The Federal Government has disclosed that it is planning to propose a N8.6 trillion Appropriation Bill to the National Assembly for consideration as 2019 budget.
The proposed figure is lower by N508 billion when compared with the N9.1 trillion approved budget for the current fiscal year.
Budget and National Planning Minister, Sen. Udoma Udo Udoma, made the disclosure at the consultative forum on the Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) 2019-2021 held Thursday in Abuja.
The 2019-2021 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) outlines FG fiscal policies/strategies and macroeconomic projections for 2019– 2021; provides the broad framework for the annual budget in line with the Fiscal Responsibility Act (FRA) 2007.
The key thrusts of the 2019 – 2021 MTEF/FSP are consistent with the goals of the ERGP’; aimed at sustaining growth and diversifying the productive base of the economy.
It would be recalled that the National Assembly jerked up the 2018 budget by N508 billion after the Executive had proposed a budget of N8.612 trillion for this year’s budget before it was raised to N9.2 trillion by the Legislature.
The Minister told his audience, comprising representatives of the organised private sector, civil society groups and the media, that the reduced government revenue projection for the year and the need to cut down on borrowing influenced government’s decision to reduce the budgetary proposals for 2019.
He said: “Borrowing was critical when we were shirt of funds to fey the country out of recession. And that borrowing was directed at capital projects and it worked.
“And that is why you see activities in Lagos-Ibadan railways. That is why you see Lagos, Kano terminals are being finished. That is where the money went into. The borrowing was necessary and essential, and it was borrowed for infrastructure. However, that level of borrowing we are taking it down because as revenue pickup, we rely less on borrowing”, Udoma added.
The minister harped on the need to increase the country’s revenue generation.
According to him, it is important for the country to substantially concentrate at increasing its oil and non-oil revenues as well as reduce borrowing.
He explained further: “We must look at ways of squeezing out the maximum we can get from oil because oil is a wasting asset, we need to get the money and use it to solve a lot of our problems.
“We need to invest in infrastructure, invest in human capacity development and in all we need to build up our stock of capital. We also need to ensure we build up the non-oil sector.
“At the moment, the revenues are on average up by about 30 per cent from 2017, but it is not where we want to be, we need to do much better.
“Our ratio of taxes collected to our Gross Domestic Product (GDP) is still very low.
“We need to look at how we can generate resources so that we rely less on debts, more on revenue and also build up the revenue so our debt service to revenue ratio will bring that down.
“We must increase our revenues that have to be the priority, because when you have that revenue, it is possible to deliver quality infrastructure which this country requires’’, Udoma stressed.
He expressed optimism that the country would continue to experience growth with the continued implementation of the ERGP, as well as the improved outlook for oil prices.
In terms of oil production volume, the minister said it was projected at 2.3 million barrels per day for 2019, while the exchange rate benchmark was set at N305 to U.S dollar
He said the GDP growth rate for 2019 was projected at three per cent, 3.6 per cent for 2020 and 3.9 per cent for 2021.
According to the power point presentation, the government is projecting oil revenue at N3.668 trillion; share of Non-oil revenue at N1.385 trillion; share of minerals and mining N1.288 trillion, and share of NLNG dividends at N39.880 billion.
Also, independent revenue is projected at N642.579 billion, Grants and Donor funding N209.915 billion and FG’s share of signature bonuses at N84.228 billion.