OrderPaperToday – After much delay and pillorying of the documents as empty, the Senate on Wednesday passed the 2017-2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
In passing both documents, the red chamber however retained the exchange rate of N305 to $1 as proposed by the Executive in a revised submission but raised the proposed oil benchmark of $42.50 in 2017 budget to $44.5 per barrel.
The senate also retained 2.2 million barrel per day oil production volume, observing that the projection is achievable if the federal government makes concerted efforts to stem the tide of militancy in the Niger Delta.
The upper chamber also recommended the approval of the federal government’s borrowing plan of N2.321 trillion, made up of N1.253 trillion as domestic borrowing and N1.067 trillion external borrowing.
It also approved government independent revenue projection of N807.57 billion as contained in the revised MTEF and FSP just as it approved the projected N5.122 trillion non-oil revenue in 2017.
It however, tasked the revenue collection agencies to “intensify their revenue collections drive to boost the non-oil components of the revenue.”
Senate decisions followed the adoption of the recommendation of its Joint Senate Committees on Finance, Appropriation and National Planning on the documents.
Presenting the report, the joint committee chairman, Senator John Enoh (PDP, Cross River), observed that the huge gap between the official exchange rate and what obtains in the parallel market had created what he described as several loopholes in the system.
He, however, commended the recent migration from fixed exchange rate regime and flexible exchange rate regime but tasked the Central Bank of Nigeria (CBN) to put in place measures to close the gap between parallel market and the official exchange rate.
According to the report, there has been a noticeable improvement in the global demand for crude oil noting that “a weaker US dollar and improving sentiment on broader financial markets have also boosted crude oil price.”
The committee rationalized its decision to raise the oil benchmark on the fact that international oil industry watchers have forecast that oil prices are gradually heading towards $60 billion.
The report recalled that disruption of oil installations in the region resulted in fluctuations in oil production in 2016, pointing out that production dropped from 1.912 million barrel per day in January 2016 to 1.721 million barrel per day in June before later declining to 1.721 million per day in October.