday shows that of the total sum of N353,600 billion, N100,050 billion is for recurrent expenditure, while the sum of N253,550 billion is for contribution to the Development Fund for additional Capital Expenditure for the year ending on the 31st of March, 2010.
Senate President, Chief David Mark before passage of the supplementary appropriation charged the executive to ensure full implementation of the budget, stressing that the extension of the implementation period of the 2010 budget to 31st March, 2010, has given the executive ample time for full implementation.
He said, “Having extended the implementation period to 31st of March, 2010, I hope that that gives the executive time to implement the budget.”
SECTORAL ALLOCATION
* Works N249.4bn
* Education N249.08bn
* Defence N231.99bn
* Police Formation N216.4bn
* Health N161.84bn
* FCTA N158.00bn
* Power N156.8bn
* N-Delta Ministry N64.3bn
Parameters
* Benchmark Price: US$57/barrel
* Forecast production: 2.088mbpd
* Exchange Rate: N150/US$
* Inflation Rate: 11.2%
* Real GDP Growth: 6.1%
EXPENDITURE BREAKDOWN
* Capital Expenditure N1.37trn
* Recurrent Expenditure N2.011trn
* Statutory Transfers N180.28bn
* Debt Service N517.07bn
^older article if you can't tell my Yar'adua still being alive or whatever
this next one is after it passed so changes had been made.
Jonathan signs N4.6 trillion budget
Govt denies plan to borrow $350m
From Madu Onuorah and Terhemba Daka, Abuja
ACTING President, Dr. Goodluck Jonathan. yesterday signed the 2010 Appropriation Act into law, pledging that it will accelerate the nation's economic recovery through targeted fiscal interventions.
The N4.6 trillion budget is predicted on an oil production capacity of 2.35 million barrels per day, an oil price benchmark of $67 per barrel and an average exchange rate of N150 to the United States (U.S.) dollar.
In November 2009, the National Assembly was presented with a budget proposal of N4.4 trillion, which it reviewed and jerked up to N4.6 trillion. The Bill which contains a deficit of N1.52 trillion or 4.66 per cent of the Gross Domestic Product (GDP).
The 2010 budget as signed by the Acting President pays special attention to the development of critical infrastructure in the areas of power, efficient transport system, provision of opportunities for food security and wealth creation, enhanced education and healthcare services, physical security and access to justice, sustainable economic and political empowerment, security and development in the Niger Delta and across the nation.
The signing ceremony, conducted at the Council Chambers of the Presidential Villa, Abuja, was witnessed by the President of the Senate, David Mark, the Acting Speaker of the House of Representatives, Usman Bayero Nafada, Deputy Senate President, Ike Ekweremadu, other members of the leadership of the National Assembly and members of the Federal Executive Council (FEC).
Jonathan noted that with the signing of the appropriation bill, it was now left to the ministries, departments and agencies (MDAs) of government to rapidly utilize the provisions of the budget to accelerate initiatives to enhance the pace of national development.
According to the the Acting President, the reconstituted FEC understands the importance of delivering on the present administration's promises to Nigerians, directing all the ministers in the cabinet to ensure proper and efficient administration of their sectoral budgets.
Jonathan said increased emphasis would be placed on monitoring the deliverables of MDAs by tracking the output of the financial and other resources appropriated under their stewardship.
Towards this, "the office of the Hon. Minister for Special Duties will be structured and empowered to undertake the task of monitoring and evaluation of all government projects and activities. This administration will quickly move to identify and resolve impediments to implementation, rewarding excellence in performance and applying sanctions where otherwise."
While thanking both Chambers of the National Assembly for their invaluable contribution to the budgeting processes, Jonathan, however, noted that the Executive pointed out certain aspects of the appropriated expenditure which the leadership of the Legislature has agreed would be resolved.
