FG Plans 4-year Borrowing Regime To Finance 2012-2015 Budgets
…Slashes NASS Budget Again As Representative Grumble
ABUJA, October 31, (THEWILL) - The Federal Government has planned to finance budgets from 2012-2015 from borrowing despite its growing domestic debt.
It has also cut down the 2012 budget of the National Assembly from N150 billion to N100 billion. National Assembly budget for the 2011 year was N150 billion.
Similarly, the government has revised the 2012 budget oil benchmark to $70 from $75.
It has also planned to finance the 2012 -2015 budgets from borrowing despite the N6 trillion debt profile as well as the increasing budget deficit financing.
Minister of State for Finance, Dr. Yerima Lawan Ngama made the disclosure today at an interactive session with the House committee on appropriation, where he took time to give details of the 2012-2015 Medium Term Financial Framework (MTFF).
Giving reasons for the decision, the Minister said although “the growing domestic debt is very nauseating, we are going to be borrowing and borrowing to finance budget up to 2015.”
According to him, "at least 1/3rd of the capital budget is being used to service domestic debt, that is why we will continue to borrow to finance the nation’s budget till 2015."
He further stated that government has planned a borrowing regime and earmarked N550 billion for debt service in 2012; N474 billion in 2013; N436 billion in 2014 and N402 Billion in 2015.
Dr. Ngama noted that arising from the new outlook, the CBN okayed N153 to one dollar for 2012 as against N150 in the outgoing budget.
He said the capital expenditure has also been reduced from N1.3 trillion in 2011 budget to N1.2 trillion for next year, while 2.48million barrel daily crude production is envisaged for next year’s budget.
On why it tinkered with National Assembly budget, the Minister explained that the review of the MTFF affected virtually all the government programmes in the financial estimates, leading to the slash in the National Assembly budget.
The Minister explained that “When we revised the benchmark, we touched on various expenditure heads, we didn’t mean to reduce NASS alone. It affected capital, overhead, it was only personnel that we didn’t adjust because it has to do with salaries.
A member of the committee had asked “has the number of senators and members reduced? Are you saying that the number of aides of lawmakers has reduced? Is it another way of strangulating National Assembly so that it does not do its work?
He argued that the “National Assembly is not an institution that we want to arbitrarily reduce its votes. You can see that in the last four years we have been increasing the overhead for National Assembly,” the Minister replied.
This is not the first time the National Assembly budget will be cut. In May this year, the National Assembly budget was reduced to N150 billion instead of N232.7 billion when President Jonathan decided to scale down the 2011 budget.
On why the government decided to review the budget benchmark from $75 to $70, he explained that it was aimed at creating room to adequately address key challenges of capital development, overhead cost, deficit financing as well as domestic debts outlays in the medium term expenditure framework that covers the 2012-2015 fiscal regime.
He said, “the capital outlay where most of the projects are handled is taking too much heat and we will have to look inwards, beside the private public partnership initiative (PPP) concessioning and alternative funding, like borrowing."
Chairman of the committee, Hon. John Enoh had earlier sought to know why the nation is losing so much from waivers. He also queried the discrepancy in the unspent funds as contained in the document submitted by the Minister.