By Ignatius Okorocha
The Senate on Thursday at an emergency plenary,considered President Muhammadu Buhari’s request for approval of the revised 2020-2022 Medium Term Expenditure Framework/Fiscal Strategy Paper, and revised Appropriation Bill 2020.
Recall that the upper chamber which has been holding plenaries once a week on Tuesdays for almost one month now, adjourned on May 19, 2020 to reconvene on June 2, 2020.
The bill to amend the 2020 Appropriation Act which scaled second reading on the floor was considered immediately after a letter to that effect from President Buhari was read during plenary by the Senate President, Ahmad Lawan.
The revised 2020 Appropriation Act (Amendment) Bill as submitted by the Executive to the National Assembly for approval proposed an estimated N10.51 trillion budget for the 2020 fiscal year.
The revised figure reflects a downward cut by the federal government from the N10.59 trillion passed in December last year.
Leading debate on the 2020 Appropriation Act (Amendment) bill, the Senate Leader, Yahaya Abdullahi, said out of the revised N10,509,654,033,054 budget, N398,505,979,362 is for Statutory Transfers; N2,951,710,000,000 is for Debt Service; N4,928,525,467,849 is for Recurrent Expenditure; while N2,230,912,585,842 is for contribution to the development fund for Capital Expenditure.
Senator Yahaya stated that Personnel and Pension cost was retained at N2.83 trillion and N536.72 trillion respectively.
He added that the aggregate amount available for the Capital Expenditures – exclusive of Capital in Statutory Transfers – in the revised 2020 budget is N2.23 trillion.
The amount, according to him, consists of N1.264 trillion for Ministries, Departments and Agencies of Government; N100.3 billion for COVID-19 expenditures, N20 billion for Capital component for the Special Intervention Programme; N274.85 billion for other Capital supplementation; N141.17 billion Capital budget for Ten GOEs; N42.96 for Donor Grant funded expenditures and N387.30 billion funded by project-tied loans.
He disclosed that in view of the cut to the national budget, the 2020 Appropriation Act (Amendment) bill is now predicated on Oil production of 1.93 million barrels per day and a benchmark oil price of $35 dollar per barrel.
On the exchange rate, Senator Yahaya said an upward adjustment was made by the Central Bank of Nigeria to N360/US$1, adding that, “while the CBN continues to make strenuous efforts to stabilize the exchange rate, it is generally expected that the naira will suffer further devaluation as Nigeria is projected to lose about US$26 billion in oil revenues.”
Explaining the decision of the Federal Government to review the 2020 budget, President Buhari in his letter to the National Assembly noted that same became imperative in view of the sharp decline in crude oil prices and the cut in Nigeria’s crude oil quota occasioned by the COVID-19 pandemic.
The President’s letter reads: “It is with pleasure that I forward the revised 2020 – 2022 Medium Term Expenditure Framework and Fiscal Strategy Paper, and Revised Appropriation Bill 2020 for the kind consideration and approval of the Senate.
“Let me seize this opportunity to express my deep gratitude for the patriotism, cooperation and support of the leadership and Distinguished members of the Senate in our collective effort to amend the Appropriation Act 2020 and accelerate its implementation.
“It has become necessary to revise the 2020 – 2022 MTEF/FSP and amend the Appropriation Act 2020 in view of the sharp decline in crude oil prices and the cut in Nigeria’s crude oil quota occasioned by the COVID-19 pandemic. In effect, the assumptions underlying the 2020 appropriations act are no longer sustainable.
“It is also imperative to adjust expected revenues considering the widespread disruptions in other domestic economic activities, as well as international trade and transportation due to the measures implemented across the world to curtail the spread of the COVID-19 pandemic.
“Furthermore, it is necessary to allocate resources in the Appropriation Act 2020 to ensure effective implementation of required emergency measures and other interventions necessary to mitigate the negative socio-economic effects of of the COVID-19 pandemic.”
President Buhari’s request for revised 2020 budget was referred to the committee on Finance and Appropriation and given two weeks to return same to the Senate on Tuesday next week for consideration.