Oil price fall drives federal government revenues down 50%

0
261

14 JULY 2016-Federal Government said on Wednesday that its revenues had dropped by 50 percent to 60 percent. This comes as it disclosed that daily crude oil production had dropped to 1.7 million barrels per day.

The N6.06 trillion 2016 budget passed by the National Assembly was predicated on a production estimate of 2.2 million barrels per day, exchange rate of N197 to $1 and oil benchmark price of $38 to a barrel. The Appropriation Act also had a revenue projection of N3.86 trillion.

The government attributed the drop in revenue to attacks on oil installations by militants in the oil-rich Niger Delta, even as it admitted that it could not fully implement the N6.06 trillion 2016 budget.‎

Secretary to the Government of the Federation (SGF), Babachir Lawal, gave the revelations when he appeared before a joint Senate Committee on Ethics, Privileges and Public Petitions; Appropriation and Finance, to defend his comments that the Federal Government may not implement constituency projects in the 2016 budget.

Lawal said the oil benchmark of the Federal Government had been grossly affected by activities of militants, saying that at a time the country was producing about 800,000 barrels per day.

“Lawmakers are aware that oil barrels had dwindled to about 800,000 per day. This has led to the inability of government to finance the budget. It is the duty of government to prepare the minds of Nigerians ahead that there will be challenges in implementing the budget,” he told members of the joint committee.

Niger Delta Avengers (NDA), which publicly announced its existence in March 2016, have attacked oil producing facilities in Niger Delta, causing the shutdown of oil terminals and a fall in Nigeria’s oil production to its lowest level in 20 years.

The attacks caused Nigeria to fall behind Angola as Africa’s largest oil producer. “I spoke with the minister of budget this morning (yesterday) and I asked him the revenue base of the government. We are now receiving about 50 percent to 60 percent earnings from what we projected,” Lawal said.

Asked whether he declared that the N100 billion constituency projects would not be implement, the SGF said: “The statement is correct. We cannot guarantee the implementation of constituency projects in the 2016 budget.

“Government based its principle on zero budgeting this year. Funds will be released to finance key projects in line with the implementation plans of the government.”

According to Lawal, “Some Ministries, Department and Agencies (MDAs) might find it impossible to implement projects appropriated in their budgets. We have to re-prioritise.

The Federal government scribe further stated that while he knew that statement might not be palatable to the legislature or the citizens, MDAs are facing similar challenges in implementing the budget based on the funds available to them.‎

Earlier, during his introductory remarks, the SGF had an altercation with lawmakers where he expressed dissatisfaction with some aspects of the letter of invitation sent to him, claiming that he was being threatened.

Recall that the Senate, had on Tuesday, summoned the SGF to appear before its joint committees, following a motion moved by Matthew Urhoghide (PDP, Edo South), criticizing the Federal Government over alleged plans to selectively implement constituency projects of National Assembly members in the 2016 budget.

DCSL 90X780

LEAVE A REPLY