president buhari
president buhari

Noticeable shortcoming recently raised by the Senate in the 2017, 2018 and 2019 Medium Term Expenditure Frame work, MTEF, and Fiscal Strategy Paper, FSP, currently under consideration in the National Assembly calls for serious concern. The MTEF, FSP documents, according to reports, contain unworkable economic assumptions that may affect the 2007 budget yet to be presented to the National Assembly. And the consequence being that Nigerians may face more economic hardship. The MTEF and FSP, as it were, provide the basis for annual budget planning. The documents consist of a macroeconomic framework that indicates fiscal targets and estimates revenues and expenditure, including government financial obligations in the medium term. The proposals also set out the underlying assumptions for these projections, provide an evaluation and analysis of the previous budget and present an overview of consolidated debt and potential fiscal risks. The MTEF and FSP produce a number of important outcomes, including the macroeconomic outlook, fiscal balance, and other key indicators. They fulfil a requirement of Section 11 of the Fiscal Responsibility Act, FRA, 2007, which stipulates that the Minister of Finance shall prepare the MTEF and FSP, and get them approved by the Federal Executive Council and National Assembly. But debate on the projected assumptions forwarded by the executive in the MTEF and FSP shows that the key economic assumptions are unrealistic, given the current economic realities in the country. According to most senators while debating the documents, indication shows visible flaws that could further stall consideration and worsen the already bad economic condition of the country. From senator to senator, majority who made their submissions suggested that the document be rejected and returned to the executive for a proper and rational presentation, because the assumptions are impracticable and fraudulent. For instance, during debate on the general principles, it was uncovered that the executive still made an over ambitious 2.2million barrel per day oil production benchmark for the fiscal period as against the current 1.6million barrel per day production ceiling. It also faulted the N290 to a US dollar against N305 to a dollar officially announced by the Central Bank governor few days ago. “The Central Bank of Nigeria has also announced that it is using N305 (to a dollar) while the oil price as well looks conservative,” said a senator. The list of the unworkable forecasts, accordingly, includes: 3.02 percent GDP growth rate for 2017, as opposed to -2.44 percent growth rates it is presently, from -2.06 percent it was during the second quarter as a result of recession. “GDP is going down and this MTEF document is telling me that it is going up: We should not be talking about deficit to GDP. In realistic term, we should be talking about deficit to revenue,” another senator pointed out during deliberation. However, coming against these far-reaching flaws in the documents,
it is commendable the Senate decided to clean up the mess and put everything in true perspective in line with current economic realities. This is going forward and really the right way to go, irrespective of where the mistakes emanated, whether from the executive, judiciary or otherwise. Indeed, going through the MTEF, FSP as currently presented, it looks very impracticable. It appears the executive arm did not take into account the bad state of the economy and the deepening recession while it has also exposed the president’s economic team as in disarray. For instance, the document still projected a 2.2mbpd oil production despite hostilities in the Niger Delta region, pretending as if all was well in the volatile area. Even in the current year, government did not achieve 2.2mbpd following conflict in the region and it also had never achieved 2.5mbpd in previous budgets in time of peace in the oil rich Niger Delta. How then realistic is 2.2mbpd next year? This is the question, although in truth, there is nothing absurd or wrong in being determined for a prosperous economic outlook for the country in years by, but growth in these unfriendly times should be analysed carefully and systematically. The country’s economic growth henceforth should progress steadily with sound and realistic fiscal and monetary policies that are in tandem with the country’s peculiarities and not foreign influenced and biased. This is our honest task to this administration. The Buhari government must stop this hush-hush approach in trying to solve every facet of the country’s life, especially the economy. It must look before it leaps. Away with the current manner through which the administration has plunged the country into economic Cul-de-sac. It is really worrisome that the MTEF and FSP which require inputs and approval of the lawmakers ahead of presentation and subsequent consideration of the 2017 budget estimates by the two chambers of the National Assembly could be so marred by unrealistic assumptions. This is yet another economic blunder of this government which may in turn delay budget works by the National Assembly and late assent by the president. While we acknowledge the patriotic position of the Senate in committing the documents to its Committees on Appropriation and Finance to rework in order to be more realistic, we call on this administration to be circumspect in its dealings on national issues, like the budget documents, MTEF and FSP, which are the economic life wire of any nation. Therefore, government must take time to do things properly and not the haphazard manner the MTEF and FSP have so been declared. Bad as it is, just a month to the end of another fiscal year, the country is still grappling with a faulty MTEF and FSP. This is unacceptable. If President Buhari must talk of integrity, he must show it in all facet of government life, including sending the right document at the appropriate time to parliament; this is the ideal thing to do and nothing more.

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