Iyobosa Uwugiaren in Abuja
The Minister for Budget and National Planning, Senator Udo Udoma, has said that federal government did not submit a revised Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) as reported by some newspapers Tuesday, saying it only updated the document that was earlier submitted based on the current National Bureau of Statistics (NBS) report.
It also said the minister also never said that the federal government was looking to raise N10 trillion in 2017 from oil and non-oil sources.
“The MTEF/FSP were actually prepared about July this year and approved by the Federal Executive Council (FEC) in August. The document was produced early and it fully complied with the requirements of the Fiscal Responsibility Act (FRA),’’ the special adviser (media) to the minister, James Akpande, stated.
He said the reason the ministry did it at that time was to comply with the provisions of the FRA, saying that even at that time, the ministry knew there would be some updates.
He added: “We recall that page 33 of that document said government is currently working on an Economic Recovery and Growth Plan which may necessitate certain adjustments in some strategic sectors of the economy.
“At the time we completed the MTEF, it had not yet been confirmed that we were in recession; recession was confirmed thereafter. That, among other things, means that some of the information and data had to be updated, and that is what we have been doing. We have been working hard updating the data to make sure that it is consistent with the latest information.’’
He said one of the areas that the government had updated is the revenue expectations saying ‘’if you are in a recession, you can’t expect to have the same level of revenue as before.’’
“So, we adjusted it downwards. Independent revenues were adjusted downwards; Federal Inland Revenue Service (FIRS) projections were adjusted downwards’’, he added.
“Having adjusted revenue projections downwards, we were faced with the issue: how do we get out of recession without spending? If we adjusted everything down, we will end up with a small budget, with small capital; and that conceivably cannot get us out of recession.
“So, we had to be innovative. We spent a long time trying to establish how do we get alternative revenue sources for the ones which we are not likely going to realize, of which we have actually down-graded.
“And it was clear to us that we have to look again at the oil sector because in order to diversify out of oil, the lowest hanging fruit is actually the oil sector.’’
He further added that one of the things government is doing is to engage much more on Niger Delta to bring up oil production.
He quoted Udoma as saying: “We also looked at restructuring the oil industry to generate more revenue. We have already announced that we are exiting cash calls. We are restructuring our arrangements with joint ventures so that we can actually get more revenue.’’
He said that looking at early licensing renewals next year – all these aimed at getting additional revenue.
“We also looked at the Atlantic Energy issue – how to allow new companies to acquire some of the assets. Details are still being worked out by the Ministry of Petroleum Resources,’’ he added.
“We are also aggressively looking at royalties. We found out that there were a lot of outstanding royalties. We are going after collecting those royalties so that we can fund the budget.
“After getting the nod of the National Assembly, government will be issuing promissory notes for outstanding liabilities of at least N2 trillion. We believe that with all these, we will be able to make up for the shortfall with the reduction we have made.”
“Some of the funds expected will be in foreign currencies and these should be able to beef up our revenues as well as our foreign reserves.’’