According to the Acting President, "in November 2009, this administration presented a budget proposal to the National Assembly for their consideration and passage into law. This proposal as subsequently amended was for an aggregate expenditure of N4.4 trillion, with a deficit of N1.32 trillion, or 4.05 per cent of GDP. After due consideration of the budget proposal, the legislature passed an Appropriation Bill of N4.6 trillion, with a deficit of N1.52 trillion or 4.66 per cent of GDP. However, we in the Executive have pointed out certain aspects of the appropriated expenditure, which the leadership of the legislature have agreed will be resolved. The 2010 Budget is based on certain assumptions reflecting our outlook for the fiscal year, including: Oil production of 2.35mb/d; benchmark oil price of $67/barrel; average exchange rate of N150 to the U.S. dollar."
In meeting the aspirations of Nigerians, Jonathan noted that "increased emphasis will be placed on monitoring the deliverables by MDAs by tracking the outcomes and outputs they achieve with the financial and other resources appropriated in the budget, over which they have stewardship. In this regard, the office of the Hon. Minister for Special Duties will be structured and empowered to undertake the task of monitoring and evaluation of all government projects and activities. This administration will quickly move to
identify and resolve impediments to implementation rewarding excellence in performance and applying sanctions where otherwise."
Meanwhile, the All Nigeria Peoples Party (ANPP) caucus in the House of Representatives yesterday faulted the Federal Government's plan to secure a $915 million loan facility from the World Bank, arguing that the development was not necessary.
This came after the House of Representative on Wednesday gave assent to the letter from Jonathan requesting the approval of a foreign loan totalling $915 million. Explaining the rational for the loan, Jonathan stated that the country was in dire need of the facility to enable it to fund the huge infrastructural deficit critical to rapid development.
"The World Bank portfolio of the facilities totalling $915 million out of which $179 million would be drawn in the 2010 fiscal year is of particular essence as it would be deployed to urban water and transport, human capacity development and power infrastructure across the country", he said.
But addressing a press conference on the matter yesterday, spokesman of the group and Minority Leader in the House, Mohamed Ali Ndume wondered why the Acting President was in a hurry to obtain a loan facility when the country could not justify the usage of its excess crude.
"If the country is currently producing crude oil at about 1.02 mb/d, and the market price today is about $80 against the $50 benchmark in the 2010 budget, there is no justification for borrowing", he said.
"If you take 1.02 million barrels of crude oil in a day and you multiply it by $80 you are going to get conservatively more than $800 million."
"So, if a country like Nigeria can earn conservatively $500 million in a day, why would you go and mortgage the future of your children and grand children?
"We know what we went through when the country was owing the Paris Club. Nigeria had to make serious sacrifice during the Obasanjo administration in order for us to get out of the lenders' grips.
"Why would Jonathan allow, just because of the interest of a few individuals that are agents of the so-called World Bank, mortgage the future of our poor people for their selfish interest? I cannot see any reason why our country that just came out from a borrowing situation would go back to borrowing no matter how attractive it is," he said.
Ndume, who earlier protested, but could not stop the approval through a resolution of the House during the debate on the floor, expressed regrets that details of the 2010 borrowing plan were just made available in a 235-page booklet to members mid-way into the sitting. He said the resolution was hastily passed by his colleagues without studying and understanding the implications.
"As a leader, I just received a copy of this bulky document on the floor and they expected members to just rubber-stamp and approve it. If the country is earning about $500 million daily, why should they borrow money?", he asked.
He further noted that no mention was made on the proposed loan at their Tuesday's meeting between the leadership of the National Assembly and the Acting President where the grey areas and other issues of discrepancy in the 2010 Appropriation Bill were trashed.
He also explained that he had personally told the Acting President that his party (ANPP) would go to any length in protest against the plan to increase the Value Added Tax (VAT) from five to 10 per cent, just as he equally vowed to personally mobilize the organised Labour in protest, if government increased the VAT.
Speaking further, Ndume accused the Peoples Democratic Party (PDP) administration of trying to favour some individual's interest, who, according to him, are friends of the World Bank, and that if allowed to be properly scrutinized, there may be harsh conditions attached to the loan, such that the funds could not be flexibly applied.
