Nigeria Content Online

The National
Assembly has increased the benchmark oil price for the 2011 budget from
the proposed $65 to $75 per barrel, as both the Senate and the House of
Representatives passed the appropriation bill.

Iyiola Omisore, the
Chairman of the Senate Committee on Appropriation, whose committee
reviewed the budget, said the increase was with the approval of the
Finance Minister, Olusegun Aganga. Crude oil prices are currently above
$100 per barrel, and Mr Omisore said the excess will be saved in the
Sovereign Wealth Fund in case of a shortfall. The budget is predicated
on crude oil production of 2.3 million barrels per day, Joint Venture
production of $5.4 billion, a GDP of 7 percent, and an exchange rate
pegged at N150 to $1. Habitually, almost every other item on the
expenditure column of the 2011 budget was increased.

The lawmakers
approved a budget of N4.971 trillion budgets for the 2011 fiscal year.
The budget is composed of N496.617 billion for statutory transfers,
N445.096 billion for debt service, N2.467 trillion for recurrent
(non-debt) expenditure, while the balance of N1.562 trillion was
approved for capital expenditure. The executives had proposed an
aggregate expenditure of N4.226 trillion, comprising N196.12 billion
for statutory transfers, N542.38 billion for debt service, N2.481
trillion for recurrent (non-debt) expenditure and N1.005 trillion for
capital expenditure.

Higher than expected

The 2011 budget is
N745 billion higher than that proposed by the executive. According to
Mr Omisore, the budget is at least N312 billion higher than the
proposed amount due to additional proposals sent in by the executives.
He said the increases were to cater for the rehabilitation of Niger
Delta militants under the government’s amnesty programme, the new
minimum wage and consolidated salary structure for Academic Staff Union
of Universities. The balance of N433 billion was due to requests for
extra funding and modifications that were carried out in the budget of
certain government agencies “due to re-prioritization of their spending
within the original ceilings.”

The passed budget contains a surge in the capital expenditure by
N557 billion. There is, however, no noticeable difference in the
overhead expenditure, which Senate President David Mark had threatened
to cut during the budget presentation ceremony in December last year.
The House of Representatives also passed the budget, as the lawmakers
announced plan to take a break to pursue their re-elections. Highlights
of the capital expenditure in the budget include N188.976 billion
budgeted for the works ministry, N99.071 billion for power, and N87.880
billion for the office of the National Security Adviser.