Okonjo-Iweala: President to Assent to 2015 Budget Soon
Confirms N145.52bn approved for fuel subsidies N1bn allotted to National Assembly clinic
President Goodluck Jonathan is expected to assent to the 2015 budget recently passed by the National Assembly soon, as the Coordinating Minister for the Economy (CME) and Finance Minister, Dr. Ngozi OkonjoIweala declared yesterday that the Appropriation Bill the parliament passed was not “dramatically” different from what was sent to it by the executive.
Also, contrary to claims in some quarters that subsidies on petrol and kerosene had been removed from the budget to torpedo the smooth take-off of the incoming administration, Okonjo-Iweala confirmed that
a total of N142 billion was provided in the budget for both petroleum products.
She gave the breakdown as N100 billion for petrol and N42.52 billion for kerosene.
At the 2015 budget briefing in Abuja yesterday, the minister gave the parameters as $53 per barrel benchmark, and a dollar higher than what was proposed to the National Assembly, translating to an exchange rate of N190 to the US dollar.
The minister, who lauded the National Assembly for finding the time to pass the budget in spite of the demands of electioneering, stated that the Senate passed the 2015 budget on April 28, following the passage of the same bill by the House of Representatives on April 23, with an expenditure outlay of N4.493 trillion, up from the N4.425 trillion proposed by the executive.
This, she said, represented an increase of N67.43 billion, adding that the parliament passed a benchmark oil price of US$53 per barrel, $1 higher than the budget proposal, and generating extra revenue of N54.25 billion for the government.
According to her, other key parameters driving the oil revenue side of the budget were retained, including oil production volume of 2.2782mbpd and an exchange rate of N190/$.
While other components of non-oil revenue were also retained as proposed, the minister disclosed that the federal government’s independent revenue was raised by N39.294 billion from N450 billion to N489.294 billion.
Based on the above, she affirmed that gross federally collectible revenue increased by N169.845 billion, from N9.61 trillion to N9.78 trillion, as a direct result of raising the benchmark price.
FGN budget revenue also rose from N3.358 trillion to N3.452 trillion even as the aggregate expenditure passed by the parliament stood at N4.493 trillion, N67.43 billion higher than the proposed aggregated expenditure of N4.425 trillion.
The National Assembly also retained the N943.62 billion proposed by the executive for debt service, while statutory transfers increased by N9.34 billion from N366.28 billion to N375.62 billion.
The Niger Delta Development Commission (NDDC) vote was also increased from N45.78 billion to N46.72 billion, an increase of N940 million, while that of the Universal Basic Education (UBE) was increased from N67.30 billion to N68.38 billion (an increase of N1.08 billion).
According to the CME, “These are strictly based on the formula driven by the increase benchmark oil price.”
In this regard, the National Assembly’s budget was raised by N5 billion, from N115 billion proposed by the executive to N120 billion.
Meanwhile, aggregate capital expenditure (including transfers and SURE-P) increased to N722.20 billion, from N663.67
This comprises an increase of N37.77 billion in ministries, departments and agencies’ (MDAs’) capital and N20.80 billion for Millennium Development Goals (MDGs) under capital supplementation.
However, while the National Assembly completely removed N5 billion proposed for the Integrated Personnel and Payroll Information System (IPPIS), N1 billion was provisioned for a new project – National Assembly Clinic.
Capital development of the National Institute for Legislative Studies was also increased by N4 billion (from N2 billion to N6 billion).
But the provision of N20.78 billion for SURE-P capital spending as proposed in the Appropriation Bill presented by the executive was retained.
Responding to questions on what would become of capital releases which have been stalled due to the 50 per cent revenue drop, the minister said she could not speak for the incoming administration since the government she is serving would wind down on May 29.
She maintained her position that the year would be a difficult one due to the revenue slump, adding that the cash crunch had been ingeniously managed month-by-month by the current administration in order to keep the country afloat.
“As you know, I have been honest with you since the current economic problems started. I would like to repeat: we have serious challenges. Things have been tough since the beginning of the year and they are likely to remain so till the end of the year. We have serious challenges but we also have strengths and if we do the right things, we can keep a steady course and emerge out of the current situation.
“As a result of the 50 per cent decline in oil revenues, the country has faced a difficult cash crunch and the federal government has focused on keeping the economy stable and the government running through a series of measures,” she said.
According to her, ”We have frontloaded the borrowing programme to manage the cash crunch in the economy,” adding that of the N882 billon budgetary provision for borrowing, the government had borrowed N473 billion to meet its recurrent spending obligations, including salaries and overheads.
“Traditionally the first part of the year witnesses low revenue because tax receipts come in from the middle of the year. This has compounded the challenges caused by the steep drop in revenues due to the oil price fall.
“As a consequence of the revenue challenges, there has been no capital budget release so far this year. In spite of this challenge, government has managed to keep the economy stable to the point that the Nigerian economy which is projected to grow by 4.8 per cent this year, is according to respected analysts, doing much better than many other oil producing countries
“One positive feature despite the clear challenges is the fact that food prices, though inching up are still quite stable. Also inflation is still in the single digit. This has helped to reduce some of the pressure that Nigerians are going through.
“We also have the advantage that we are an asset rich country and that is a definite strength. It is a challenging time and requires daily, weekly and monthly management to keep the country going and that’s what we have been doing.”
On when Jonathan will assent to the budget, the minister said it remained the president’s prerogative to decide whether to sign or not, adding that she had already made her recommendations to him since the National Assembly did not dramatically alter the budget.