Earlier on the floor yesterday, Deputy Leader of the House, Baba Shehu Agaie had moved the motion for the approval of the loan, urging the House to pass the resolution as the 2010 borrowing plan was part of the 2010 budget of the federation.
The Chairman of the House Committee on Finance, John Enoh and the Chairman, Rules and Business Committee, Ita Enang expressed support for the approval, arguing that the loan was meant to finance critical areas of the budget.
But Ndume and the Deputy Minority Leader, Suleiman Abdurrahman Kawu, opposed the motion, arguing that the House had earlier kicked against such external borrowing.
The House had recently, sequel to a motion sponsored by John Halims Agoda urged the executive arm to stop a planned move to obtain $300 million foreign loan, pointing out that the country was just settling down after being offered debt relief by the Paris Club of Creditors.
But the Minister of Finance, Mr. Olusegun Aganga, yesterday said that reports that the Federal Government would borrow about $950 million to finance the budget is "absolutely wrong."
Aganga told journalists after witnessing the signing of the 2010 budget by Jonathan that the government would not borrow $billion to fund the budget.
Instead, he said that the deficit in the budget would be financed through other sources of revenue, which include sale of some assets and the raising of about $500 million bond at the international market.
According to the minister: "This is absolutely wrong. We are not borrowing a $billion to fund the budget, I think what they are referring to is something which we are working with the World Bank. And the World Bank as you know help a number of developing countries. And that is just a quantification of the work they are doing which is broken down to quite a few segments, maybe eight or nine of them. So, it is not one billion dollars borrowing upfront, it doesn't work like that. It has nothing to do with the budget."
Aganga further explained that the government had made it clear on how it intended to finance the budget deficit of about N1.52 trillion.
He said: "There are other sources of revenue in which we are looking at. There was some mention of sales of some assets and it has been mentioned that we are going to raise a bond this year. We are going to the international capital market this year of about $500 million. But I think the most important thing we should understand is that in a recession, there is nothing wrong about spending, in fact if you look at any of the Western world, they all have deficit. The deficit is growing at an alarming rate. So, the most important thing for us is to make sure that in spending, we get good value for the money spent, that it is spent in areas where we generate both social and economic returns, that is what is critical and that is why we should all be pleased that the Acting President made it very clear today that this administration is going to be heavily focused on the execution of the budget, is going to be heavily focused on how money is been spent and the minister in charge of special duties has being mandated to handle that, so you will see changes in that direction."
On the Joint Venture Cash Calls account (JVC) on the 2010 budget, the minister said: "It will not in any way affect the budget. We are looking into it already."
Aganga also spoke on the just signed 2010 budget, saying: "It is something that is going to help the growth of the economy and it is something that we have been waiting for and it is something that has been done. My focus now will be on three major things: One is about the management of our revenue, which will make sure that there are no linkages, making sure that we risk manage whatever we need to risk manage. Secondly, we are looking at what will be enhancing the quality of spending. It is okay to spend but it is important that you spend wisely and people are held accountable."
By NairaBrain on Nov 25, 2009 with Comments 2 - 5,969 views
INFRASTRUCTURE development topped the Federal Government’s agenda in THE Capital Expenditure of the N4.07 trillion budgetary proposal for 2010 laid separately before the Senate and the House of Representatives yesterday.
It was the first time since the commencement of the Fourth Republic that the sitting President did not perform the formality of personally laying the government’s financial plan before the National Assembly. It was also the first time that the two chambers separately received the budgetary proposals.
Special Adviser to the President on National Assembly Matters, Senator Mohammed Abba Aji performed the brief ritual in the two houses. He was welcomed into the Senate chambers at 11.28 a.m. after the Senate invoked order 17 of its standing rules to allow him and the Special Assistant to the President (Senate) Dr. Cairo Ojougboh into the Senate chambers.
