- As SEC, shareholders row over shares manipulations
The Senate and the House of Representatives on Wednesday passed the 2016 budget of N6.060tn at separate sessions held in their respective chambers.
This showed a reduction of about N17bn from the adjusted figure of N6.077tn, which President Muhammadu Buhari presented to the National Assembly.
The 2016 Appropriation Bill passed third reading in both chambers after both houses considered and approved the report on the budget submitted by the Joint Committee on Appropriation.
The Senate President, Bukola Saraki, presided over the session in the Senate, while the Speaker, House of Representatives, Mr. Yakubu Dogara, took care of proceedings at the House.
Despite the instability in the price of crude oil, the National Assembly retained $38 as the benchmark oil price for the budget, with oil going for around $41 per barrel currently.
Crude oil production for the nation was pegged at 2.2 million barrels per day and the exchange rate of N197 to $1 was kept as originally proposed by the President.
Both chambers approved N1.587tn as the capital expenditure portion of the budget as well as recurrent expenditure of N2.646.3tn.
They also approved N351.37bn for statutory transfers, N1.475.3tn for debt servicing, and N2.2tn for fiscal deficit.
At the Red Chamber, the Chairman, Senate Committee on Appropriation, Senator Danjuma Goje, said the N17bn reduction came from the errors and omissions identified in the course of working on the details of the budget, particularly in the area of personnel cost.
“In view of the revenue and general economic challenges confronting the nation, the committee had, in a landmark decision not witnessed since the advent of the present democratic dispensation in 1999, reduced the size of the aggregate expenditure and consequently reduced the total recurrent, deficit and borrowing plans,” Goje said.
He explained that the committee filled some of the gaps but that the serious concerns could still be raised in the course of the year because there were many outstanding cases.
Goje’s submission confirmed exclusive reports by The PUNCH that errors and discrepancies had delayed the report of the budget. The National Assembly had failed twice to keep its promise to produce the report before it finally did on Tuesday.
He recommended that subsequent budgets should be submitted in strict compliance with the provision of the Fiscal Responsibility Act to enable the National Assembly to conduct proper engagement and to conclude the budget process in good time.
“There should be proper engagement in the future between the Budget Office of the Federation and the MDAs on budget contents in order to avoid what appears to be a disconnect between them in the processing of budget proposals,” Goje stated.
At the House, the Chairman, House Committee on Appropriation, Mr. Abdulmumin Jibrin, made a similar presentation to his colleagues, saying that the budget was already harmonised and adopted by the joint committee.
The Deputy Senate President, Ike Ekweremadu, cautioned the appropriation committee, to properly address the reduction exercise it carried out in the recurrent expenditure aspect because the development might prevent some workers from receiving their wages in the year.
“The outstanding cases should be identified, especially on the personnel cost, so that we can take advantage of the budget consideration to address it so that we won’t be blamed for the inability to pay salaries,” Ekweremadu said.
On his part, the Senate Minority Leader, Godswill Akpabio, cautioned the Executive against a repeat of the unfortunate experience in the preparation of the 2016 budget, stressing that a situation whereby Ministries, Departments and Agencies of government were denying their proposals was not good enough for the country.
Saraki commended the committee for doing a good job and urged the Presidency and the Executive to play their part well by ensuring that the fiscal document was passed on time for prompt implementation.
He said, “What is unique about this exercise is that for once there is no bickering over the oil benchmark; rather, we all devoted time and energy to ensure that we have a budget that is implementable.
“The budget reflects efficient and equitable allocation of resources to reduce the challenges that we are all aware of. The budget is now a product of bipartisan engagement, commitment and one that is broadly nationalistic. It gives me great joy to commend and appreciate all the efforts that you have all put in.”
Lawmakers at the House of Representatives revisited the controversial Excess Crude Account, advising the executive to ensure that all oil revenues were paid into the Federation Account.
Jibrin informed members that the Appropriation Bill contained provisions restraining the government from channelling revenues into accounts other than the Federation Account.
Meanwhile, the Minister of Budget and National Planning, Senator Udo Udoma, on Wednesday commended the National Assembly for the passage of the 2016 budget.
Udoma, in a statement issued by his Media Adviser, Mr. James Akpandem, expressed satisfaction that the lawmakers did not increase the fiscal deficit in the budget.
Financial and economic experts, who spoke with one of our correspondents, said the passage of the budget would give clarity to everyone as to the direction the government.
The Managing Director and Chief Executive Officer, Economic Associates, Dr. Ayo Teriba, said the N17bn cut in the budget was insignificant, given that the nation’s economy was valued at N95tn.
Teriba said the budget as announced would provide the Central Bank of Nigeria some fiscal guidance, adding, “Not only the CBN, everybody is clear now about the direction in which the government is going to move.”
On the benchmark oil price, he said, “The $38 in the budget is the year average. As we speak, the year-to-date average for the oil price is about $36. Now that oil price is around $41, if it stays above for as long as it has stayed below, then it will get back to an average of $38m.
The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said with the passage of budget, an uptick in economic activities was expected, all things being equal.
Chukwu stated, “But then, the structural bottlenecks have to be addressed. The issue of foreign exchange constraints that customers are facing; the regulation around the forex management needs to be addressed.”
In the meantime, shareholders yesterday disagreed with the Securities and Exchange Commission (SEC) over the cause of the downward trend in the stock market with attendant negative consequences on the economy.
The stakeholders expressed divergent views even as the House of Representatives Committee on Capital Markets and Institutions, headed by Hon. Tajudeen Yusuf began a two- day public hearing on two motions titled: Downward trend of the Nigerian Stock Exchange and urgent need to address the vexed issue of unclaimed dividends.
The President of the Renaissance Shareholders Association, Ambassador Olufemi Timothy, who fired the first shot at the hearing, said the Nigerian Stock Exchange (NSE) has lost Integrity because of shares manipulation and other illegalities.
He wondered how the shares of dead companies kept rising in the Exchange while that of healthy and vibrant companies were static or degraded.
On the post-2008 downward trend of the stock exchange till date, he said: “We investors ( retail, institutions) have discovered that the NSE has turned into something else, hence the continued downward trend of the market without being able to recover for eight years, since 2008.
“Our stock market from our experience as retail investors for two decades now was that the NSE has been turned into gambling centre (Casino Game Market).
Punch with additional report from Upshot