The Chairman, Senate committee on Environment and Ecology, Senator Bukola Saraki has observed that there was a lacuna in the 2014 budget which may hinder its effective implementation.
The Senate had on Wednesday, passed the 2014 appropriation Act.
Saraki in a statement he personally signed. And made available to Journalists in Ilorin said the appropriation Act did not consider a valuable indicator of the nation’s revenue base – oil production variation.
“Today at the plenary, the Senate considered and passed the 2014 Appropriation Act. During my contribution on the floor of the Senate on the consideration of the report, I drew the attention of the Senate to a lacuna in the budget, which I considered critical to the effective implementation of the budget. My intervention is simple.
“The Appropriation Act we passed today did not consider a valuable indicator of our revenue base- oil production variation. In other words, our national budget is predicated on oil production and price.
So much emphasis has however been placed on the bench marked price but little consideration on the production side. In recent times, we have witnessed massive fluctuations in the production level with production going down sharply and other times going up.
“We have seen production fluctuate from 2.1mbpd to 2.5mbpd and back to 1.8mbpd to 1.9mbpd all within two years. We have budgeted for on a baseline production figure of 2.5mbpd and ended up with 2.1mbpd average. All of these have impacted on the implementation of the budget significantly. This throws up a lacuna in the budget implementation process which now raises few questions. Some of
which are; what then happens if there is a significant drop in production?
What happens if there is a significant improvement in the production levels?
“While we may have set a benchmark on oil price (helpful as it may be), we have not set clear parameters on what happens with production fluctuations a key determinant of revenues. We cannot deal with one and not the other if we want a level of certainty and predictability in our budget. Implementation outcome is a key factor and a stepping stone to the next level”.