Five minutes later, Abba Aji laid the budget estimates on the Senate table and bowed twice before taking his leave. He immediately proceeded to the chamber of the House of Representatives where he performed the same ritual, followed this time by Alhaji Ibrahim Zailani, the Special Assistant to the President (House of Representatives.)
The proposed spending is 32 per cent higher than that of 2009 and, if approved, will push Nigeria even further beyond a 3 per cent deficit target set under a 2007 fiscal responsibility act.
Around a third of the planned budget is non-recurrent spending targeting areas including critical infrastructure, the power sector and development in the Niger Delta, the restive heartland of the country’s mainstay oil industry.
“The purpose of the 2010 budget is to accelerate economic recovery through targeted fiscal interventions intended to further stimulate the economy and support private sector growth,” Yar’Adua said in a budget statement presented to the lawmakers.
The statement said N1.37 trillion was budgeted for capital expenditure and N2.011 trillion for recurrent, non-debt expenditure. The spending plans for the country, which vies with Angola as Africa’s biggest oil producer, assume oil output of 2.088 million barrels per day (bpd), a benchmark oil price of $57 and an exchange rate of N150 to the U.S. dollar.
Yar’Adua said improving power infrastructure was a top priority and that Nigeria aimed to double electricity capacity to 10,000 megawatts (Mw) by the end of 2011. Intermittent power supply is seen as a major blow on economic growth.
Yar’Adua said the utilisation of budgetary allocations for 2009 had been “below expectations”, raising questions about how effectively government would spend the additional funds.
Out of the N4.07 trillion budgetary proposed expenditure for 2010, N1.37 trillion is earmarked for capital expenditure, N2.011 trillion is proposed as recurrent expenditure, N517.071 billion is proposed for debt servicing and N180 billion is allotted for statutory transfers. Among the beneficiaries of the statutory (first line charge) are the Niger Delta Development Commission (NDDC) N35.6 billion, the National Judicial Council, N91 billion and Universal Basic Education, N44.3 billion.
Another N9.3 billion is earmarked as the NDDC’s share of excess crude distributed in 2009.
The National Assembly has an allocation of N127.7 billion in the budgetary proposal for the 2010 financial year.
Sectoral allocation
Details of the budgetary estimate further show that the highest sectoral allocation was given to the Ministry of Works with N249.4 billion followed by Education with N249.08 billion; Defence N231.99 billion; Police Formation N216.4 billion; Health N161.84; Federal Capital Territory Administration N158.00 billion; Power N156.8 billion
The Ministry of Niger Delta Affairs has an allocation of N64.3 billion while the benchmark for oil revenue is fixed at $57 per barrel and the exchange rate for the dollar is N150 to the dollar.The Senate is expected to commence debate on the budget today.
Many Senators including Senator Ahmed Makarfi, chairman of the Senate committee on Finance were yet to study the budgetary proposals as at press time.
However, Senator Manzo Anthony (PDP, Taraba North) welcomed the budget as an ambitious effort to fast track infrastructure development.
“It is an ambitious budget with significant capital projects. It would appear that even greater emphasis is being placed by the President on infrastructural projects. The deficit is a concern but it is an issue that can be managed,’’ he said.
Michael Hugman, emerging markets strategist at Standard Bank in London, said the expansionary budget would have some positive effects in the immediate term but noted there was an inflationary risk, particularly if the government goes ahead with plans to abolish fuel subsidies.
“In the short-term, the expansionary element, will be positive for growth, equities and also, somewhat perversely, bonds, which we believe are being driven by a combination of flight to quality by banks and pension funds together with repeated liquidity injections into the market,” he said.
“However, when combined with inflationary risks from fuel price deregulation and possibly poor food production over the next few months, there is a danger inflation can head back towards 15 per cent year-on-year by mid-2010.” The 2010 spending plans target economic growth of 6.1 per cent and headline inflation of 11.2 per cent.
