President Muhammadu Buhari on last Friday vowed that the appropriation bill for 2017 fiscal year will not be tampered with or padded, as happened to the 2016 budget.
He assured that the 2017 document will be better put together than happened the previous year, which was trailed by controversies that caused it to be delayed for several months after initiation.
However, going by observations from the Senate so far, the 2017 budget may suffer death on arrival, unless the executive heeds to advice of both the Senate and experts to withdraw the document it forwarded to the National Assembly, containing the 2017-2019 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP).
In October, President Buhari sent the documents to the National Assembly, proposing that crude oil benchmark will be $42.5 per barrel, to be realized from oil production output of 2.2 million per barrel per day (bpd).
The estimated expenditure is put at a total derivable revenue of N7.775 trillion, without any provision for deficit, when compared with 2016 which had $2.2 billion deficit.
But given the trend of its deliberation on the proposal, the Senate said it had found a number of loopholes on the proposal, calling to question the capability of those who prepared the budget in understanding the challenges facing the country.
Lawmakers who spoke during the reconsideration of President Buhari’s MTEF and FSP lamented that the economic team of the President is in disarray, and accused the executive of deliberately sending an un-implementable projection to them.
It was observed that the proposal projected for 2.2mbp of crude oil for the coming year, without taking into consideration the prevailing Niger Delta crisis, whereby militants in that region have cut daily production to as low as 1.2mbd.
The proposed budget is also based on N290 to a dollar exchange rate. This came as a surprise to many Nigerians, seeing that the current exchange rate to the dollar is more than N300, while the black market rate is more than N400.
Senate majority leader, Godswill Akpabio put it this way: “There seemed to be a deliberate move by the executive to portray the Senate in the bad light before the public through this shoddy handling of budget, as evidenced by the unworkable proposals.”
Some experts said the planks under which the budget is being built are wrong, arguing that the 2016 budget suffered its present crisis because of unrealizable projections that accommodated in it.
According to Prof Pat Utomi, an economist, there is an urgent need for all parties to the making of the budget to have a common goal upon which direction the economy is moving.
He added that a situation whereby distortions are allowed to play part in a budget proposal is the beginning of stagnation of any economy.
On his part, a senior lecturer in the Department of Business Administration , University of Lagos, Dr. Solomon Ezomon supported calls by the Senate that the 2017- 2019 MTEF/ FSP projections be withdrawn on the grounds that even oil producing countries, with relative stability are no longer relying so much on oil revenue for their national plans.
He said the projection as reflected in the 2017 budget has created the impression that Nigeria is not taking the issue of economic diversification seriously.
“More than 85 per cent of the anticipated revenue is to come from oil, whereas nothing is on the ground to show that it will be feasible without first resolving the Niger Delta crisis”, he offered.
Management of Nigeria’s economy has remained a constant headache for the Buhari administration. While it battles with plans for 2017, it’s handling of the economy in 2016 has met with harsh criticisms with strong resistance by Nigerians to government’s plan to borrow about $30 billion to reflate economy.