Shola Oyeyipo in Abuja
The federal government has expressed its willingness to ensure a better financing of the N8.83 trillion 2019 budget.
Figures presented yesterday during a public hearing by the House Committee on Medium Term Expenditure Framework (MTEF), which comprises House of Representative Committee on Finance, Appropriation, Aids, Loans and Debt Management, headed by Hon. Babangida Ibrahim, pointed to government’s willingness to increase budget performance.
The Director-General, Budget Office of the Federation, Mr. Ben Akabueze, said having emerged from recession in the second quarter of 2017, Nigeria is expected to continue to experience growth from 0.8 per cent in 2017 to 2.1 per cent in 2018 and 3.01 per cent in 2019.
Ministries, Departments and Agencies (MDAs) present at the hearing all indicated that key assumptions and micro-framework of the 2019 budget were based on a projection of 2.3 million barrels per day (bpd) oil production, oil price benchmark of $60 per barrel, exchange rate of N305 to a dollar, 9.98 inflation rate, 119,28 trillion nominal consumption, 139.65 trillion nominal GDP and 3.01 per cent GDP growth rate.
The Economic Recovery Growth Plan (ERGP) projection for oil production was put at 2.4 mbpd, oil price benchmark of $50, exchange rate of N305 to a dollar, 13.39 inflation rate, 106, 03 trillion nominal consumption, 126, 36 trillion nominal GDP and 4.5 per cent GDP growth rate.
In his summary of the 2018 performance, Akabueze said: “As at the end of 2018, federal government aggregate revenue was N3.96 trillion, which is 55 per cent of the budget and which is higher than the 2017 revenue.”
The breakdown according to him, was: oil revenue (N2.32 trillion – 77 per cent of budget and 64 per cent higher than 2017); Company Income Tax (CIT) of N637, 25 billion (80 per cent of budget and 1.7 per cent higher than 2017) and Customs collection of N303,91 billion (94 per cent of budget and 16 per cent higher than 2017.”
He said: “Notwithstanding the softening in the international oil prices in late 2018, the considered opinion view of most reputable oil industry analysts is that the downward trend is not necessarily reflective of the outlook for 2019.
“Currently, the average Brent oil price projection for 2019 by 32 different institutions with relevant expertise is still about $69,” he stated.
Akabueze assured Nigerians that the government will continue its fiscal strategy of directing resources to most productive and growth-enhancing sectors, while efforts will be intensified to increase revenue, adding that the government will equally leverage private capital to supplement capital allocation from the budget.
“We will closely monitor the situation and will respond to any sustained changes in the international oil price outlook for 2019. Mr. President has directed the Nigerian National Petroleum Corporation (NNPC) to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day.
“The budget proposal seeks to continue the reflationary and consolidation policies of the 2017 and 2018 budgets, respectively, which helped put the economy back on the path of growth,” he noted
Also expatiating on the projected tax revenue for the period and the baseline assumptions, the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, said the tax office was optimistic of performing better than 2018
Also on its part, the Comptroller General, Nigerian Customs, Col. Hammed Ibrahim Ali, (rtd) said strategies were on ground to actualise the 2019 budget target, stressing that “every opportunity that will help in attaining the target shall be employed.”
He said “the proposed automation of all forms of manual payment in every Customs formation is geared towards enhanced revenue and budget performance,” adding that “this approach will certainly culture the integrity and sanity of the service operations. “
He added: “There shall be a holistic assessment and monitoring of all revenues collected on behalf of the service by the various designated commercial banks.
“This will create avenue for genuine reconciliation of all accrued revenues against claimed remittances to the various designated government accounts.”
He said this will also guide against diversion of any collectible revenue.
The government also said it will adopt concessionary financing for the 2019 budget deficit rather than commercial.
Briefing lawmakers, the Minister of Finance, Mrs. Zainab Ahmed, said “the budget deficit is to be financed mainly by privatisation proceed (N210 billion), and borrowings totaling N1.649 trillion.”
She said the amount is broken into domestic sources – N824. 82 billion – and foreign sources (N824.82 billion).
Also assuring Nigerians that the federal government has evolved a new revenue strategic growth agenda developed by her ministry to ensure a sustainable revenue flow system, Ahmed said: “We have identified new revenue streams and we’re working to tap into them, especially the identification of new taxes for which we are working with the FIRS to bring that to fruition, of course with amendment to relevant tax laws.
“We are working now to implement the TSA to cover foreign accounts operated by government agencies in order to broaden the net and minimise leakages.”
Also, the Accountant-General of the Federation, Mr. Ahmed Idris noted that June 30, 2019 date has been set for the closure of 2018 budget and also stated that Nigeria will not renege on its obligations to foreign and local creditors.