2017 Budget: Senate frustrates Buhari

 – President Muhammadu Buhari’s 2017 draft is unrealistic says the Nigerian Senate

– The Senate says there is need for improvement before the budget can be passed

– The current exchange will have a very big effect on the 2017 budget says the Senate

Nigerian lawmakers have said that assumptions about oil production and the currency exchange rate as regards Buahri’s 2017 budget darft, are very unrealistic.

The Nigerian Senate has spotted some unrealistic features in the 2017 budget draft by President Muhammadu Buhari.

The lawmakers made the assertion on Wednesday, November 22, Reuters reports.

Nigeria slid into recession in the second quarter for the first time in 25 years , largely because oil price fell. Crude oil sales account for 70 percent of government revenue.

The budget plans, which include spending a record 6.866 trillion naira ($22.57 billion) to pull Africa’s biggest economy out of recession, assume oil production of 2.2 million barrels a day and an exchange rate of 290 naira to the U.S. dollar.

The framework must be approved by the Senate before the final budget for next year is submitted.

“There’s no doubt that the assumptions are not realistic. Even in times of peace we cannot achieve 2.2 million barrels per day,”said Bukola Saraki, president of the Senate, the upper house of parliament.

“Our responsibility is to work on it and do the right thing,” he said, adding that the spending plans would be referred to Senate committees on finance, appropriation and national planning to be reworked.

It could be months before a final budget is passed into law. The 2016 budget became law in May after being delayed by several weeks due to wrangling between the government and the Senate.

Attacks on energy facilities in the Niger Delta cut crude production, which was 2.1 million barrels per day (bpd) at the start of 2016, by more than a third earlier this year.

But the oil minister earlier in November said production had returned to 2.1 million bpd following a ceasefire observed by many groups in the oil-producing region over the last few months.

The naira has fallen to 305 to the U.S. dollar since a peg holding it at 197 to the greenback was removed in June after 16 months. The currency has hit record lows against the dollar on the black market in the last few months.

Ahmed Lawal, a senator from the president’s All Progressives Congress (APC) party, said basing spending plans on an exchange rate of 290 naira to the dollar was “not real” and had a “serious effect on budget implementation”.

Figures released by the statistics office on Monday showed the recession had deepened with gross domestic product contracting by 2.24 percent year-on-year in the third quarter – worse than the 2.06 percent decline in the second quarter.