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An attempt by the
senate to debate a request from President Goodluck Jonathan for a
downward review of the 2010 budget suffered a glitch yesterday as the
senators could not debate the bill over disagreement on its content.

The senate, on
Tuesday failed to deliberate on both the budget cut and the
accompanying supplementary budget request due to some concerns on the
bill which could not be resolved before the plenary. Deputy senate
leader, Victor Ndoma-Egba, who made the withdrawal request before the
senate, said the bills had “some concerns” which are yet to be
resolved. He, however, did not say what the concerns were. But sources
within the senate said they were not yet fully satisfied with the
planned deductions from some affected sectors. Mr Jonathan had, earlier
this month, urged the National Assembly to legalize a downward review
of the 2010 budget in the face of dwindling government revenue.
Discussions on the proposals may, however, continue today.

Slashing federal spending

The budget review
will slash federal expenditure and reduce the oil price benchmark by at
least $10. Part of the president’s recommendation to the lawmakers is
the reduction of the oil benchmark price, initially increased by the
lawmakers to $67, back to its original $57 per barrel. In a letter to
the lawmakers, dated May 29, 2010, Mr. Jonathan affirmed his earlier
position that the N4.6086 billion budget which he signed into law in
April 2010 was no longer feasible in the light of current economic
realities of the nation.

“Recent revenue
developments indicate significant shortfalls in both oil and non-oil
revenue, which may well continue for the rest of the fiscal year, with
adverse implications for the financing of the budget,” Mr Jonathan said
in the letter. “Given the recent drop in international oil prices from
the over $80 per barrel to under $70 per barrel, it is prudent to
revise the oil benchmark price to a more realistic level.” However, the
letter sent by Mr. Jonathan refused to name his preferred figures for
either the oil price or the total reduction in the budget. He, however,
is said to have called for a total reduction of 40% in the budget.

Supplementary bill

The president also
requested for fresh appropriation for “critical expenditure heads that
were either inadvertently omitted or under provisioned for.”
Accompanying the 2010 budget cut proposal is an additional
supplementary budget proposal to authorize the executive to access some
N639.8 billion from the Consolidated Revenue Fund. The bulk of the
supplementary budget, about N507 billion, is for recurrent expenditure
while the balance of N132.6 billion is for contribution to the
Development Fund for additional capital expenditure.

A large chunk of the N507 billion set aside for the recurrent
expenditure will be shared amongst the office of the Secretary to the
Government of the Federation, Foreign Affairs Ministry, Information and
Communication Ministry, and the Ministry of Women Affairs to be used
for Nigeria at 50 celebration in October. The balance is intended to
apply to outstanding allowances of various government agencies.