Experts have commended the decison to raise the oil benchmark from $45 to $51 per barrel for the 2018 budget passed on Wednesday by the National Assembly, more than six months after it was presented.
The National Assembly passed the 2018 Appropriation Bill of N9.12 trillion, raised from the N8.61 trillion proposed by President Muhammadu Buhari on November 7, 2017.
The budget expenditure was premised on oil price benchmark of 51 dollars per barrel as against 45 dollars proposed by the President.
Crude oil production was bench-marked at 2.3 million barrels per day and exchange rate of N305 to one dollar.
Acting Chairman Fiscal Responsibility Commission (FRC) Mr Victor Muruako, described the passge of the bill as “a relief to the nation.”
Muruako said it would also bring hope to the populace and boost the economy.
He described the crude oil benchmark at 51 dollars per barrel as the right thing to do, considering the current price of crude oil globally which yesterday hit the $80 threshold, the first time since 2014.
“The crude oil price benchmark is very realistic because if you look at the current crude oil price you will see that 51 dollars is fair enough, because the essence of these things is not to have an unrealistic estimate.
“Crude is going for 78 to 80 dollars per barrel and I think 51 dollars is even conservative but it is better to be on the safe side, so for me it is a commendable effort,” Muruako said.
He also said the increase in the budget estimate by the National Assembly by N508 billion was in the interest of the country.
The Lagos Chamber of Commerce and Industry (LCCI) also commended the oil benchmark.
The Director-General of LCCI Muda Yusuf, said: “Given the development in the crude oil market, which has pushed oil price to about $80 per barrel, I think the decision of the National Assembly to increase the benchmark is understandable.
“If the increase is in the areas that would make impact, particularly in the areas of infrastructure, security and health, it is welcome.
“As at the time the budget was presented to the National Assembly, oil price was below $50 per barrel, so the adjustment is laudable,” he said.
Yusuf urged the Federal Government to guard against a future recurrence of the budget delay process, adding that the delay might affect timelines for the delivery of capital projects and create uncertainties in the economy.
“It is becoming a culture that we always have budget delays, which I do not think is good for our economy,” he said.
President of the Chartered Institute of Bankers of Nigeria (CIBN) Prof. Segun Ajibola, describd the provision of N2.8 trillion for capital expenditure in the Budget as low.
Ajibola in an interview with the News Agency of Nigeria (NAN) said: “Looking at the provision for the capital expenditure, one will say it is low because there are lots to be done in economy today in terms of capital projects.
“In terms of infrastructure, we have power projects, railway, refineries, manufacturing and agriculture projects.
“These are capital related projects that require substantial allocation from the budget.
“When one looks at the state of economy today, one will say the provision of capital expenditure is low,’’ he said.
Ajibola, however, called for timely release of funds to implement the capital projects.
“We are in May now; we don’t want to hear that funds are not released for capital projects in October.
“If that is the case, that means nothing can be achieved in the implementation of the 2018 budget,’’ the don said.
“They are projects-hiked adjustment; they are adjustment that can be measured.
“Also, I want you to know that the implementation of budget is done by the executive not the legislature, so the President will still do some consultations before signing the Budget.’’
The don assured that the country’s rising debt profile of N21.7 trillion was nothing to worry about, though on the high side.
He said it was not much to worry about because the quality of the debt was spent on projects so that the dividend of borrowing would come handy to an average Nigerian.
“We also know that some of the debts are transmitted from local to foreign through Euro bond to reduce the debt burden.
“It is also a good development when you look at the budget and debt services; we can say that the debt is channeled toward development,’’ Ajibola said.
