Deregulation stalls 2010 budget presentation

From Taiwo Adisa, and Ayomide Owonibi - 03.11.2009

PLANS by the Presidency to deliver the 2010 budget to the National Assembly early enough have been hampered by moves to accommodate the deregulation of the downstream sector of the oil industry effectively from the next budget.

It was gathered, at the weekend, that technocrats in the administration have continued to tamper with the budget figures because they believed that deregulation would sail through and form the basis of the 2010 budget.
Organised labour and the government have been at loggerheads over the introduction of the deregulation policy.

The National Assembly had waited in vain throughout October for the new budget to be presented by the president.

Senate Leader, Teslim Folarin, who briefed newsmen in the Senate on September 28, had said that the Finance Minister would, that week, engage the leadership of the National assembly in informal discussions to fine-tune the budget.

He had also said that the budget was ready and that the long recess of the National Assembly had affected the planned interactions with the lawmakers.

The two chambers of the National Assembly had engaged the presidency in long drawn battles over the 2008 and 2009 budgets, and there had been attempts to reduce, if not eradicate, budget frictions. Folarin said that the informal meetings would ensure that the grey areas of the budget were resolved before it became a public document.

He said that the meetings were expected to be held in the last week of September and early October.

But no word was heard from the presidency all through October and the National Assembly was completely in the dark as to the state of the budget.
President Umaru Yar’Adua, however, sent the Medium-Term Expenditure Framework (MTEF) for the 2010 budget and then stopped at that.

Sources said, on Sunday, that the delay by the Presidency in getting a particular date for the presentation of the 2010 budget was occasioned by the feelers from the technocrats, who believe that the budget should be based on the planned deregulation exercise of the petroleum sector.

“We were ready to receive the 2010 budget and suddenly there was silence. We learnt from close quarters that the presidency was tinkering with the figures in line with the deregulation realities,” a source said on Sunday.

It was gathered that some of the figures contained in the original copy would change if the deregulation policy took effect.

But another source said that the presidency had, last week, secured a tentative November 19 date for the presentation of the budget.

It was learnt, however, that there was nothing concrete about the date, as it was just thrown up during a brief meeting.

It was also gathered, on Sunday, that the leadership of the Senate will, alongside the vice chairman and members of the Appropriation Committee of the Senate, monitor the new budget in the absence of the committee’s chairman, Senator Iyiola Omisore.

The source said that since appropriation was one of the most important assignments of the legislature, the chamber would collectively work on an acceptable budget for the country.

President Yar’Adua had, in September, presented the MTEF for the 2010 budget to the National Assembly, with the government admitting that there had been some unrealistic expectations from non-oil revenue sector in the 2009 budget.

It also said that the projections would affect the revenue forecasts for 2010.
The government announced through the MTEF that it intended to cut capital expenditure by as much as 16 per cent from N1, 022.26 in 2009 to N860 billion, while it projected an increase in such expenses to about 8.5 per cent in the next two years.

The president had also announced the intention of the government to further delay the implementation of the planned increase of Value Added Tax (VAT) from five to 10 per cent.

Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN), on Monday, said that the date for the deregulation of the downstream sector was not certain, adding that it was definitely going to be before the end of the year.

The spokesman for IPMAN, Alhaji Adebisi Bada, told the Nigerian Tribune that the current fuel scarcity, which hit Lagos and some other states, was due to the refusal of some marketers to sell the product because they were anticipating a November 1 take-off date for the proposed deregulation.

“The take-off date for the deregulation of the downstream sector is still not certain, but surely it would be before the end of the year. The current scarcity is simply caused by panic buying, and the refusal of some of the marketers to sell.”

The IPMAN spokesman, however, added that there was no disruption in supply, as they had been loading from the NNPC approved depots in Apapa, Nipco, Folawiyo and others.

But some of the marketers, said that there had been a shortfall in supply, because, under normal circumstances, they should be loading 200 to 300 trucks a day, but at the moment the number had reduced to 70 trucks per day, in the last three days.