The federal government Wednesday said its earnings had declined by 40 per cent as a result of the drastic fall in oil prices, as well as the persistent attacks on oil installations in the Niger Delta.
Against this backdrop, it said the N6.06 trillion budget for this year will only be partially implemented.
Making this disclosure while appearing before the joint Senate Committee on Ethics, Privileges and Public Petitions, and Appropriation and Finance, the Secretary to the Government of the Federation (SGF), Mr. Babachir David Lawal, blamed the decline on activities of the militant group, the Niger Delta Avengers, which has claimed responsibility for the wave of attacks on oil installations in the oil-rich region.
The SGF had been summoned by the Senate on Tuesday to appear before the committee over a comment credited to him that the federal government would not implement constituency projects as provided in the 2016 budget.
Senator Mathew Uroghide (Edo South), who moved the motion while raising a point of order, said the comment implied a breach of the 2016 Appropriation Act and could also amount to an impeachable offence.
But Lawal explained that the oil benchmark of $38 per barrel set by the federal government in the 2016 budget had not been effective in view of the protracted attacks by militants on oil installations. He also disclosed that the nation sometimes produces as low as 800,000 barrels per day.
His disclosure, however, conflicted with the production figures that had been provided by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu and international news wires such as Reuters and Bloomberg, quoting oil traders, who had all said that Nigeria’s oil output had risen to 1.9 million barrels per day (bpd) after falling to a 20-year low of 1.4 million bpd.
When asked if he indeed said constituency projects would not be implemented this year, Lawal did not mince words, insisting that the problem was not exaggerated.
“The statement is correct. That is my statement. We cannot guarantee the implementation of constituency projects in the 2016 budget. As a government, constituency projects are championed by members of the National Assembly. Like the legislature, members of the executive are politicians who canvassed for votes.
“Lawmakers are aware that oil production has dwindled to about 800,000 barrels 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 said.
He added, however, that funds would only be released for the implementation of major projects this year, stating that the situation had forced the government to set new priorities for its policies.
“Government based its funding on zero budgeting this year. Funds will be released to finance key projects in line with the implementation plans of the government. I will explain why it will be hard for the government to implement the budget.
“I spoke with the Minister of Budget this morning (yesterday) and I asked him for the revenue base of the government. We are now receiving about 50 per cent to 60 per cent of earnings as against what we projected.
“Some ministries, department and agencies (MDAs) might find it impossible to implement projects appropriated in their budgets. We have to re-prioritise. I would like us to understand that this is the background upon which I made that statement,” he added.
Lawal said he knew that members of the National Assembly would find his disclosure offensive, but insisted that the truth needed to be told and further disclosed that MDAs were currently facing challenges in implementing their budgets in view of the little funds available to them.
Earlier, the SGF had engaged the senators in a hot exchange, complaining that he was given short notice to appear before the committee. He also criticised the tone of the letter, saying it threatened him and was written “in bad faith”.
“I only saw this letter this morning. I thought it was going to be Wednesday next week. I wanted my permanent secretary to write to request for another date, knowing that Wednesdays are for Federal Executive Council meetings. You gave me a very short time to prepare.
“Taking together the lateness of the letter and the threat at the bottom of it shows that it was not done in good faith. We should respect each other and give each other the time to appear,” he complained.
But his comment did not go down well with the committee, as its chairman, Senator Samuel Anyanwu, took exception to the choice of the words of the SGF and demanded for their immediate retraction.
“This is a joint committee meeting. Our committee days are usually Wednesdays. The Senate is expected to go on recess next week Wednesday and because of the urgency of the issue, we had to send the letter. We want that aspect of that your statement withdrawn.”
But Lawal hesitated, prompting the Chairman of the Finance Committee who was the co-chairman of the joint committee, Senator John Enoh, to echo Anyanwu demanding for the retraction of the statement.
Eno said: “We take exception to the words ‘bad faith’. The comments imply that the Senate committee, in extending an invitation to you, acted in bad faith. If we sent the letter to you in bad faith, it means you are also here in bad faith.”
Unperturbed by the position of the committee, the SGF claimed that he had a right to freedom of expression, arguing that he only withdrew the statement because he was forced to do so and not because he felt he did anything wrong.
“The freedom of expression is a right. While I excuse your position but I want you to note the threat in your letter. I want to put it on the record that you forced me to withdraw my statement,” he said.