NASS Gets N465.7bn Supplementary Budget Proposal From PMB

The Senate yesterday received President Muhammadu Buhari’s request for the approval of a Supplementary Appropriation Bill of N465,636,926,857. In a letter addressed to the president of the Senate, President Buhari explained that the supplementary budget was designed to cater to the shortage caused by the dwindling price of crude oil upon which the 2015 budget was predicated.

He noted in the letter that the Supplementary Bill was premised on 2.2003 oil barrel production per day against the initial projection of 2.2782 barrels per day and $48 against the initial $53 per barrel as well as N190 per dollars for the exchange rate.

Buhari noted that the 2015 budget was predicated on the benchmark of $53 per barrel, foreign exchange of N190 to $1 and oil production of 2.2782 million barrels per day and requested for a downward review of the benchmark for the supplementary budget to $48 benchmark; foreign exchange remains N190 to a dollar while oil production volume had been reduced to 2.2003 million per day.
He explained that the deficit of N1.041 trillion or 1.09 per cent of the Gross Domestic Product was largely financed by domestic borrowing of N502.1 billion and foreign borrowing of N380 billion in the 2015 budget, put the total borrowing to N882. 12 billion.

The president added that with the supplementary budget, the deficit is now projected at N2.103 trillion or 2.19 per cent of GDP and would be financed by additional borrowing of N1.601 trillion through the debt management office.

President Buhari also requested for an upward review of borrowing from N882.12 billion proposed by former President Goodluck Jonathan to N1,601.09 trillion to make up for the shortfall in revenue.

The letter read in part, “Given this new level of expenditure and revenue constraint, the 2015 Budget which had a projected Fiscal Deficit of N1.041 trillion (or -1.09 per cent of GDP) with the deficit largely financed by Domestic Borrowing of N502.1 billion and Foreign Borrowing of N380.0 billion (total borrowing amounting to N882.12 billion), calls for additional borrowing.

“The expected deficit arising from the above is projected at N.103 trillion (or 2.19 per cent of GDP) to be financed by additional borrowing of N1.601 trillion the Debt Management Office.

“Accordingly, I deem it necessary to formally request the concurrence of the National Assembly to please consider and approve an upward review of the fiscal deficit from 1.09 percent of GDP to 2.19 per cent of GDP.

“An upward revision of the new borrowing from N882.1 billion to N2.103 trillion and new funding requirement to address security challenges and other important obligations in the sum of N465.64 billion.” (Leadership)