“Although the deficit will likely exceed targets established under fiscal responsibility guidelines – this is no surprise given that priority areas are infrastructure and the Niger Delta,” said London-based Knight Libertas analyst Richard Segal.
“The accountability of spending in these two areas will be crucial to sustain the confidence of local investors,” he said.
Senate passes N253bn 2009 Supplementary Appropriation
Meantime, the Senate yesterday passed N253 billion supplementary budget for 2009.
The new sum was jacked up by N1.25 billion by the Senate from the N252 billion sent by the President Yar’Adua to the National Assembly.
Chairman, Senate Committee on Information and Media, Senator Ayogu Eze in response to questions from newsmen on the frequency of medical trips of President Yar’Adua dismissed the need to investigate the health status of the President.
Senator Eze said the constitution only empowers a health board of enquiry to ascertain the health status of the President following which the Senate can then act.
The highlight of the supplementary budget which was passed yesterday shows that of the total sum of N353,600 billion, N100,050 billion is for recurrent expenditure, while the sum of N253,550 billion is for contribution to the Development Fund for additional Capital Expenditure for the year ending on the 31st of March, 2010.
Senate President, Chief David Mark before passage of the supplementary appropriation charged the executive to ensure full implementation of the budget, stressing that the extension of the implementation period of the 2010 budget to 31st March, 2010, has given the executive ample time for full implementation.
He said, “Having extended the implementation period to 31st of March, 2010, I hope that that gives the executive time to implement the budget.”
SECTORAL ALLOCATION
* Works N249.4bn
* Education N249.08bn
* Defence N231.99bn
* Police Formation N216.4bn
* Health N161.84bn
* FCTA N158.00bn
* Power N156.8bn
* N-Delta Ministry N64.3bn
Parameters
* Benchmark Price: US$57/barrel
* Forecast production: 2.088mbpd
* Exchange Rate: N150/US$
* Inflation Rate: 11.2%
* Real GDP Growth: 6.1%
EXPENDITURE BREAKDOWN
* Capital Expenditure N1.37trn
* Recurrent Expenditure N2.011trn
* Statutory Transfers N180.28bn
* Debt Service N517.07bn
^older article if you can't tell my Yar'adua still being alive or whatever
this next one is after it passed so changes had been made.
Jonathan signs N4.6 trillion budget
Govt denies plan to borrow $350m
From Madu Onuorah and Terhemba Daka, Abuja
ACTING President, Dr. Goodluck Jonathan. yesterday signed the 2010 Appropriation Act into law, pledging that it will accelerate the nation's economic recovery through targeted fiscal interventions.
The N4.6 trillion budget is predicted on an oil production capacity of 2.35 million barrels per day, an oil price benchmark of $67 per barrel and an average exchange rate of N150 to the United States (U.S.) dollar.
In November 2009, the National Assembly was presented with a budget proposal of N4.4 trillion, which it reviewed and jerked up to N4.6 trillion. The Bill which contains a deficit of N1.52 trillion or 4.66 per cent of the Gross Domestic Product (GDP).
The 2010 budget as signed by the Acting President pays special attention to the development of critical infrastructure in the areas of power, efficient transport system, provision of opportunities for food security and wealth creation, enhanced education and healthcare services, physical security and access to justice, sustainable economic and political empowerment, security and development in the Niger Delta and across the nation.
The signing ceremony, conducted at the Council Chambers of the Presidential Villa, Abuja, was witnessed by the President of the Senate, David Mark, the Acting Speaker of the House of Representatives, Usman Bayero Nafada, Deputy Senate President, Ike Ekweremadu, other members of the leadership of the National Assembly and members of the Federal Executive Council (FEC).
Jonathan noted that with the signing of the appropriation bill, it was now left to the ministries, departments and agencies (MDAs) of government to rapidly utilize the provisions of the budget to accelerate initiatives to enhance the pace of national development.
According to the the Acting President, the reconstituted FEC understands the importance of delivering on the present administration's promises to Nigerians, directing all the ministers in the cabinet to ensure proper and efficient administration of their sectoral budgets.
