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Thursday, 11 October 2012

Reps condemn Excess Crude Account management


The House of Representatives yesterday expressed concern over the management of the Excess Crude Account (ECA) and the non-inclusion of the Gas revenue in the Medium Term Expenditure Framework (MTEF) sent to the House by President Goodluck Jonathan.
Speaker Aminu Tambuwal said there were two critical omissions in the 2013-2015 MTEF namely: “That the Revenue from Gas, running into billions of dollars, is not reflected, and External borrowing is similarly not reflected.”
The House also flayed the high budget deficit in the 2013 budget, saying the reduction of the deficit and domestic borrowing was its reason for increasing the benchmark for crude oil to $80 from the $75 proposed by the Executive.
The deficit in the 2013 proposed budget is N1.037 trillion.
Tambuwal was delivering a vote of thanks after the presentation of the 2013 budget by President Goodluck Jonathan to a joint session of the National Assembly yesterday.
Tambuwal spoke of the Legislature’s concern for the management of the excess crude revenues. He said: “Since 2010, the Appropriation Act has legislated that the excess crude component of the Federation Account be operated under separate records for purpose of transparency and accountability. Besides, Section 30 of the Fiscal Responsibility Act makes it mandatory for the Budget Office to submit budget implementation Assessment reports to the National Assembly and the Fiscal Responsibility Commission on a quarterly basis and to publish same on the Ministry of Finance Website.
“The President may be unaware that the National Assembly is neither availed evidence of implementation of this policy along with the records of Federal Government’s portion of the excess crude funds nor the quarterly implementation reports, as required under the two Acts. Mr. President may wish to give appropriate directives to ensure full and speedy compliance by relevant agencies.”
He expressed displeasure at the level of implementation of the 2012 budget, saying: “As I speak, interim field oversight reports from House Committees on the 2012 budget implementation are clearly unimpressive both in terms of releases as well as utilisation and this is a great challenge to all of us. “
The Speaker charged the President on the composition of the Council for Public Procurement, saying it is very critical for budget implementation.
“The Composition of the Public Procurement Council provided under the Public Procurement Act is very critical to budget implementation. The sanctity of extant legislations and respect for the rule of law are critical hallmarks of true democracy, we therefore once more call on Mr. President to expeditiously constitute this council so as to free the Federal Executive Council from the burden of contract administration, so they can concentrate on the more sublime issues of their constitutional roles and responsibilities.
“Incidentally, the present Constitution of the Bureau of Public Procurement has been identified as one of the bottlenecks to effective capital budget implementation.”
On the huge deficit in the 2013-2015 MTEF he said: “It will be recalled that the 2012 budget contained a deficit and the main source of funding this deficit was domestic borrowing. Figures emanating from the Debt Management Office regarding domestic borrowing are however worrisome.
“At a whopping $33.6 billion government appears to be monopolizing domestic borrowing to the unhealthy exclusion of the private sector. This is certainly a matter of grave concern because global statistics on sustainable debt-GDP ratio percentages can not continue to be used as guide for an economy that is not keeping pace with global trends.
“In our effort to address this concern, only yesterday (Tuesday), in passing the 2013-2015 Medium Term Expenditure Framework (MTEF), which is the basis for annual Budgets, the House resolved to raise the oil price benchmark from 75 US Dollars per barrel to 80 US Dollars per barrel with the objective that the difference of 5 US Dollars per barrel be channeled exclusively towards reducing the deficit in the budget and consequently reducing domestic borrowing for same purpose by 66 per cent.
“The trend of Nigeria’s foreign reserves has taken an upward trajectory in recent months, on the back of steady production levels and robust oil prices. The latest figure for the country’s foreign reserve, as of 04 October 2012, stands at 41.48Billion US Dollars, a 26-month high.
“Concerns are however being expressed regarding the management and accounting reportage of our foreign reserve stock as to whether the figures reported are cumulative accruing inflows only or are inclusive of interests accruing from the management process or attributed to other sources of accretion. This matter becomes urgent especially when accruing management fees thereof is not reflected in the Medium Term Expenditure Framework (MTEF).
“There must be transparency, accountability and probity in the management of our resources generally, given recent developments that indicate our exposure to unforeseen natural disasters. We certainly, for instance, cannot take the protection of our environment for granted.
The Speaker said there would continue to be friction between the Executive and Legislature if the president keeps shunning resolutions of the National Assembly.
He said: “I am compelled however to state that the National Assembly is becoming increasingly concerned about the disregard for its resolutions and public comments by certain functionaries of the Executive on same. I cite the Senate Resolution on the Bureau of Public Enterprises (BPE), the House Resolution on the state of insecurity of the nation, requesting Mr. President to visit and brief the House, the House of Representatives Resolution on the Security and Exchange Commission (SEC), the concurrent Resolution of the two Chambers on Bakassi among others.
“This does not promote cordial relationship between the Executive and Legislature and consequently stability in the polity.
“We must therefore, continue to work together to redeem this nation from the clutches of poverty and disease. The vaunted growth in the nation’s GDP must be reflected in the lives of everyone, not just a few people privileged to hold public office or those enjoying unfair public patronage.”

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