..Retains $60 crude oil price, N305/$1 exchange rate, 50-50 domestic,
external borrowing
…enforcement of Executive Orders
KEHINDE AKINTOLA
Whopping sum of N1.361 trillion (52% implementation level) has so far
been released by Federal Government for the implementation of the
capital projects through various ministries, departments and agencies
(MDAs) as at the end of first quarter of 2019.
Key assumptions in the 2019 budget proposal showed that 2.3mbpd pil
production; $60 per barrel; 9.98 percent inflation rate; N119.28
trillion nominal consumption; N139.65 trillion; N139.65 trillion as
nominal GDP and 3.1 percent GDP rate.
Udo Udoma, Minister of Budget and National Planning who disclosed this
on Wednesday held at the instance of the joint Senate and House of
Representatives Committee on Appropriations, unveiled Federal
Government’s resolve towards anti-corruption policies, block leakages
and improve revenue collection.
In the bid to meet its proposed revenue targets, Udoma explained that
economic indices over the past 12 months was positive, as affirmed by
the report of National Bureau of Statistics which puts the economic
growth at 2.38% in Q4 and 1.93% for the 2019 fiscal year.
While noting that the proposed $60 oil price was within current oil
price at the international market, he however noted that President
Muhammadu Buhari has directed Nigerian National Petroleum Corporation
(NNPC) to keep monitoring the oil price at the international market in
order to keep tab on the fluctuations.
He expressed optimism that Nigeria has the capacity to meet the
2.3mbpd projection, and 2.5mbpd through effective exploration of
condensate which is not within the OPEC regulation.
According to him, efforts are underway to use the proceed of the oil
revenue for diversification of other sectors such as agriculture,
health, education, alternative energy, among others, stressing that
the proceeds from oil may not be sustainable in the next 20 years.
On the expenditure, Udoma explained that Federal Government spending,
excluding loans was pegged at N8.83 trillion for 2019 fiscal year,
less than 9.1 trillion for preceding year, in order to keep the level
of borrowing at financeable level and reduce budget deficit.
He disclosed that the sum of N3.12 trillion (representing 30 percent
of the total budget) was proposed for capital projects, adding that
efforts are being put in place to avoid duplications, waste, stop
abandoned projects, and ensure completion of ongoing developmental
projects.
According to him, various initiatives being considered to drive
revenue in 2019 include:
On the plan to return the nation’s budget cycle to January-December,
the Minister expressed optimism that effective cooperation and
collaboration between the Executive and Legislature remains critical
to achieve the feat, rather than legislation, adding that: “2019 is
the year we should be able to achieve it. The President is determined
to do it,” Udoma assured.
He observed that the politicking and campaigns for the 2019 general
elections contributed to the inability of the present administration
to achieve it in 2018.
On her part, Aisha Usman, Minister of Finance affirmed that the level
of budget performance for 2018 was not a very bad one, considering the
financial constraint.
According to her, some of the strategies mapped out to drive revenue
include: sustainable revenue generation, improve collection, block
leakages, identify new revenue streams, introduction of new taxes,
strategic investment that will spur revenue growth, broaden Value
Added Tax (VAT), funding models for specific sectors, deployment of
single window through Nigeria Custom Services, working with National
Assembly on amendment of extant establishment Act of MDAs as well as
enforcement of Executive Orders.
To achieve the feat, she reiterated the resolve of the administration
towards improving the capacity of key revenue generating agencies such
as Federal Inland Revenue Service (FIRS), Central Bank of Nigeria
(CBN), NNPC, Accountant General of the Federation, Nigeria Custom
Services, Federal Ministry of Finance, among others.
In the bid to fiancé the budget deficit, Usman disclosed plans to
adopt 50-50 domestic and external borrowing plan ratio and improve on
local borrowing of longer tenure of 30 years bond in synergy with
Insurance companies at lower cost.
While acknowledging the successes recorded through the issuance of
Sukuk bond, he disclosed plans to issue the third tranche as well as
Green Bond, while opting for concessionary loan with longer tenure as
well as issuance of Eurobond (commercial).
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