Date: 2014-11-20

Less than three weeks ago, former Kwara governor and current chairman of the senate committee on environment, Bukola Saraki, wrote an opinion piece in which he argued that using an oil benchmark of $78/barrel for the 2015 budget as the federal government proposed to do was unrealistic.

Saraki wrote in the piece that: "The current position to put the benchmark for oil price at $78 is inconsistent… This Minister Of Finance/Executive position is hard to justify on any economic modelling or recent policy positions. One is left with the impression that this benchmark is not a product of any economic model but a political induced decision that does not paint the correct picture nor aligns itself to the 2015 forecast. So government should go back and come up with a realistic benchmark, which in my view cannot be above the lower 70's."

President Jonathan and his economic team may have seen wisdom in Sen. Saraki's position as the president on Wednesday cut the proposed oil benchmark from $78 to $73 per barrel. He also cut the 2015 budget by N63billion, from N4.817 trillion to N4.661trillion.

The Federal Government also reviewed its proposed exchange rate upwards from N160 to N162 to $1.

The price of oil at the international market has since crashed from over $100 per barrel to less than $80 per barrel.

Jonathan's letter entitled: "Submission of revised 2015-2017 Medium Term Expenditure Framework," was read by the Senate President, David Mark, at plenary.

The letter reads in part: "As you may recall, I had transmitted the 2015-2017 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) to the National Assembly for consideration and approval.

"However, recent developments in the international oil market have necessitated that the MTEF be revised.

"Consequently, following further consultations with key stakeholders, adjustments have been made to some of the key parameters as well as to some fiscal estimates in the MTEF."

Jonathan, however, expressed optimism that the MTEF/FSP would be expeditiously considered to bring the 2015 budget preparation to a quick close.

Jonathan said: "I hereby forward copies of the reversed 2015-2017 MTEF to the National Assembly. I hope that it will receive your usual kind expeditious consideration in order to bring the 2015 FGN budget preparation process to a quick closure."

The government also projected N4.733.21 trillion and N4.930.29 trillion as expenditure for 2016 and 2017 respectively