By Ignatius Okorocha
Alarmed at the increasing downward trend in the global economy, the Nigeria Senate on Tuesday said it may consider a review of 2020 budget of 10.5 trillion naira passed by the National Assembly and assented by President Muhammadu Buhari.
This resolution of the apex legislative body followed adoption of the recommendations of its joint committees on Finance, Appropriation, National Planning and Petroleum Resources.
Senate had on March 10,constituted joint committee to constantly assess,examine and suggest to it steps to be taken on economic situation arising from sharp drop in oil prices caused by COVID -19 outbreak and uproar between Saudi Arabia and Russia governments.
In his submission of the joint committee’s interim report at plenary, Chairman of the committee Sen.Solomon Adeola (APC-Lagos) said the committee held its inaugural meeting on March 11,with Minister of Finance, Budget and National Planning in attendance.
He said the joint committee discussed wide range of issues bordering on current economic realities which included current Appropriation Act 2020 passed by the National Assembly.
The committee he further explained looked at the issues discussed from short and long term solutions.
He said the short term solution was to address the sharp drop in the crude oil price which was creating difficulties in funding the 2020 Appropriation Act.
“The long term solution discussed is the need to consider and pass the Petroleum Industry Bill (PIB), which is yet to be laid before the National Assembly.
“This will address the issue of cost of production and Gas flaring where the country’s resources is going down the drain and other issues that might affect the petroleum sector.”
He said the committee
Also sought and receive different views from experts in finance and economy on state of the economy and other issues as it affects the economy.
According to him, experts believe that fund from internal loans and bonds sourced from the Capital Market should be mobilised to fund infrastructural development, a model exemplified by India with population of 1.1 Billion people.
This,they believe would be much cheaper for Nigeria as a nation.
He said experts believed it was time Nigerian should start to look beyond oil as a major source of revenue and ensure proper diversification of the economy.
“Experts noted that our shallow policy in agriculture is responsible for our dependency on oil as our major source of income.
“The Government should show more commitment in returning the country as a major leader in agricultural produce both within and outside the African continent.
He said: “On the issue of budget implementation for 2020, the Minister of Finance through the Accountant General Office informed the Joint Committee that budget implementation has since commenced with relevant releases ranging from Personnel and Overhead Cost for the month of January and February.
“Which includes statutory transfer, pension, and payment of debt both foreign and Local.”
He said the capital releases for the first quarter commence by second week of March with the sum of N340 billion to be released to the critical sector of the economy such as Transport, Agriculture, Works and Housing, Health and other Social and Real sector.
He said the effects of the sharp drop in the crude oil price will be felt with the effect from May, June and July from the committees findings.
The commitee recommends as follows:
“The downsizing of the Appropriation Act 2020 as passed by the National Assembly is inevitable.
“But the modalities to be adopted in the reduction of the budget must be used as suggested by the Appropriation Chairman and agreed to by the Joint Committee.
“That the revenue generating agencies must be alive to their responsibility in line with the Fiscal Responsibility Act passed by the National Assembly and other relevant laws of the National Assembly.
“That other issues affecting the oil sector such as cost of production of a barrel of Crude oil and any other matter taken care off in PIB.
“That the committee will invite other relevant Stakeholders to an interactive session.
“The Stakeholders are; Central Bank of Nigeria,(CBN) Nigerian National Petroleum Corporation.(NNPC),
“Ministry of Finance, Budget and National Planning; and also engage relevant Stakeholders in the Business community for their own inputs and suggestions on the way forward of the present economic realities.”