Budget: FG cuts 2010 revenue to N2.39trn

2010-07-09
VANGUARD Newspaper- Inalegwu Shaibu

President Goodluck Jonathan flanked by the visiting Prime Minister, bangladesh, Mrs. Sheik Hasina (1) and the foreign Affairs Minister, Mr Odein Ajumogobia during a courtesy visit to the President ahead of the D-8 Summit at the State House, Abuja. Photo: Abayomi Adeshida.

ABUJA—PRESIDENT Goodluck Jonathan, yesterday, asked the National Assembly to reduce the oil production assumption in the country’s 2010 spending plans to 2.2 million barrels per day, bpd, from 2.25 million, according to a letter to the National Assembly.

The President in the letter said that recent information from the Nigerian National Petroleum Corporation, NNPC, indicated that oil production for the 2010 fiscal year was likely to average at about 2.2 million bpd.

It said the assumed oil price should remain at $60 per barrel and that the revision would imply aggregate revenue for the Federal Government of N2.392 trillion and a deficit of N1.829 trillion, which it said was equivalent to around 5.6 per cent of GDP.

This implies that the Federal Government has to cut down on projects it had planned to execute for the benefit of Nigerians in the 2010 budget due to the inability of government to generate the needed funds from oil, its major source of revenue to carry out such projects.

The proposed amendment was the second in the year. In June, Jonathan asked parliament to trim the original N 4.6 trillion spending plan for 2010 to N 4.2 trillion, but also asked them to consider a proposed N640 billion supplementary budget.

In his latest letter, Jonathan also proposed slight amendments to the supplementary budget, decreasing allocations to some ministries but requesting additional funds for the Niger Delta Ministry to begin training programmes for youths in the restive oil_producing region.

The President also reduced the N10 billion proposed for Nigeria at 50 celebrations to N6.9 billion in response to public outcry against the initial proposal.

In his letter to the Senate which was read on the floor by the Senate President, Senator David Mark, the President also pushed for a review of the 2010 supplementary budget by slightly reversing the aggregate Federal Government expenditure of N4.220 trillion to N4.206 trillion.

The letter also contained proposal for additional capital votes to the Ministry of Niger Delta Affairs to commence training programmes for non militant Niger Delta youths.

Revenue framework

Part of the letter reads: “Recent information from the Nigerian National Petroleum Corporation, NNPC, indicates that oil production for the 2010 fiscal year is likely average at about 2.2 million barrels per day, as opposed to the 2.25 million barrels per day as assumption made in the last revision to the revenue framework to be based on assumptions for oil production of 2.2 million barrels per day and an oil price benchmark of $60 per barrel.

This revision will imply aggregate revenue for the Federal Government Budget of N2.392 trillion and a deficit of about N1.829 trillion.”

The slashed amount of N2.682 billion had been transferred as core capital funds for projects in Federal Government ministries, departments and agencies, while N830bn was removed totally.

The slashed amounts include N2.250 billion for the renovation of the Abuja international airport, N120 million for renovation work at the National Stadium, N215 million for renovation and refurbishment of State House Banquet Hall and N97 million for replacements of carpet at the International Conference Centre, ICC, Abuja.

Other expenditures removed from the anniversary celebration were N540 million for designing and mounting of Unity Towers in the 36 states of the federation, N80 million for designing of monuments for founding fathers, N10 million for commissioning of Golden Jubilee Plaza and N200 million for compendium for legislatures and judiciary.

Seeking the approval of the Senate on the adjustment to amendment budget proposals, the President said it had become necessary to help government fund key projects in the military and health sector.

Jonathan in the letter said: “Regarding expenditure to be appropriated by the 2010 amendment budget proposal, I seek your cooperation to substitute the budgets of eight MDAs with revised version.

“This substitution is as a result of reprioritization of capital projects by the State House, Nigerian Army, Nigerian Air Force, the intelligence community, and the ministries of Aviation, Health, the Federal Capital Territory and Foreign Affairs.”

 

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