MTEF: House Approves N1.7trn for Oil Subsidy, Slashes 2023 Budget Deficit to N10.5trn

*Okays $73 per barrel oil price 

*Begins probe of alleged illegal dismissal of Col. Hassan, others by Nigerian Army

Udora Orizu in Abuja

The House of Representatives, at plenary yesterday, approved the recommendation by its Committee on Finance that the oil subsidy payable in the 2023 financial year should be N1.7 trillion, as against the N3.6 trillion proposed by the executive arm of government.
The lawmakers also reduced the fiscal deficit of N11.3 trillion to N10.5 trillion for 2023. The reduction was based on the expected savings from subsidy, amounting to N737.31 billion.

The federal government projected that the scheme would last only the first six months of the year, with savings to the tune of N3.36 trillion.
They also approved the recommendations of the daily crude oil production of 1.69mbpd, 1.83mbpd, and 1.83mbpd for 2021, 2022, and 2023, respectively. It approved oil price of $73 per barrel as a result of continuous increase in the price of oil in the global market and other peculiar situations, such as invasion of Ukraine by Russia. It said this would result in the saving of N155 billion.

The adjustments followed the adoption of the recommendations of the report of the House Committee on Finance on the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

In the report presented by the committee’s Deputy Chairman, Hon. Abdullahi Saidu, the House approved N9.3 trillion revenue as a result of increase in the benchmark as the ceiling oil subsidy of the year in review. This was above the federal government’s projected total revenue of N8.46 trillion captured in the MTEF/FSP 2023-2025 presentation by Minister of Finance, Budget and National Planning, Zainab Ahmed, to the committee earlier.
The lawmakers further approved the exchange rate of N437.57 as contained in the MTEF-FSP document, with continuous engagement between the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance with a view to bridging the gap between the official market and parallel market.

Other recommendations approved included, “The projected GDP growth rate of 3.75 per cent be approved; the projected Inflation rate of 17.16 per cent; projected New Borrowings of N8.437 trillion (including Foreign and domestic Borrowing), subject to the approval of the provision of details of the borrowing plan by the National Assembly; fiscal deficit of N10.563 trillion (including GOEs). Statutory transfers, totalling, N722.11 billion; Debt Service estimate of N6.31 trillion; sinking Fund to the tune of N247.7 billion; Pension, Gratuities & Retirees Benefits of N827.8 billion.

“Aggregate FGN Expenditure of N19.76 trillion, made up of Total Recurrent (Non-debt) of N8.53 trillion; Personnel Costs (MDAs) of N827.8 billion; Capital expenditure (exclusive of Transfers) N3.96 trillion; Special Intervention (Recurrent) amounting to N350 billion; and Special intervention (Capital) of N7 billion. A significant reduction in both waivers and tax exemptions of corporate organisations to cushion the effect of the budget deficit.

“All revenue-generating agencies should reconcile their accounts with the Fiscal Responsibility Commission and the Office of the Accountant General of the Federation (OAGF), the report of which should be submitted to the Committee of Finance for consideration and approval. “There should be a common electronic platform for reconciliations amongst the government MDAs, OAGF and Fiscal Responsibility Commission for effective monitoring and remittances; there should be strict compliance with the Constitution, Fiscal Responsibility Act and other extant laws by all agencies of the government with regards to revenue remittances.
“The relevant oversight Committees of the National Assembly are at liberty to remove recycled projects in their budget proposal during the Committees’ budget defence; mainstreaming of annual GOEs’ budgets into the federal government budget processes to ensure the same level of scrutiny, procurement and monitoring exercise.”

Meanwhile, the House received a report from chairman of the police affairs committee, Hon. Bello Kumo, on the issuance from Statutory Budget of the Nigeria Police Trust Fund, the total sum of N65, 905, 252, 467 for personnel and overhead expenditure for the year ending, 2022.

The House of Representatives Committee on Public Petitions also began investigation into the refusal of the Nigerian Army to comply with a court judgement ordering it to reinstate Colonel Danladi Hassan and others, who were compulsorily retired in 2016.
Hassan and 37 other senior officers were forced to retire by the army in June 2016. The mass dismissal affected nine Major Generals, 11 Brigadier Generals, seven Colonels, and 11 Lieutenant Colonels.

In 2019, the National Industrial Court in Abuja ordered the Army to reinstate Colonel Danladi Hassan. Delivering judgement in the suit filed by Hassan, Justice Sanusi Kado declared the letter written by the army on the retirement of Hassan was null and void. He ordered that the colonel be given all his rights and privileges. The Army lost its bid to reverse the judgement.

However, four years later, the army was yet to comply with the court ruling. Hassan and three other retired officers, namely Colonel Mohammed Suleiman, Colonel Chidi Ukoha, and Lieutenant Colonel Abdulfatai Mohammed, wrote a petition to the House of Representatives against the Nigerian Army, seeking the lawmakers help to get the army to comply with the court order.

Consequently, Chairman, House Committee on Public Petitions, Hon. Jerry Alagbaoso, wrote to the Nigerian Army demanding appearance and their brief on the matter.