By Etuka Sunday
The Federal Government yesterday said it has spent the total sum of N3.39trillion within the first six months of this year to finance the 2019 budget.
The Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed, disclosed this during a public presentation of the 2020 budget in Abuja.
She said when compared to the pro-rated amount of N4.58tillion that should have been released during the six months period, the N3.39tillion represents a performance of 76 per cent.
“Of the total appropriation of N8.92tillion, N3.39trillion had been spent by 30th June 2019 against the prorated expenditure budget of N4.58trillion.
“This represents 76 per cent performance. Debt service and the implementation of non-debt recurrent expenditure, notably, payment of workers’ salaries and pensions, are on track.
“Capital releases did not commence in the first year of 2019 budget because the budget was passed into law on the 27th of May. Also, there were no ministers so releases did not start until late July and as at the last week of September, we have scheduled releases that are up to N650billion and we have a 900billion target by the end of November,” she said.
The Minister said, as at 30th September 2019 a total of about N294.63billion had been released for capital projects.
According to her, spending on capital had been prioritized in favour of critical ongoing infrastructural projects in the power, roads, rail and agriculture sectors.
She said, the federal government is set to boost the revenue base of the country by implementing new taxes to meet targeted revenue of 15% to Gross Domestic Product (GDP).
She said Nigeria cannot dwell on the current revenue it generates as it will not match the recurrent expenditure targets of her workforce.
“On the emergency need to grow our revenues, the ministry of Finance, Budget and National Planning designed and launched a Strategic Revenue Growth Initiatives (SRGI) which is focused on boosting revenue generation for the country to meet it’s revenue to GDP of 15% as set in the Economic Growth and Recovery Plan which is supposed to be attained by 2020.
“However, but we are just at 8% and we need to do more on that which is why we have shifted the goal to 2023 and looking at what we must do to increase revenue.
“The Initiative is planned in three thematic areas which is to achieve sustainability in revenue generation, identify new and enhanced revenue areas and which is why we’ll be looking at implementing new taxes in addition with the one the Federal Inland Revenue Service collects so as to broaden the tax base and enhance growth, and finally implementing a model that advances collaboration with agencies, use of data, synergies that spur growth,” she explained
She also maintained that there is a designed monitoring and evaluation process to ensure the targets are attained and appealed to investors and the organized private sector to key into Nigeria’s investments to solve revenue challenges.
Asked if the federal government still pays for subsidy, the minister affirmed that “N450billion has been budgeted for the under-recovery which is a fiscal framework for funding the operational cost of the Nigerian National Petroleum Corporation,”
According to her the money was included in the proposed budget because it captures the cost incurred by the NNPC.
The minister said the key assumptions of the 2020 budget is premised on careful planning and due consultations.
“The 2020 budget is set on the target of 2.18mbpd oil production, the crude oil is set at 67$ per barrel as approved by the national assembly, and exchange rate remains at N305 per dollar and inflation rate of 10.8% and GDP growth of 2.93 respectively.
“The reason for the assumptions is that oil production volume is 2.18mbpd shows a decline from the 2.3mbpd in the 2019 budget because of tensions in Iran and uncertainties around Brexit. The federal government has a recurrent expenditure of N10.33trillion which includes recurrent non-debt spending of 4.88trillion which shows increases in salaries and pensions, provisions for the implementation of the new minimum wage, capital expenditure of N2.14trillion, N2.45trillion of debt services 23% of total expenditure.
“There is also provision for maturing bonds, oil revenue N2.64trillion and a budget deficit 2.17trillion and represents 1.5% of the GDP, stipulated at 3% to GDP and it is to financed by borrowing of N1.69trillion from domestic and foreign sources, domestic borrowing is 744.99billion while foreign borrowing is N850billion,” she said.
She gave the top 10 allocations of ministries with highest recurrent budget as: the Ministry of defense with N778.95billion, Education with N490billion, Police Affairs is N395.83billion, Health has N336.32billon, Ministry of Interior N219billion, Youths and Sports development with N168billion.
“For highest capital expenditure allocations, largest allocation is for the ministry of works and housing with N259.2billion, Education has N162billion including Universal Basic Education Commission transfers, Power ministry which includes transfer to NBET has N127.67billion, Transportation has N123.07billion, Defence has N99.87billion, health was allocated 90.9bn, Agriculture has N79.79billion and N75.8billion was allocated to the ministry of water resources while N41billion and N37.55billion was allocated to the ministry for Industry, Trade and Investment and science and technology, respectively,” she said.