Jonathan said increased emphasis would be placed on monitoring the deliverables of MDAs by tracking the output of the financial and other resources appropriated under their stewardship.
Towards this, "the office of the Hon. Minister for Special Duties will be structured and empowered to undertake the task of monitoring and evaluation of all government projects and activities. This administration will quickly move to identify and resolve impediments to implementation, rewarding excellence in performance and applying sanctions where otherwise."
While thanking both Chambers of the National Assembly for their invaluable contribution to the budgeting processes, Jonathan, however, noted that the Executive pointed out certain aspects of the appropriated expenditure which the leadership of the Legislature has agreed would be resolved.
According to the Acting President, "in November 2009, this administration presented a budget proposal to the National Assembly for their consideration and passage into law. This proposal as subsequently amended was for an aggregate expenditure of N4.4 trillion, with a deficit of N1.32 trillion, or 4.05 per cent of GDP. After due consideration of the budget proposal, the legislature passed an Appropriation Bill of N4.6 trillion, with a deficit of N1.52 trillion or 4.66 per cent of GDP. However, we in the Executive have pointed out certain aspects of the appropriated expenditure, which the leadership of the legislature have agreed will be resolved. The 2010 Budget is based on certain assumptions reflecting our outlook for the fiscal year, including: Oil production of 2.35mb/d; benchmark oil price of $67/barrel; average exchange rate of N150 to the U.S. dollar."
In meeting the aspirations of Nigerians, Jonathan noted that "increased emphasis will be placed on monitoring the deliverables by MDAs by tracking the outcomes and outputs they achieve with the financial and other resources appropriated in the budget, over which they have stewardship. In this regard, the office of the Hon. Minister for Special Duties will be structured and empowered to undertake the task of monitoring and evaluation of all government projects and activities. This administration will quickly move to
identify and resolve impediments to implementation rewarding excellence in performance and applying sanctions where otherwise."
Meanwhile, the All Nigeria Peoples Party (ANPP) caucus in the House of Representatives yesterday faulted the Federal Government's plan to secure a $915 million loan facility from the World Bank, arguing that the development was not necessary.
This came after the House of Representative on Wednesday gave assent to the letter from Jonathan requesting the approval of a foreign loan totalling $915 million. Explaining the rational for the loan, Jonathan stated that the country was in dire need of the facility to enable it to fund the huge infrastructural deficit critical to rapid development.
"The World Bank portfolio of the facilities totalling $915 million out of which $179 million would be drawn in the 2010 fiscal year is of particular essence as it would be deployed to urban water and transport, human capacity development and power infrastructure across the country", he said.
But addressing a press conference on the matter yesterday, spokesman of the group and Minority Leader in the House, Mohamed Ali Ndume wondered why the Acting President was in a hurry to obtain a loan facility when the country could not justify the usage of its excess crude.
"If the country is currently producing crude oil at about 1.02 mb/d, and the market price today is about $80 against the $50 benchmark in the 2010 budget, there is no justification for borrowing", he said.
"If you take 1.02 million barrels of crude oil in a day and you multiply it by $80 you are going to get conservatively more than $800 million."
"So, if a country like Nigeria can earn conservatively $500 million in a day, why would you go and mortgage the future of your children and grand children?
"We know what we went through when the country was owing the Paris Club. Nigeria had to make serious sacrifice during the Obasanjo administration in order for us to get out of the lenders' grips.
"Why would Jonathan allow, just because of the interest of a few individuals that are agents of the so-called World Bank, mortgage the future of our poor people for their selfish interest? I cannot see any reason why our country that just came out from a borrowing situation would go back to borrowing no matter how attractive it is," he said.
Ndume, who earlier protested, but could not stop the approval through a resolution of the House during the debate on the floor, expressed regrets that details of the 2010 borrowing plan were just made available in a 235-page booklet to members mid-way into the sitting. He said the resolution was hastily passed by his colleagues without studying and understanding the implications.
