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Senate passes N574.532bn supplementary budget with 91 per cent for subsidy payment


Senate passes N574.532bn supplementary budget with 91 per cent for subsidy payment

Nigeria’s senate yesterday passed the 2015 Supplementary Appropriation Bill of N574,532,726,857 billion out of which N521 billion (91 per cent) would be used for the payment of subsidy claims by oil marketers.

The amount passed is N108, 895,800,000 higher than N465,636,926,857 billion submitted by President Muhammadu Buhari to the National Assembly for consideration and approval. The extra was included by the senate as additional fund to pay fuel subsidy claims from October to December 2015, which were not included in the budget sent by Pres. Muhammadu Buhari.

The huge subsidy expense raises questions about the sustainability of the subsidy program which continues to gulp scarce resources whereas only few Nigerians enjoy the product at the approved rate.

A breakdown shows that the sum of N120billion was provided in the supplementary budget as arrears of fuel subsidy claims (carry over) from last year while the sum of N292 billion was provided for payment of claims of subsidy for January to September 2015.

As indicated in the amendment to the 2015 Fiscal Framework, the Supplementary Budget is to be funded through borrowing.

Before endorsing the Supplementary Budget for implementation by the Executive, the Senate went into a lengthy closed session to discuss and agree on the modalities to pass the fiscal document.

The Senate had on November read for the first time 2015 Supplementary Appropriation Bill in the sum of N465,636,926,857 billion submitted to it by President Buhari.

Chairman, Senate Committee on Appropriation, Senator Mohammed Danjuma Goje who presented the report of his committee for consideration and approval said the bill fundamentally sought to among other things, make available additional funds for the fight against insurgency in the Northeast and payment of outstanding subsidy claims in order to ameliorate the suffering of Nigerians.

Goje noted that the provision for subsidy only covered last year’s arrears of N120.5 billion and the claims of January-September of N292 billion.

He stressed the need to provide additional funding in the sum of N108,895,800,000 only for fuel subsidy for the months of October, November and December “to ensure that the 2016 budget takes off on a clean slate.”

He said the issue of the additional subsidy claims came up in the course of clarification of the total subsidy need for the year ending 2015, by the Permanent Secretary, Ministry of Petroleum Resources.

Goje said the provision for Victim Support Fund (N5billion) in the Capital Supplementary should have been made in the Service Wide Vote since it is a Federal Government contribution to a fund managed by a Committee which is neither a minsitry, department or agency (MDA) of government.

He also stressed the need to adjust the proposed amendment to the 2015 Fiscal Framework to capture the additional funding need of N108.895billion for fuel subsidy.

The committee chair said: “With the Supplementary Bill, including the additional funding need of fuel subsidy, the total aggregate expenditure for the fiscal year 2015 will be the sum of N4,493,363,957,158 in the 2015 Appropriation Act, the proposed sum of N465,636,926,857 and the additional funding need of N108,895,800,000 for fuel subsidy amounting to N5,067,896,684,015 trillion.

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