FG, States, LGs Shared N3.010tn in First Half of 2017

Udoma ex­plains in­ten­si­fi­ca­tion of oil ex­plo­ration

THISDAY - - FRONT PAGE - Ndubuisi Fran­cis in Abuja and Obinna Chima in Lagos

The Fed­eral Ac­count Al­lo­ca­tion Com­mit­tee (FAAC) dis­bursed N3.010 tril­lion to the three tiers of gov­ern­ment be­tween January and June this year, fig­ures com­piled by THISDAY have shown.

The amount shared by the three tiers of gov­ern­ment was sig­nif­i­cantly higher, com­pared with the N2 tril­lion al­lo­cated to them in the first half of 2016.

A break­down of the dis­burse­ment gath­ered by THISDAY showed that the fed­eral gov­ern­ment re­ceived N1.216 tril­lion as FAAC in the first half of 2017, higher than the N854 bil­lion it was al­lo­cated in the com­pa­ra­ble pe­riod of 2016.

While the states re­ceived N798 bil­lion in the first six months of 2017, also higher than the N701 bil­lion in the com­pa­ra­ble pe­riod of 2016; lo­cal gov­ern­ments got N599 bil­lion in the first half of 2017 as FAAC, higher than the N429.4 bil­lion they re­ceived be­tween January and June this year.

THISDAY find­ings also showed a gen­eral in­crease in the rev­enue shared by the three tiers of gov­ern­ment.

A fur­ther break­down of the monthly al­lo­ca­tion in the first six months of the year showed that while FAAC dis­bursed N514.15 bil­lion to the three tiers of gov­ern­ment from the rev­enue gen­er­ated in January 2017, the Com­mit­tee dis­bursed N466.93 bil­lion to the three tiers of gov­ern­ment from the rev­enue gen­er­ated in Fe­bru­ary 2017.

Also, while from the rev­enue gen­er­ated in March 2017, FAAC shared N496.39 bil­lion, from the rev­enue gen­er­ated in April 2017, N418.82 bil­lion was also dis­bursed to the three tiers of gov­ern­ment. In the same vein, the FAAC dis­bursed N462.36 bil­lion to the three tiers of gov­ern­ment from the rev­enue gen­er­ated in May 2017 and N652.229 bil­lion for June.

The im­proved crude oil pro­duc­tion recorded by the coun­try recently is the ma­jor fac­tor re­spon­si­ble for the in­creased FAAC al­lo­ca­tion to the three tiers of gov­ern­ment.

Nige­ria’s oil pro­duc­tion recently rose from 1.2 mil­lion bar­rels per day to about two mil­lion bar­rels per day.

This saw the Or­gan­i­sa­tion of Petroleum Ex­port­ing Coun­tries (OPEC) and non-OPEC pro­duc­ers, led by Saudi Ara­bia and Rus­sia, ap­prov­ing the de­ci­sion of the fed­eral gov­ern­ment to cap Nige­ria’s oil pro­duc­tion at a sus­tain­able vol­ume of 1.8 mil­lion bar­rels per day.

Udoma ex­plains gov­ern­ment’s in­ten­si­fi­ca­tion of oil ex­plo­ration

In the mean­time, Nige­ria’s Min­is­ter of Bud­get and Na­tional Plan­ning, Sen­a­tor Udoma Udo Udoma, at the week­end in Lagos said the fed­eral gov­ern­ment was aware of the di­min­ish­ing long-term prospects of crude oil, ex­plain­ing that this was why it was im­por­tant to max­imise the use and ex­ploita­tion of the na­tion's petroleum re­sources now.

Udoma stressed that this was also why the gov­ern­ment was de­ter­mined to move away from ex­port­ing raw crude oil and in­stead to en­cour­age lo­cal re­fin­ing and pro­cess­ing, as well as the lo­cal pro­duc­tion of the var­i­ous deriva­tives from crude oil for which there will con­tinue to be do­mes­tic and in­ter­na­tional de­mand.

He spoke dur­ing an in­ter­ac­tive ses­sion with civil so­ci­ety or­gan­i­sa­tions and pri­vate sec­tor play­ers on the 2017 Medium Term Eco­nomic Frame­work (MTEF) and Fis­cal Strat­egy Pa­per (FSP) and said the gov­ern­ment was con­sid­er­ing to­tal oil pro­duc­tion vol­ume of 2.3 mil­lion bar­rels per day with an oil price bench­mark of $45 per bar­rel for the 2018 bud­get.

He said the gov­ern­ment was tar­get­ing rev­enue gen­er­a­tion of N5.16 tril­lion for 2018 as against N5.08 tril­lion in 2017. The amount would be gen­er­ated from oil rev­enue es­ti­mated at N2.1 tril­lion; non-oil rev­enue of N1.36 tril­lion; div­i­dend from Nige­ria Liq­ue­fied Nat­u­ral Gas -N29.58 bil­lion, and min­er­als and min­ing — N1.06 bil­lion.

Others are in­de­pen­dent rev­enue from agen­cies of gov­ern­ment — N847.9 bil­lion, do­mes­tic re­cov­er­ies and fines — N364 bil­lion, other fed­eral gov­ern­ment re­cov­er­ies — N138.43 bil­lion and grants and donor fund­ing — N281.6 bil­lion.