"As a leader, I just received a copy of this bulky document on the floor and they expected members to just rubber-stamp and approve it. If the country is earning about $500 million daily, why should they borrow money?", he asked.
He further noted that no mention was made on the proposed loan at their Tuesday's meeting between the leadership of the National Assembly and the Acting President where the grey areas and other issues of discrepancy in the 2010 Appropriation Bill were trashed.
He also explained that he had personally told the Acting President that his party (ANPP) would go to any length in protest against the plan to increase the Value Added Tax (VAT) from five to 10 per cent, just as he equally vowed to personally mobilize the organised Labour in protest, if government increased the VAT.
Speaking further, Ndume accused the Peoples Democratic Party (PDP) administration of trying to favour some individual's interest, who, according to him, are friends of the World Bank, and that if allowed to be properly scrutinized, there may be harsh conditions attached to the loan, such that the funds could not be flexibly applied.
Earlier on the floor yesterday, Deputy Leader of the House, Baba Shehu Agaie had moved the motion for the approval of the loan, urging the House to pass the resolution as the 2010 borrowing plan was part of the 2010 budget of the federation.
The Chairman of the House Committee on Finance, John Enoh and the Chairman, Rules and Business Committee, Ita Enang expressed support for the approval, arguing that the loan was meant to finance critical areas of the budget.
But Ndume and the Deputy Minority Leader, Suleiman Abdurrahman Kawu, opposed the motion, arguing that the House had earlier kicked against such external borrowing.
The House had recently, sequel to a motion sponsored by John Halims Agoda urged the executive arm to stop a planned move to obtain $300 million foreign loan, pointing out that the country was just settling down after being offered debt relief by the Paris Club of Creditors.
But the Minister of Finance, Mr. Olusegun Aganga, yesterday said that reports that the Federal Government would borrow about $950 million to finance the budget is "absolutely wrong."
Aganga told journalists after witnessing the signing of the 2010 budget by Jonathan that the government would not borrow $billion to fund the budget.
Instead, he said that the deficit in the budget would be financed through other sources of revenue, which include sale of some assets and the raising of about $500 million bond at the international market.
According to the minister: "This is absolutely wrong. We are not borrowing a $billion to fund the budget, I think what they are referring to is something which we are working with the World Bank. And the World Bank as you know help a number of developing countries. And that is just a quantification of the work they are doing which is broken down to quite a few segments, maybe eight or nine of them. So, it is not one billion dollars borrowing upfront, it doesn't work like that. It has nothing to do with the budget."
Aganga further explained that the government had made it clear on how it intended to finance the budget deficit of about N1.52 trillion.
He said: "There are other sources of revenue in which we are looking at. There was some mention of sales of some assets and it has been mentioned that we are going to raise a bond this year. We are going to the international capital market this year of about $500 million. But I think the most important thing we should understand is that in a recession, there is nothing wrong about spending, in fact if you look at any of the Western world, they all have deficit. The deficit is growing at an alarming rate. So, the most important thing for us is to make sure that in spending, we get good value for the money spent, that it is spent in areas where we generate both social and economic returns, that is what is critical and that is why we should all be pleased that the Acting President made it very clear today that this administration is going to be heavily focused on the execution of the budget, is going to be heavily focused on how money is been spent and the minister in charge of special duties has being mandated to handle that, so you will see changes in that direction."
On the Joint Venture Cash Calls account (JVC) on the 2010 budget, the minister said: "It will not in any way affect the budget. We are looking into it already."
Aganga also spoke on the just signed 2010 budget, saying: "It is something that is going to help the growth of the economy and it is something that we have been waiting for and it is something that has been done. My focus now will be on three major things: One is about the management of our revenue, which will make sure that there are no linkages, making sure that we risk manage whatever we need to risk manage. Secondly, we are looking at what will be enhancing the quality of spending. It is okay to spend but it is important that you spend wisely and people are held accountable."