'Excess Oil Revenue to Fund 2005 Budget'
About 34 legislations to strengthen NEEDS underway
By Tayo Ajakaye and Crusoe Osagie
The Economic Adviser to the President and Chair-man National Planning Commission, Professor Ode Ojowu, has stated that the excess revenue from crude oil sales, which now totals about N271 billion, would be used to part finance the 2005 Budget.
Following rising crude oil prices to between $36 and $40 per barrel, the revenue outside of the $25 per barrel benchmark for the 2004 Budget was considered excess and saved in a special account with the Central Bank of Nigeria.
However there has been a disagreement between the Federal Government and the 36 states of the federation over what to do with the excess revenue. While the states wanted the money shared, the Federal Government insisted on saving it for a rainy day.
But Ojowu on a visit to THISDAY Corporate Head-quarters in Lagos yesterday explained that the 2005 Budget, which would be centred on the National Economic Empower-ment and Development Strategy (NEEDS), would be financed using the revenue from the excess crude account.
"The excess revenue from crude oil is going to be directed at next year's budget and next year's budget will be all about NEEDS. The budget will be to ensure the implementation of the NEEDS document," he said.
"The excess crude revenue would be used as part of the budget for next year and we are even saying that in order to wean off this oil thing, we are not going to ride on the wave of revenue from oil. We are going to consciously push part of it forward always," Ojowu added.
He said that rather than use the revenue arising from the difference between what was set for the budget and the international price to cushion consumption which could not be differentiated between the person who has and the person who doesn't have, it is better to use the excess revenue on infrastructure.
Stressing the commitment of the Obasanjo administration to the document which he said has received wider circulation and commentary than any other document of its kind in the country, Ojowu said that a committee has been set up to work out the framework for its implementation.
He also disclosed that to ensure that the objectives of the NEEDS and the State Economic Empowerment Development Strategy (SEEDS) programme are sustained, about 34 pieces of legislation covering major areas of the programme are in the works
"For sustainability of NEEDS-SEEDS, the programme is being supported by about 34 pieces of legislations covering such areas as fiscal responsibility at all levels of government, public sector reform, transparency and good governance, women and youth, environment, infrastructure, agriculture and industry," he said.
According to him, the NEEDS document needs to be backed by law so future governments can keep to its letter and spirit.
He said he expected for instance that a Procurement Act would take care of due process, which for now remains an administrative strategy, and is working well.
"I want to inform you that some progress is being made in the implementation of NEEDS and the reforms and development in infrastructure to support the implementation is in progress."
The Economic Adviser admitted that the more critical stage would be the implementation stage where there would be real-life experience as opposed to the formulation stage.
Ojowu explained that what the National Poverty Eradication Programme (NAPEP) has done is to take the very restive segment of the Nigerian population and attempt to focus on their lives as people who are too aggressive and too assertive to be left alone. 'This is like cutting out a piece that is likely to explode on you. That is my understanding of it," he added.
Declaring that deregulation has worked well, the Economic Adviser said that oil pricing is the outcome of deregulation, adding, "it is not itself deregulation. The fuel price is not increasing as a result of deregulation. With or without deregulation, the development in the oil sector would have led to price increases. The difference now is whether government is ready to put a cap on the domestic price while the price of crude is rising."
He stated that the issue of N25 billion capital base for banks cannot be left to market forces arguing that someone has to intervene. He said Nigeria cannot afford the fall of 11 banks for example. "So this teaming up exercise is for me, an important step in the right direction," he said.
Ojowu said it is wrong to always leave everything to market forces. "There are times in your life that somebody, which automatically means government, needs to take a firm decision. You cannot always say market forces, market forces."
He stressed that the refusal of an individual to recognize that market forces need to be developed and that they don't exist in a vacuum would mean that the person is a fundamentalist.
He said the government no longer supports loans that are not self-liquidating unless such loans are tied to projects capable of generating investments that are self-liquidating.
|
