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N’Assembly Set to Reduce Budget Benchmark Far below $38

08 Jan 2016
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National Assembly


Omololu Ogunmade in Abuja

The National Assembly is set to reduce the proposed oil benchmark by the executive for 2016 budget far below $38 per barrel in view of continuous fall in the prices of crude oil in global market.


This disclosure was made last night by Chairman, Senate Committee on Media and Public Affairs, Senator Sabi Abdullahi.
When the oil benchmark was first proposed in Medium Term and Expenditure Framework (MTEF), the price of crude oil in the international market was $40 per barrel. But a few days after, the price dropped to $36 per barrel.


Today the price is slightly below $33 per barrel, thus implying that the proposed budget is already running at a deficit of$5 per barrel if the $38 per barrel benchmark proposed by the federal government is anything to go by.


According to Sabi, the decision by both chambers of the National Assembly to reduce the benchmark is in observance of the current realities authored by the persistent rate at which oil prices continue to drop in the international market.


“We are going to be as realistic as possible by reviewing it in line with realities on ground as regards its proposed parameters like the oil price benchmark which today, is far lower than the projected figure of $38 per barrel in the international market.
“So what I want to assure you is that when we resume from recess, the budget will be a top priority and we are going to give it an expeditious attention.


“The issue of oil benchmark and exchange rate are issues that are dynamic and I’m sure by the time we come to deal with that, we will look at what the realities are and in tandem with the executive, I am sure we will come up with what we believe is realistic,” he said
Furthermore, he said the National Assembly would pay attention to critical issues such as revenue diversification.


He said: “What I want you to do is if you look at the budget, you see that we are giving more emphasis to non oil revenue and by the time we block the leakages and ensure value for money, we should be able to do those things that will add value to the economy.


“Remember the International Monetary Fund (IMF) boss was advising the financial sector to look at borrowing for the real sectors, agriculture, small and medium enterprises (SMEs) and the likes. These are the areas of growth and I want to assure that if we get it right in these particular sectors, I think our economy will be able to stay afloat.”


He noted that the Central Bank of Nigeria (CBN) had been effective in the management of foreign exchange.
“If you look at the forex market, today it will gain, tomorrow it will drop. So, these are dynamics that we are not sure of how they will play out but with the management of the forex, I want to believe that the CBN is doing a very great job.


“We should encourage them and give them the necessary support so that at the end of day, we will continue to do those things that are in the interest of Nigerians.”



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