SAN FRANCISCO, July 27, (THEWILL) – The Federal Government on Thursday promised to comply with provisions of the Fiscal Responsibility Act of 2007 by sending the 2018 budget estimates to the National Assembly at the beginning of October this year.
The Minister of Budget and National Planning, Senator Udo Udoma disclosed this in Abuja during a public dialogue with top government officials, members of Civil Society Organisations, and the Organised Private Sector among others on the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper.
He acknowledged that the early submission of the budget to the lawmakers would give them enough time to consider the fiscal document and pass it on time.
Udoma disclosed that the overall goal of the government is to ensure that the country returns to a predictable budget year which would run from January to December.
“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,” he said, adding: “We are committed to delivering the 2018 budget to the National Assembly by the beginning of October”.
The minister went on to state that it is the projection of the federal government to spend about N7.9 trillion next year, which about N500 billion more than its N7.44 trillion appropriation for 2017. He added that the government was proposing in the MTEF, a $45 per barrel of oil and a 2.3 million barrel per day (mbpd) oil production quota for the 2018 budget.
Udoma further disclosed that the budget would also be predicated on an exchange rate of N305/$; 12.42 inflation rate; a 4.8 per cent GDP growth rate; nominal GDP of N133.97 trillion and N81.60 trillion nominal consumption.
He stated that the early submission of the budget to the legislature would provide the lawmakers ample time to consider the fiscal document and pass it on time.
The minister said the fiscal deficit was expected to rise to N2.77 trillion in 2018 from N2.35 trillion, adding that there was no need for Nigerians to panic about the country’s debt burden.
The nation’s debt profile, he noted, was sustainable as it was still within the threshold approved by the Fiscal Responsibility Act, FRA, 2007.
Udoma also explained that there is no country in the world that does not borrow, pointing out that the federal government was capable of meeting its obligations to its creditors.
“We are maintaining our deficit and debts within sustainable limits. Debt financing will be restructured gradually in favour of foreign financing as part of a strategy to lower debt service burden and free up more fiscal space for the private sector,” he added.
The minister also disclosed that the government was targeting a total oil production volume of 2.3 million barrels per day with an oil price benchmark of $45 per barrel.
Government’s plan in 2018, he added, was to reduce inflation rate to 12.42 per cent with a Gross Domestic Product (GDP) growth rate of 4.8 per cent and nominal GDP of N133.97 trillion.
In terms of revenue projections, he said the government was targeting N5.16 trillion for 2018 as against N5.08 trillion in 2017.
The amount would be generated from oil revenue — N2.1 trillion, non-oil revenue — 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.
On the expenditure, the minister said the government was planning to spend N2.63 trillion on non-debt recurrent expenditure, while N350 billion has been set aside for special intervention programmes.
Udoma said N2.4 trillion would be spent on capital projects implementation as against N2.17 trillion approved for 2017.
He described the targets of the government in 2018 as “ambitious” but noted that they were achievable.
His words: “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.”
