2020 Budget: Senate raises oil price benchmark to $28pb

By Ignatius Okorocha

The Senate Tuesday jerked up the $25 per barrel oil price benchmark proposed by the executive in the revised Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper ( FSP) forwarded to it for approval to $28 per barrel.

The upper chamber also reduced from 1.9 million barrel per day to 1.8 million barrel per day, oil production proposed by the executive in the MTEF/FSP documents.

This was as it declared monies kept in the Natural Resources Development Accounts as waste.

Senate’s decisions to this effect were sequel to consideration and adoption of the report of its committee on Finance, mandated to work on the revised MTEF/FSP documents by the executive.

Meanwhile other critical parameters like exchange rate of N360 to a US dollar, 14 .43 inflation growth rate, 4.42 GDP growth rate were retained.

Other assumptions cum proposals retained are N5.09 Trillion FGN’s revenue, N10 .51 trillion proposed expenditure, N4.95 Trillion fiscal deficit, N4.17 trillion new borrowings (including Foreign and domestic Borrowing.

Others are N398.5 billion as Statutory transfers, N2.68 trillion for debt serving, N272.9 billion as sinking fund, N536.7 billion for pension and gratuities, .

The upper chamber also retained the critical components of the proposal as presented by the executive with adoption of N10.51 trillion as total expenditure, N4.93 trillion as total recurrent, N2.83 trillion for personnel cost and N2.23 trillion for capital expenditure.

The Chairman of the Committee, Senator Solomon Adeola (APC Lagos West) in his submission said the increase effected on the oil price benchmark was as a result of the recent upward trend of the crude oil market which as today stood at $38 per barrel with a very strong expectation that the price will rise to as $40 to $45 per barrel.

In his remarks after the adoption of the report, the President of the Senate, Ahmad Lawan , urged the Senate Committee on Privatization to liaise with the Bureau of Public Enterprise (BPE) in ensuring that the projected N260 billion from proceeds of privatized agencies, is realised and accordingly used to fund the budget.

He frowned at some of the special accounts being kept by the executive , particularly the Natural Resources Development Accounts.

According to him, such accounts at this time of scarcity of funds to finance the budget are not all that necessary.

“Keeping monies in Natural Resources Development Accounts is more of waste than serving critical purposes”, he said

He thereafter adjourned sitting of the Senate to Tuesday next week for consideration and possible passage of the revised N10.509 trillion 2020 budget.

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