2012 budget: CBN dares N’Assembly

Posted by admin CBN (Central Bank of Nigeria), House, Latest Politics, Legislature, Senate Monday, February 27th, 2012

The National Assembly and the Central Bank of Nigeria (CBN) may be on collision course over refusal of the apex bank to submit details of its 2012 budget for legislative scrutiny and approval. Rather than the full budget, CBN submitted a medium-term budget forecast for 2012-2015.

Daily Sun gathered that Appropriation Committees in both chambers are asking for the full budget which would include details of past and present expenditure profiles.
The lawmakers are pointing at the Nigeria National Petroleum Corporation (NNPC), which for the first time in it’s 35 years existence submitted its full budget for scrutiny.

“We didn’t ask for a budget forecast from the CBN. We will insist on a budget with details because the NNPC, which hitherto wasn’t bringing its budget to the National Assembly has already complied. That of the CBN cannot be different,” he said.
In the medium-term forecast, CBN said it spent N221.091 billion for 2011 with a projection of N242.053 billion for 2012.

Details from the 2012-2015 income budget forecast submitted to the National Assembly indicate that the nation’s apex bank hopes to spend N242.053 billion for this year while N211.906 billion would be spent on recurrent expenditure.

In a further breakdown of the 2012 forecast, CBN would earn N25.512 billion interest on foreign investments and another N24.9 billion interest on domestic investments.
Another N49.548 is being forecast as interest that would be earned on domestic loans and advances, while the sum of NN140.078 billion is simply tagged “other income.”
In the recurrent expenditure forecast, CBN staff of 6, 478 would earn N59.234 billion as salaries and wages plus allowances. “The expenditure estimates were based on the base year 2011 and anticipated review of emoluments in 2014.

“By 2014, staff salaries and wages plus allowances would climb to NN96.965 billion capping at N98.765 billion in 2015” while N87.847 is being budgeted for currency management and monetary policy operations, N24.816 billion is for capacity building and development expenses.
In the document under review, N2 billion is earmarked for “provision. In the explanatory note submitted to the National Assembly, provision is explained as “yearly estimates to cater for unforeseen contingencies which may arise at budget implementation.”

Senate refused to entertain an amendment bill of the CBN Act by the Chairman of the Senate Rules and Business Committee, Senator Ita Enang last week.
In the proposed amendment, Enang posited that the CBN has refused to comply with the Fiscal Responsibility Act of 2007, which mandates the apex bank to seek approval for its budget from the National Assembly every financial year.
Meanwhile, the CBN has blamed crisis in the Eurozone, inflation, and some financial insolvency as mitigating factors against its operations in 2011.
“The financial crisis in the international arena gives a challenge for predicting certain parametres for the budget forecast, especially on the income budget.

“These were characterized by the sovereign debt crisis in the Eurozone, the US deficit problem, inflation in emerging markets and financial solvency concerns.
The bank’s 2012-2015 medium-term budget framework is premised on the anticipated developments in the local and international economies and based on the expected level of activities, the direction of policies, practices and objectives of the bank.

-Sunwp_posts