He said the bud­get would also be pred­i­cated on an ex­change rate of N305/$ as well as 12.42 per cent in­fla­tion rate.

Other bud­get bench­marks which the min­is­ter stressed that might also be ad­justed in­cluded nom­i­nal GDP of N133.97 tril­lion and N81.60 tril­lion nom­i­nal con­sump­tion.

He ex­plained: “The MTEF out­lines the fed­eral gov­ern­ment’s fis­cal poli­cies and our macroe­co­nomic pro­jec­tions for the next three years from 2018 to 2020 and it pro­vides the broad frame­work for the 2018 bud­get.

“In line with the goals of the Eco­nomic Re­cov­ery and Growth Plan (ERGP) 2017-2020, the medium term fis­cal poli­cies of gov­ern­ment will be di­rected at achiev­ing macroe­co­nomic sta­bil­ity, ac­cel­er­at­ing growth, in­ten­si­fy­ing eco­nomic di­ver­si­fi­ca­tion and pro­mot­ing in­clu­sive­ness.

“The need to look on­wards to boost non-oil rev­enues can­not be overem­pha­sised, as we di­ver­sify.

“We are on track to achieve full re­cov­ery and re­turn firmly to the path of growth. Fis­cal pru­dence must be ob­served at all lev­els of gov­er­nance.”

He said the MTEF and FSP were drawn from the Eco­nomic Re­cov­ery and Growth Plan (ERGP) 2017-2020, which is the blue­print guid­ing all the eco­nomic plans of the gov­ern­ment.

The ERGP, the min­is­ter stated, was it­self the prod­uct of ex­ten­sive con­sul­ta­tions with a broad spec­trum of Nige­ri­ans, including devel­op­ment ex­perts, top econ­o­mists and other crit­i­cal stake­hold­ers, adding that all bud­gets pre­pared within the planned pe­riod must be drawn from, and align with the pro­vi­sions of the ERGP.

Dur­ing the in­ter­ac­tions, he ex­plained the ba­sis for the key as­sump­tions and macroe­co­nomic frame­work con­tained in the pro­posed MTEF, par­tic­u­larly the pro­jec­tions for oil pro­duc­tion lev­els, crude oil price bench­mark, ex­change rate, in­fla­tion rate and GDP growth rate, among others.

Th­ese, Udoma noted, were all be­ing ex­posed for con­sid­er­a­tion and dis­cus­sion pur­poses, and wel­comed com­ments and sug­ges­tions on them.

He said the con­sul­ta­tions, which started penul­ti­mate Thurs­day with the gov­er­nors, and con­tin­ued last Tues­day and Thurs­day with the Na­tional Assem­bly, CSOs, pri­vate sec­tors op­er­a­tors (PSOs), the me­dia and gen­eral pub­lic in Abuja, were for the pur­pose of seek­ing pub­lic in­put into the prepa­ra­tion of the MTEF as rec­om­mended by the pro­vi­sions of the Fis­cal Re­spon­si­bil­ity Act.

The min­is­ter ex­plained that though gov­ern­ment's plan, as set out in the ERGP, is to di­ver­sify the econ­omy as soon as pos­si­ble away from re­liance on crude oil pro­ceeds, "we need the rev­enues from crude oil to fund the nec­es­sary in­fra­struc­ture investments that are re­quired to pro­vide the en­abling en­vi­ron­ment for the di­ver­si­fi­ca­tion of the econ­omy into agriculture, man­u­fac­tur­ing, con­struc­tion and ser­vices."

.Udoma stated that the pro­duc­tion level of 2.3 mil­lion bar­rels per day (mppd) pro­jected for 2018 is re­al­is­able, adding that the coun­try has the tech­ni­cal ca­pac­ity to pro­duce much more than that.

From avail­able sta­tis­tics from the Nige­rian Na­tional Petroleum Cor­po­ra­tion (NNPC), he stated that, with the in­clu­sion of cur­rent con­den­sates pro­duc­tion of 400,000 to 450,000 bar­rels a day, "we have been able to pro­duce more than two mil­lion bar­rels a day at some pe­ri­ods this year," he stated.

Ad­dress­ing con­cerns raised over the level of bor­row­ing and the con­tin­ued pro­vi­sion for a deficit in the bud­get, the min­is­ter, while ap­pre­ci­at­ing the con­cerns about the grow­ing debt fig­ures, ex­plained that the is­sue was not so much about debt prob­lem, but much more of a rev­enue prob­lem.

Ac­cord­ing to him, even with the cur­rent lev­els of bor­row­ing, the coun­try’s fis­cal deficit is still well within the three per cent thresh­old pre­scribed by the Fis­cal Re­spon­si­bil­ity Act, adding that gov­ern­ment was con­tin­u­ously mon­i­tor­ing the deficit level to en­sure that it re­mains within the thresh­old.

The min­is­ter also ad­mit­ted that it would be very chal­leng­ing to achieve the tar­get GDP growth rate of 4.8 per cent set out in the ERGP for 2018.

How­ever, he em­pha­sised that it could be achieved if the coun­try is able to at­tract a high amount of pri­vate sec­tor in­vest­ment to drive eco­nomic growth.

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.