Revenue Streams
2019 Budget Under Review Owing to Oil Price Crash – REPORTS
2019 Budget Under Review Owing to Oil Price Crash – REPORTS
Oil Price Crash Forces Review of 2019 Budget Benchmark Against the backdrop of a long and steady decline in the international oil price, the Federal Government may have started reviewing developments in the global oil market with the intention of adopting a new oil price benchmark for its 2019 budget. BY Emmanuel Ujah, Udeme Akpan and Victor Young
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Against the backdrop of a long and steady decline in the international oil price, the Federal Government may have started reviewing developments in the global oil market with the intention of adopting a new oil price benchmark for its 2019 budget.
This came as the decline appeared to have bottomed out, yesterday.
The N8.6 trillion budget was based on $60 per barrel (p/b) benchmark at a time international oil price was around $75p/b.
Though the price later escalated to about $86p/b, it began a downward trend about seven weeks ago closing at a year low of $59p/b last weekend. It, however, increased marginally to $61 as at yesterday, which is still a threat to the 2019 budget, especially as a gap of at least $10 is required between the budget benchmark and prevailing oil price.
Consequently, in an email to Vanguard on Sunday, Director-General of the Budget Office, Mr. Ben Akabueze, stated: “$60 oil price benchmark for 2019 was based on our review of projections from multiple sources by knowledgeable organisations on the subject of oil pricing. It was deemed quite conservative four months ago when we settled for $60.
“We are willing to review the price projection downwards if it becomes clear that it is no longer sustainable. An alternative benchmark will be determined, following same process explained above.”
But Vanguard oil price monitor indicated a significant positive shift in the oil price trend as the commodity traded above $60/pb, yesterday.
However, explaining further on challenges of Nigeria’s oil economy, Akabueze said: “Current oil production in Nigeria is about 2.1 million barrel per day, mbpd, still below the budget projection of 2.3 mbpd.
“OPEC production numbers do not include condensates whereas the number stated in the budget and NNPC’s reports include condensates. Nigeria has capacity to produce up to 450,000 bpd equivalent of condensates.
“Continuing diversification of the economy, domestication of raw/intermediate materials sourcing for manufacturing, formalization of the non-oil sector, as well as stronger focus on tax administration/legislation will ultimately break the dependence on oil for government revenues.”
Author : Eunice Johnson, Abuja
The Nigeria Labour Congress has endorsed the planned bill on monthly house rent in the Federal Capital Territory introduced by the Senator representing Kogi West District, Smart Adeyemi.
The bill titled, ‘Advanced Rent (Residential Apartments, Office Spaces, etc.) Regulation Bill 2022,’ has gone through first reading at the Senate. It provides for a maximum of three months’ advance rent payment in the first instance and subsequent monthly payment for the rest of any tenancy lease in the FCT.
The NLC President, Ayuba Wabba, in a statement on Thursday, said the bill was in tandem with the rent regime in most parts of the world, including South Africa and Kenya.
The statement was titled, ‘The Nigeria Labour Congress throws its full weight behind the bill on monthly house rent in the FCT.
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The Kaduna state commissioner of budget and planning commission, alhaji Mohammed Sani Abdullahi, said the state is targeting n150bn as internally generated revenue in the next two years. The commissioner also said this could be achieved by expanding the revenue base without increasing tax in the state.
Abdullahi stated this in an interactive session with newsmen shortly after the state governor, malam nasir el-rufai, signed into law the state’s 2022 budget of n278.58bn at the sir kashim ibrahim government house, Kaduna.
The signed budget allocated n184.53bn to capital expenditure while n94.05bn to recurrent on a ratio of 66:37. Abdullahi noted that with 25 percent of the entire budget, education is getting the lion share while the health sector got 14 percent.
The commissioner also stated that the urban renewal projects in Kaduna, Zaria and kafanchan and other infrastructural projects were slated for completion in 2022. This is just as he disclosed that the state would be launching a social investment programme with over n4 billion provided for the vulnerable people across the 23 local government areas of the state.
This, the commissioner further stated, was to enable the government to intervene directly in the life of the people across the rural areas.
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Revenue Streams
Communication Ministry Gives Zero Allocation to Nipost Out of N137.2billion Capital Votes
Nigeria Postal Service ( NIPOST) , got zero allocation from N137.2billion capital votes earmarked for the Ministry of Communication and Digital Economy as well as the three Parastatals under it .
While in the proposed N160.593billion budget for the Ministry, NIGCOMSAT, NIPOST and National Identity Management Commission (NIMC), the Ministry got N85.231billion for capital votes, NIMC N46.533billion and NIGCOMSAT N5.440billion, NIPOST has zero allocation.
This was made known by the joint committee of the National Assembly on Communication during budget defense session with the Minister of Communication and Digital Economy, Dr Isa Ali Pantami and heads of agencies under the Ministry at the National Assembly on Thursday.
The Committee Chaired by Senator Oluremi Tinubu expressed dissatisfaction with the development sating it was wrong for the agency not to be given any capital vote for 2022 fiscal year. Senator Tinubu specifically asked the Minister whether the zero capital budget allocation proposed for NIPOST in 2022 was based on non – request by the agency or lack of fund.
The Committee she added, may have to appropriate something for the agency if there is no solid reason for the zero allocation. The Minister in his response said, he was not against some votes taken from the capital estimates of the Ministry for NIPOST.
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