The House of Representatives has threatened to shut the Excess Crude Oil Account by raising the benchmark for crude oil to $80 per barrel.
It accused the federal government of deliberately lowering the benchmark, keeping it at $65 per barrel so that it can claim all the money above that as ‘extra’ to be placed in an account from where funds are drawn without recourse to the National Assembly.
It also vowed to block government from funding part of its recurrent expenditure with loans, because the nation is currently burdened by a huge N1.38 trillion deficit in this year’s proposed N4.226 trillion budget.
The lawmakers deplored President Goodluck Jonathan’s decision to seek for new loans this year to help tackle a deficit funding that surpasses the total capital expenditure of the budget by more than N300 billion.
Sensible borrowing
John Enoh, chairman, House committee on Finance, said if the loans will be used for developmental projects as “done worldwide,” then there are prospects that the leftover of more than N300 billion will be used to fill the deficit gap left in the recurrent budget too.
“We will borrow, yes, every country borrows, but we cannot borrow more than our capital budget,” he told a government team led by Bright Okogu, the Director General of the Budget Office of the Federation, at a budget proposal meeting yesterday.
The 2011 budget is predicated on an estimated oil production of 2.3 million barrels per day; an oil benchmark of $65 per barrel; exchange rate of N150 to the US dollar; joint venture cash calls of $4.5 billion, and projected growth rate of seven percent.
With a huge 59 per cent, recurrent expenditure for this year has, as usual, tipped far ahead of capital expenditure whose contents and implementation are often seen as key to the growth of a developing nation like Nigeria.
This year’s budget proposal follows the pledge by federal lawmakers, and even administration officials, to close the wide margin between recurrent and capital outlay and find some ways of dedicating more funds for the nation’s deplorable infrastructure.
No loans for salary payments
At a preliminary hearing on the budget yesterday, the House Finance committee underpinned that position making it clear that it will oppose loans intended at servicing personnel and overhead costs.
The lawmakers said any such borrowing should not exceed the value of the capital and the remaining N300 billion, should be sourced through an enhanced government revenue drive.
Mr. Enoh asked, “Can’t we raise the target of say (Nigerian) Customs from the present N450 billion rather than borrowing?”
In his reply, the government representative, Mr. Okogu said the administration is hoping to reap from the ongoing forensic audit of the Nigerian National Petroleum Corporation and to get more funds from pressing the Ministers, Department and Agencies (MDAs), to make more refunds to the federal purse.
It accused the federal government of deliberately lowering the benchmark, keeping it at $65 per barrel so that it can claim all the money above that as ‘extra’ to be placed in an account from where funds are drawn without recourse to the National Assembly.
It also vowed to block government from funding part of its recurrent expenditure with loans, because the nation is currently burdened by a huge N1.38 trillion deficit in this year’s proposed N4.226 trillion budget.
The lawmakers deplored President Goodluck Jonathan’s decision to seek for new loans this year to help tackle a deficit funding that surpasses the total capital expenditure of the budget by more than N300 billion.
Sensible borrowing
John Enoh, chairman, House committee on Finance, said if the loans will be used for developmental projects as “done worldwide,” then there are prospects that the leftover of more than N300 billion will be used to fill the deficit gap left in the recurrent budget too.
“We will borrow, yes, every country borrows, but we cannot borrow more than our capital budget,” he told a government team led by Bright Okogu, the Director General of the Budget Office of the Federation, at a budget proposal meeting yesterday.
The 2011 budget is predicated on an estimated oil production of 2.3 million barrels per day; an oil benchmark of $65 per barrel; exchange rate of N150 to the US dollar; joint venture cash calls of $4.5 billion, and projected growth rate of seven percent.
With a huge 59 per cent, recurrent expenditure for this year has, as usual, tipped far ahead of capital expenditure whose contents and implementation are often seen as key to the growth of a developing nation like Nigeria.
This year’s budget proposal follows the pledge by federal lawmakers, and even administration officials, to close the wide margin between recurrent and capital outlay and find some ways of dedicating more funds for the nation’s deplorable infrastructure.
No loans for salary payments
At a preliminary hearing on the budget yesterday, the House Finance committee underpinned that position making it clear that it will oppose loans intended at servicing personnel and overhead costs.
The lawmakers said any such borrowing should not exceed the value of the capital and the remaining N300 billion, should be sourced through an enhanced government revenue drive.
Mr. Enoh asked, “Can’t we raise the target of say (Nigerian) Customs from the present N450 billion rather than borrowing?”
In his reply, the government representative, Mr. Okogu said the administration is hoping to reap from the ongoing forensic audit of the Nigerian National Petroleum Corporation and to get more funds from pressing the Ministers, Department and Agencies (MDAs), to make more refunds to the federal purse.
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