The Senate on Wednesday 23rd November 2016 deliberated on the 2017-2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) sent by President Muhammadu Buhari in October 2016. Although the document was eventually referred to its Committees on Appropriation, Finance and National Planning, many legislators expressed dissatisfaction over the document describing many of its projections as “unrealistic”.
It would be recalled that deliberations on the document was initially suspended by the Senate on the basis that the MTEF and FSP were not accompanied with a draft copy of the Medium-Term Development Plan, a comprehensive report of the implementation of the 2016 budget as at third quarter, all fiscal rates, taxes, charges used to derive projected revenue as well as a report on the structure and composition of the debt funding, funding sources and how borrowed funds would be paid. It is however unclear if the documents requested by the Senate were provided before its consideration today.
Leading the debate on the motion to consider the 2017-2019 MTEF and FSP, majority leader, Sen. Ibn Na’allah (APC:Kebbi) described the MTEF and FSP as statutory documents that articulate governments revenue and spending plan as well as its fiscal policy objectives over a period. He also noted that the 2017-2019 MTEF and FSP provides the basis for planning the 2017 budget, based on its assumptions, underlying projections of oil and non-oil revenue and expected Government expenditure and revenue in 2017.
According to the majority leader, the 2017-2019 MTEF and FSP is based on the assumption of oil production at 2.2 million barrels per day at an average oil price of $42.5per barrel for 2017. Furthermore the proposal indicated Government’s projection of a GDP growth of 3.02% in 2017 and an inflation rate expected to moderate at 12.92%. Sen. Na’allah also stated that the 2017 budget would be based on the principles of realism, credibility, allocative strategy, prioritization, social safety nets, transparency and accountability.
Commenting on the MTEF and FSP, majority of Senators were of the opinion that the projections underlying its assumptions were unrealistic and should be returned to the Executive for further review.
Sen. Dino Melaye (APC:Kogi) for instance queried why the Senate in 2015 signed the MTEF and FSP for 2016-2019 and wondered why another one was before the Senate for 2017-2019. Sen. Bayero Nafada (APC:Gombe) also noted that with an official exchange rate currently at N320 to 1 dollar, the projection of N290 to 1 dollar in the MTEF was not in tandem with current reality. Sen. John Enoh (PDP:Cross River) also stated that oil production of 2.2 million barrels per day was unrealistic and called for strategic dialogue with Niger Delta militants to put an end to militancy as Nigeria continues to lose 600-800 barrels per day due to destruction of oil facilities.
In addition, Sen. Adeola Solomon (APC:Lagos) mentioned that it would have been more appropriate to consider the performance of the 2016 budget before considering the MTEF and FSP in order to provide a solid basis for proper estimates.
However, Sen. Godswill Akpabio (PDP:Akwa Ibom) suggested that the document be referred to its Committees on Appropriation, Finance and National Planning since President Muhammadu Buhari was likely to present the 2017 budget to the National Assembly 1st December 2016.
Senate President Bukola Saraki (APC:Kwara) while committing the MTEF and FSP to the Committees on Appropriation, Finance and National planning, urged them to present the 2016 budget performance before presenting the report on MTEF and FSP.
