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Reps disagree over Medium Term Expenditure Framework
As President Mohammadu Buhari presents 2017 budget estimates at 12pm today, most members of the House of Representatives yesterday described the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Policy (FSP) 2017-2019 as unrealistic.
Though the bill passed second reading, most of the lawmakers that spoke on the Document said they were left with no choice but to support it, as the Buhari was billed to present the budget estimates today.
Deputy Speaker, Yussuff Lasun however disagreed with his colleagues saying the projections of document have taken adequate note of the need to diversify the economy.
Shortly before the commencement of the business of the day, Speaker Yakubu Dogara disloved plenary into executive session which was to appeal to the lawmakers, especially the opposition to allow the motion pass and commit it to the committees that would take professional look at it. The session took less than 20 minutes.
House Leader Femi Gbajabiamila, while presenting the document thanked his colleagues and the opposition particularly for agreeing to pass the document.
The appreciation did not however stopped the opposition from picking holes in the document.
Defending the document, Gbajabiamila said revenue target of N4.169 trillion and total expenditure of N6,687 trillion are audacious to move the country out of recession but are achievable only on effective combination if strong fiscal and monetary tools by government, increase the tax base in the country, curtailing militancy in the Niger Delta, injecting back looted funds, diversification of the country’s revenue sources, controlled government spending and strong anti-leakage and anti-corruption drives.
According to him, the fiscal strategy for 2017-2019 would be hinged on macroeconomic stability and improved planning, budgeting and monitoring and evaluation framework supported with the zero – based budgeting introduced in 2016.
He highlighted the assumptions on inflation rate at 12.92 percent, MPR at 14 per cent and Cash Reserve Ratio at 20 per cent, which he said are expected to increase money supply and boost economic activities.
He further noted that with the country’s foreign reserve at an 11 year low of $24.12b, the Exchange Rate was fixed at N290.
It was however gathered that the Budget Office considered N290 exchange rate as unrealistic and was pushing for it to be moved to N305 to encourage foreign capital inflow.
Crude oil benchmark was put at $42.50 per barrel at daily production of 2.2 million barrels per day (mbpd).
“As stated, there is a general setback in the global economy and that has been taken into consideration in the preparation of the 2017-2019 MTEF.
“The overall objective of the government is improved economy with prudent management of the nation’s resources.
“Though there is steady improvement in oil prices, the government has chosen to play safe and benchmark oil price at $42.5, $45 and $50 for 2019, 2018 and 2019.
“The policy document is focused on stimulating the economy with a strategic increase on key capital investment, public financial management reforms, improved job creation and reduced cost of doing business in the country amongst others,” the House Leader added.
Several lawmakers that spoke on the document faulted the N290 exchange rate as well as the 2.2million bpd benchmarks saying they were unrealistic.