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2012 Budget: Presidency Slashes Revenue Framework, Lowers Oil Benchmark To $70

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.... Exchange Rate Now Pegged at N155 to $1

ABUJA, November 03, (THEWILL) - The Presidency has made a volte face to alter some major elements in the revenue framework in the proposed 2012 budget.

The appropriation bill proposal is however yet to be officially forwarded to the National Assembly for consideration.

The Director, Budget Office, Dr. Bright Okogu disclosed this yesterday at an interactive session with the Senate Committee on Finance.

Also, the Comptroller General [CG] of Nigerian Customs Service [NCS], Alhaji Abdulllahi Dikko Inde has alleged undue influence from some quarters in the operations of the service.

Okogu told the Senators that although the oil benchmark for year 2012 was put at $75 per barrel in the Medium Term Expenditure Framework [MTEF] forwarded by President Goodluck Jonathan to the National Assembly last month, after several consultations with relevant stakeholders, it was discovered that the benchmark would not be realistic and as a result it was reduce to $70 per barrel.

“In the framework forwarded to the National Assembly, we put the oil benchmark at $75 per barrel but after consultations with stakeholders, we are likely to revise it to $70 per barrel,” he said.

In the same vein, he hinted that the exchange rate being contemplated by the executive in the yet to be forwarded appropriation bill proposal is now N155 to the dollar, Gross Domestic Product [GDP] 7.2% and inflation rate of 9.5%.

Okogu however, explained that these figures were arrived at after discussions with the National Planning Commission.

The Director-General put expected revenue from privatisation at N10bn and explained that in view of the past experience where some agencies slated for privatisation could not be sold, there was need for ‘caution’.

He added that fiscal deficit has been put at N1.1 trillion and disclosed that all government agencies have been asked to sit up in order to make the budget a reality.

On the domestic debt profile, Okogu lamented the quantum but assured that an arrangement had been put in place to reduce it to about N500bn. “The issue of local debt is now causing a lot of concern. The programme we have will reduce it to about N500bn,” he added.

The Senate Committee Chairman on Local and Foreign Debts, Senator Ehigie Uzamere, had last month put the local debt at about N6 trillion.

Meanwhile, in his submission to the committee on finance, the Comptroller General [CG] of Nigerian Customs Service [NCS], Dikko Abdullahi disclosed that the service was able to realize the revenue target set for it for year 2011 in September stressing that more revenue would still be realised before the end of the year.

“So far, [from January-October, 2011], N597,622,172,464.87 has been realised. With this feat, we have surpassed this year’s target even as more is expected for November and December, 2011,’’ he said.

The target for the year was put at N596,096,096,900,000.00.

Abdullahi also told the committee that with effect from next year, all activities of the service would be fully automated so that no importer would have reason to have physical contact with officers and men of the service. “By January next year, no importer will have direct contact with customs. Everything will be on the internet. We are going to have challenges but we are prepared.”

The CG expressed concern over activities of exporters whom he alleged have a scheme called Negotiable Duty Credit Certificate which allows the importers to collect some revenue amounting to about N50.3bn.

He complained about interference from some quarters in the course of operations of the Customs particularly in the area of seizures. “What we are seeing is pressure from left and right that this or that person is mine. We need political will to help Nigerian Customs apply full weight of the law,” he said.

The chairman of the committee, Bassey Otu, assured the committee would do everything to remove impediments to the smooth operation of the service.