EDEGBE ODEMWINGIE reports on the fallouts of the recently concluded debates on the 2013 budget by the House of Representatives. Issues around discretionary waivers, Excess Crude Account and crude oil benchmark topped agenda.
With Nigeria’s Excess Crude Account presently at $8.4 billion, the House of Representatives says the account is illegal and unconstitutional. Federal lawmakers say they will take advantage of the ongoing constitution amendment process to scrap the account which, it insists, is in violation of Section 80 (1,2,3) of the 1999 constitution (as amended).
The account, used to save oil revenues above a base amount derived from a defined benchmark price, was established in 2004 and its objective is primarily to protect planned budgets against shortfalls due to fluntuating crude oil prices.
Lawmakers say the operation of the account by the federal government is in clear breach of the constitution that provides for all government’s funds to be remitted to the country’s consolidated federation account.
House spokesman, Zakari Mohammed, on Wednesday while briefing newsmen on the state of affairs of the House in view of the faceoff between the legislature and the executive on the oil benchmark for the 2013 budget, stated that the slush account has been largely misapplied.
Mohammed said:”For us, the benchmark should be $80 per barrel and it is simple. Our calculation is why make it $75 and bring in money to the excess crude account which is illegal and share to the three tiers of government?
“Most of the time, the excess crude has not been properly applied. Why keep money for certain people to misapply? We are saying, at $80 per barrel, whatever is the difference or $5 can be used to service domestic debt. In the last two years, how has the account bettered our lot?
“It is a constitutional provision that all revenues accruable to the federal government should go to the consolidated account. I think the excess crude account is ‘bring the money let us share it’. Because somebody somewhere is profiteering from that arrangement, they will not want it to die. For us, we will be focused and we will keep fighting it. We will take advantage of the amendment of the constitution to take care of some of these grey areas”.
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Discretionary Waivers
Following the revenue projection of N3.891 trillion as contained in the 2013 budget estimates, federal lawmakers on Thursday tackled President Goodluck Jonathan on the multi-billion naira discretionary waivers granted to business concerns – local and international – as they expressed concerns that the waivers will significantly dent the country’s revenue profile for 2013.
The disclosures were made as the House of Representatives concluded debates on the general principles of the N4.924 trillion 2013 budget presented by the President on October 10.
The House Minority Leader, Femi Gbajabiamila (Lagos/ACN) said there was need for legislative regulation of waivers as opposed to the present situation where such exemptions were granted by presidential fiat.
Gbajabiamila insisted that waivers must be presented to the National Assembly in form of bills for legislative vetting and deliberation.
“The budget presented contains a number of waivers by presidential fiat that seeks to reduce the revenue that comes to the country. We are talking about deficit and we are reducing revenue”, the Minority Leader stated at Thursday’s plenary.
Farouk Lawan (Kano/PDP) raised questions whether the waivers announced in the aviation sector will not be exploited by what he termed “economic saboteurs,” to import private jets.
In order to promote agriculture and industry, Jonathan in the 2013 budget presented to a joint session of the National Assembly, announced that government will continue to implement supportive fiscal measures for some priority areas.
With effect from January 2013, machinery and spare parts imported for local sugar manufacturing industries will now attract zero per cent duty including a five-year tax holiday for “sugarcane to sugar” value chain investors.
In addition, all commercial aircraft and aircraft spare parts imported for use in Nigeria will now attract zero per cent duty and zero per cent Value Added Tax (VAT).
Also, to encourage the production of mass transit vehicles in Nigeria, duty on Completely Knocked Down (CKD) components for mass transit buses of at least 40-seater capacity, will now be zero per cent, down from five per cent.
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Benchmark deadlock
A four-hour meeting between a high powered private sector lobby team selected by President Goodluck Jonathan and principal officers of the House of Representatives was Friday deadlocked after both parties failed to shift grounds on the contentious crude oil benchmark for the 2013 budget, LEADERSHIP reported.
The House insisted that there is no going back on the $80 per barrel benchmark it recommended in the Medium Term Expenditure Framework (MTEF) for the 2013 budget. The executive arm of government insisted on $75.
The close-door meeting held in Abuja which lasted till 1am Friday, was led on the private sector side by the Group Managing Director and Chief Executive Officer of Access Bank Plc, Mr Aigboje Imoukhuede.
Imoukhuede, who heads the Presidential Committee on Verification and Reconciliation of Fuel Subsidy Payments, attended the meeting with the Managing Director and Chief Executive Officer of Zenith Bank, Godwin Emefiele and Director-General of the Nigerian Economic Summit Group (NESG), Mr Frank Nweke Jnr.
The House of Representatives delegation was led by the Deputy Speaker, Emeka Ihedioha alongside the House Deputy Leader, Leo Ogor and the Chairman, House Committee on Finance, Abdulmumin Jibrin.
LEADERSHIP checks revealed that the meeting became deadlocked after the presidential lobby team reportedly failed to provide convincing positions on the executive’s insistence on a $75 per barrel benchmark. A source who attended the meeting but was not permitted to disclose the outcomes, told our reporter that the House of Representatives re-echoed its position that the $5 difference will be channelled to reduce the 2013 budget deficit and reduce Nigeria’s domestic borrowings by 66 per cent.
Again the Ihedioha led House delegation reportedly queried the executive seeming distortion of facts on the latter’s insistence on a $75 per barrel oil benchmark price against the backdrop of crisis in the Eurozone – a position the lawmakers considered largely irrelevant judging by the percentage of Nigeria’s crude oil consumed by European countries.
The Lower House delegation also accused the executive arm of government of being economical with facts by not considering similar crises in the Middle East and in Sudan which will keep oil prices high. They insisted that most credible forecast by international agencies have projected above $100 per barrel in 2013.
Both parties reportedly agreed to meet at a yet to be confirmed date to continue deliberations on the matter.
Meanwhile, the leadership of the National Assembly has set up a 12-member joint conference committee to arrive at a unified oil benchmark for the 2013 budget.
The conference is co-chaired by the heads of the Senate and House of Representatives Committees on Finance, Senate Committee on Finance, Alhaji Ahmed Markafi and Abdulmumin Jibrin respectively.
The 12-member committee is split equally between both chambers of the National Assembly.
LEADERSHIP learnt that if a consensus is not achieved on a unified oil benchmark price at the conference, both chambers will meet in a joint session and vote.
The Senate had adopted a $78 per barrel benchmark stopping short at providing reasons of how it arrived at the benchmark price.
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Reps Fault Dismal Execution Of Agric projects
Unimpressed by dismal execution of the 2012 capital budget by Agencies under the Ministry of Agriculture, the House of Representatives panel on Agriculture says it will check attempts to relegate the agricultural sector.
The Mohammed Tahir Mongunu led House Committee on Agriculture accused the federal government of paying lip service to efforts to revamp the agriculture sector and diversify from the present oil-driven monolithic economy.
These were fallouts of the panel on Agriculture and Rural Development, Wednesday oversight visit to the Nigeria Agricultural Quarantine Service (NAQS) and the Agricultural Research Council of Nigeria (ARCN). Members of the committee expressed dismay at the level of performance of the capital budget by both outfits.
Mongunu said, “As a responsible and accountable legislature, we will not fold our arms and see dividends of democracy in the area of agriculture not being delivered to the Nigerian people, particularly with regards to the non-implementation of the capital aspect of the appropriation law.
Mongunu who led members of the panel to the office of the Minister of Agriculture, Akinwumi Adesina, late Thursday, lamented that implementation of the project by the various agricultural agencies across the country stood at a dismal 40 per cent.
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