Search Site: OnlineNigeria


FG proposes N136bn supplementary budget

Posted by By Senan John Murray and Sam Akpe, Abuja on 2006/08/29 | Views: 550 |

FG proposes N136bn supplementary budget

President Olusegun Obasanjo on Tuesday requested the Senate to approve a supplementary budget of N136.01bn.

President Olusegun Obasanjo on Tuesday requested the Senate to approve a supplementary budget of N136.01bn.

The amount is to cover the Federal Government‘s recent expenditure on some unspecified power sector projects and the additional two days of the national population census.

The President also requested the Senate to approve the withdrawal of N600bn from the Excess Crude Sales Account to make up for an unforeseen shortfall in the 2006 Appropriation Act as a result of the recent instability in the Niger Delta.

”This is borne out of my concern to ensure that Budget 2006 is fully implemented at all levels of government,” Obasanjo said in a letter requesting funds to bridge “revenue shortfall” in this year’s budget.

However, the money requested in the supplementary budget has already been spent, an action that runs contrary to normal appropriation procedures where funds are first appropriated by the National Assembly before they are spent.

Following an exclusive report last April in which The Punch exposed some questionable withdrawals from the Excess Crude Sales Account, Obasanjo wrote to the National Assembly explaining that the withdrawals were made to fund some key projects under the Federal Government‘s Power Sector Development Plan.

The Appropriation and Finance Committees of the senate are currently investigating the withdrawals which they considered “illegal.”

The supplementary budget might be Obasanjo‘s attempt to undermine the investigation by rendering it irrelevant through a supplementary budget approval.

In the new supplementary bill, Obasanjo is asking the Senate to appropriate N134bn for ”payment for power sector projects in Nigeria” and another N2.22bn for funding of ”additional two days of the national population census 2006.”

Obasanjo‘s letter to the senate on the oil sales shortfall reads:

”Distinguished Senate President, you may wish to recall that in crafting Budget 2006, oil production of 2.5mbd was used at a price of US$35 per barrel.

”Immediately the budget was passed, the problem in Niger Delta assumed a different dimension resulting in oil production shortfall of about 600,000 barrels per day. Currently, we are producing about 2.00mbd, which has significant negative variance on oil revenue. This is, therefore, affecting the full implementation of the Federal Budget and the states and local government budgets as well.

”I, therefore, wish to seek the understanding of the senate to make up for the shortfall of estimated N600bn for the federal budget from excess crude proceeds. Each tier of government will get its proportionate share. This is borne out of my concern to ensure that Budget 2006 is fully implemented at all levels of government.”

Meanwhile, the Senate‘s investigation into the alleged illegal withdrawals by the Federal Government from the Excess Crude Sales Account for Paris Club debt payment resumed on Tuesday with the Minister of Finance, Mrs Nenadi Usman, and Central Bank of Nigeria‘s Deputy Governor (Operations), Mr Shamsudeen Usman, testifying.

Usman explained that although the withdrawals were not sanctioned by the National Assembly, as required by the Constitution, Obasanjo had, however, written the leadership of both chambers of the legislature to explain the need for the withdrawals.

She said on the strength of the president‘s letter and the consent he received from the National Assembly ”and other stakeholders,” her ministry had gone ahead to order the withdrawal of the funds from the Excess Crude Account operated by the federal government with the CBN.

On his part, the CBN deputy governor said it was not the bank‘s business what the federal government sought to do with the funds as ”our business is to release funds to their depositors after confirming the signatory‘s details.

”We were not told what the money was going to be used for and we didn‘t ask because it was not our brief. We were satisfied that the request for release of the money was in order and duly authorised and so we released the money.”

The finance minister, however, admitted to the senate committees that local government chairmen - who are also beneficiaries of the federation account from which an excess crude account was created - were not consulted before the withdrawals, which should have been part of their statutory allocations, were made.

On the controversial one per cent charged by the CBN on the Paris Club debt transaction, the banks deputy governor told the committee that it was standard operational procedure for the CBN to charge its customers handling fees.

”In this case, we treated the federal government like any other customer and so we charged our normal operational charges, which came up to one per cent for the kind of transaction we handled for the federal government in the Paris Club debt transaction.

”It is, however, also true that the president also wrote to us, requesting that we reduce our handling charges to .25 per cent which came to about $30m instead of the $121m that would been paid on one per cent.”

Printer Friendly Version

Read Full Story Here.... :
Leave Comment Here :

Add Comment

* Required information
Captcha Image

Comments (3)

Okfold(Sobe, Edo, Nigeria)says...

I want the meaning of female owan name Ekeke (Edo state)

Toluwalase Samuel Olufemi(Ijebu, Ogun, Nigeria)says...

Authority belongs to God, once He decrees it is final and binding

Ikponmwosa Osamede(Edo, Nigeria)says...

Your meaning of Osamede is wrong. Osamede means God has given me a crown