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Disagreement with lawmakers force to postpone presentation of 2014 budget

By The Rainbow

President Goodluck Jonathan has again postponed the presentation of the 2014 budget earlier scheduled for Monday (today).

He was to present his 2014 budget speech to joint session of the National Assembly during which he was expected to make revenue and expenditure projections for the coming year.

This is the second time the presentation is being postponed as it was originally billed to take place last week Tuesday.

Sources attributed the postponement for the second disagreement the Presidency team and lawmakers over plans to curb spending.

It was not immediately known whether a new date has been set for the presentation.

Finance Minister Ngozi Okonjo-Iweala proposed curbing spending in a 2014 budget framework paper after the government spent almost $6 billion of oil savings this year to cover budget revenue shortfalls.

Economists however had said she would struggle to get the budget passed in parliament.

Reuters quotes a source in the national assembly as saying on Tuesday that lawmakers were unhappy with low capital expenditure, which they wanted to see increased to boost Africa’s second-largest economy.

In addition, the House of Representatives and the Senate have both said they want a higher benchmark oil price assumption in the budget to free up more money for spending.

There were no state house security officials at the national assembly on Tuesday morning and a red carpet laid out for the president outside the house of representatives had been removed, a Reuters witness said.

In the budget framework, the finance minister allocated outgoings of 4.5 trillion naira ($28.27 billion) for 2014, against 5 trillion in 2013, but lawmakers usually increase spending and ask the executive arm of government to cover costs with improved revenue collection.

Budget disagreements often centre around the oil benchmark price, over which Africa’s biggest crude exporter saves revenues from oil sales into the excess crude account (ECA).

In the 2014 budget plan document, the finance ministry set the oil benchmark price $74 a barrel.

The House of Representatives and the Senate last week each proposed amendments that would inflate the benchmark to $79 and $76.5 a barrel, respectively. Both moves, by increasing the price, would boost budget spending but reduce savings meant to shield the economy from oil price and production shocks.

The ECA only holds around $3.3 billion, compared with $9 billion in December last year.