House Approves $57/barrel as Crude Oil Benchmark for 2020

• Increases revenue target of NCS from N942.6bn to N1.5tr

By Adedayo Akinwale in Abuja

The House of Representatives has approved $57 per barrel as crude oil benchmark price for the fiscal year 2020, while also increasing the revenue target of the Nigeria Customs Service (NCS) from N942.6 billion to N1.5 trillion.

The House said that the exchange rate of N305/$ should be maintained for economic stability, while adding that more work should be done by the Minister of Finance and all economic advisers and her team on improving the economic growth by increasing the GDP and reducing the inflation rate to single digit.

At the plenary presided over by the Speaker of the House, Hon. Femi Gbajabiamila, on Thursday, the House adopted the report of the Committee on Finance and Appropriation on the 2020 2022 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper and approved the recommendations therein.

The report was laid before the House during the plenary by the chairman of the committee and lawmaker representing Ikeja federal constituency, Hon. James Abiodun Faleke.

The House also approved 2.18mbpd as daily production output in 2020, stressing that in view of the concerted effort by the Nigerian National Petroleum Corporation (NNPC) and security agencies to combat the menace of oil theft and vandalism, that the 2.18 million bpd would be realisable.

The House explained that the increase in revenue target for NCS was as a result of its performance in the last nine months with three months still outstanding.

The House noted that the NCS revenue as at September stood at N1 trillion against the budget figure of N969.8 billion for the year 2019.

The House added that the joint committee commended the NCS for exceeding the targeted revenue despite the global economic challenges and closure of the Nigerian boarders.

The House also said that the sum of N557.4 billion from the revenue increment of NCS be used to reduce borrowing by N200 billion and increase capital expenditure thereby decreasing the size of the budget deficit from N1.7 trillion to N1.5 trillion, while also increasing the total capital available to MDAs by N857 billion, from N1.01 trillion to N1.367 trillion.

The House stressed that the saving on income accruing from the increase of the benchmark amounting to N172 billion, which represents the federal government’s portion of the $2 added to the benchmark be used to pay salaries and emolument of the proposed 30,000 new employees.

The House however ordered that “proper investigation be carried out on the e-collection stamp duties domiciled with the Central Bank of Nigeria (CBN) for the past years so as to show probity and accountability and of course increase the revenue base of the country”.

The green chamber also called for the immediate amendment of the Act of the National Assembly on Production sharing Contracts (PSC) with International Oil Companies.

The House said that proper investigation be carried out on NNPC so as to ascertain the actual cost associated with the Joint Venture agreements.

It also stressed that more government-owned enterprises budget be added to the nation‘s budget to ensure proper checks and balances among all federal government agencies.

The House also stated that the Debt Management Office (DMO) should put more efforts and strategies in managing the foreign and local debts.

The House said that the total estimated expenditure of the federal government should be increased from N 10.002 trillion to N10.729.4 trillion.

The House also said that the National Assembly should expedite action on the passage of the Finance Bill which it said would be brought along with the national budget into law for easy implementation of the 2020 budget, most especially in the area of VAT.

It also called for the urgent review/amendment of the FRA Act and the various laws of the revenue generating agencies to align with current realities.

The House also approved N1.5 trillion as the amount for new borrowing as a result of reduction of N200 billion which was sourced from the increase of revenue target of the Nigeria Custom Service, but insisted that borrowing must be project-tied.

According to the House, in borrowing more, government must remain focused and ensure that it is used to fund critical projects that would increase productivity and contribute to finance such debt.