By Saminu Ibrahim
The Nigerian Senate onTuesday declared that downward review of the N10.59trillion 2020 Appropriation Act was inevitable, following coronavirus pandemic.
This comes as the upper legislative chamber considers to the possibility of the Devaluation of the Nigerian Naira in the face of its dwindling value arising from sharp drop in the price of crude oil in the international market.
These followed recommendations made to that effect by the Senate Joint Committee on Finance , Appropriation, National Planning and Petroleum ( upstream), mandated by the upper legislative chamber to look into the International Economic Situation resulting from the outbreak COVID-19.
Specifically, the joint committee in its recommendations as adopted by the Senate said going by realities on ground, downward review of the 2020 budget was inevitable since one of the major revenue sources ( oil price), has drastically gone down in the international market .
It would be recalled that oil price benchmark approved for the N10.59trillion 2020 budget was $57per barrel as against $30 to $31 per barrel it currently sells .
Indeed, the Committee did not directly recommend Devaluation of Naira as part of urgent economic measures to be taken by the federal government in curtailing the adverse effects of Coronavirus on the Nation’s economy but experts’ advice to that effect was also reflected.
The recommendations as adopted by the Senate reads : “Downward review of the 2020 Appropriation Act is inevitable but the modalities to be adopted in the reduction of the budget must be used as suggested by the Appropriation Chairman and agreed to by the Joint Committee.
“That the revenue generating agencies must be alive to their responsibility in line with the Fiscal Responsibility Act passed by the National Assembly and other relevant laws of the National Assembly
“That other issues affecting the oil sector such as cost of production of a barrel of Crude oil and any other matter should be taken care off by the expected Petroleum Industry Bill (PIB) .
“That the joint committee will Continue to engage the relevant agencies of the executive arm of government in keeping abreast of the fallouts of Coronavirus on global economy and in particular, that of Nigeria as regards implementation of the 2020 budget “
Aside the recommendations adopted as resolutions by the Senate, the Joint committee in the interim report read by its Chairman, Senator Solomon Olamilekan Adeola ( APC Lagos West), submitted that wide range discussions were held on the possibility of the need to prioritise both the Social and the Real Sector of the economy looking at their importance to the overall benefit of Nigeria.
“Block daily loss of revenues as a result of Gas flaring which runs into several billions of dollars; Devaluation of Naira, Removal of oil subsidy and other sundry issues.
In his remarks after adoption of recommendations of the joint committee , the President of the Senate , Ahmad Lawan said the country was no doubt in a challenging situation requiring policy makers and economy managers to think out of the box .
He said : “I think we are in a very challenging period but every challenge normally presents some opportunities. I think like Senator Odebiyi asserted that we should take our opportunities.
“The PIB we had expected by now would have been in the National Assembly but it is not. We had thought we would be able to pass the PIB within this year so that we are able to make our petroleum industry to have the legal framework that investors would find attractive to be here.
“Now that we know that it is difficult or even impossible to get the foreign loans that we had built our hopes and implementation of our capital budgets on, I think we have to be very ingenious as a country. We have to look inwards.
“The Central Bank of Nigeria has come up with some measures that are intended to support the economy. I think it requires a holistic approach, both fiscal as well as monetary policies and if need be, we pass a speedy legislations to create an environment where our economy does not collapse; that our economy is sustained with internal resources”.
