The 2019 appropriation bill signed into law by President Muhammadu Buhari on Monday includes an overall unfunded deficit of over N102.83 billion, an official has said.
The outgoing Minister of Budget and National Planning, Udoma Udoma, disclosed this in Abuja on Tuesday during the public presentation of the “2019 Budget of Continuity”.
Although the revenue assumptions in the budget proposal submitted by President Buhari on December 19, 2018, were generally approved and adopted by the National Assembly, Mr Udoma said ‘unexplained increases’ of about N31.5 billion was introduced in the approved document.
He said, as a result, the president would be engaging the lawmakers on areas of concern soon.
He said the National Assembly also increased the budget size by N90.33 billion, from N8.83 trillion to N8.92 trillion, resulting in an overall increase of N58.83 billion in deficit.
Besides, he said the lawmakers equally reduced the proposed borrowing in the budget from N1.649 trillion to N1.605 trillion, creating an overall unfunded deficit of N102.83 billion.
“Allocations for some executive projects based on critical appraisal and linked to the ERGP (Economic Recovery and Growth Plan) were reduced and a large number of new projects, mainly constituency type projects, were introduced (by the National Assembly),” Mr Udoma said.
The minister said the president intends to engage the incoming leadership of the Ninth National Assembly as soon as it emerges, to dialogue on amendments necessary to ensure he delivers on his electoral promises.
He said the president also intends to seek the support of the lawmakers for a smoother, faster budget process going forward and their collaboration to return to a January-December financial year.
”The president intends to engage the leadership of the Ninth National Assembly as soon as it is inaugurated to discuss and dialogue with them.
“We have had a lot of issues in the past about budget. The president wants to start on a clean slate. That is why he wants to dialogue with the new leadership of the National Assembly for them to understand and appreciate the need for the funding of those critical projects not to be disturbed.
“The intention of the executive is to work with the National Assembly, to ensure the president can meet his commitments and promises to the people. The government will stay focused to ensure it builds on that momentum of recovery,“ he said.
Expected revenue sources
On where the revenue was being expected to fund the 2019 budget, Mr Udoma said based on the approved oil production of 2.3 million barrels per day and an average crude oil price of $60 per barrel, and the average exchange rate of N305 to the dollar, N3.7 trillion would be realised as oil revenue.
Other sources of revenue include N39.9 billion from government share of Nigeria LNG dividend; N1.3 billion from minerals and mining; N1.4 trillion from non-oil revenue sources.
The non-oil revenue includes company income Tax (N813.4 billion), value-added tax (N229.3 billion), Nigeria Customs collections (N310.9 billion), and Federation Account levies (N55.6 billion).
Also, about N955.4 billion is expected from nine top government-owned enterprises; N631.1 billion from independent revenue sources; N8.3 billion from Federal Government’s share of actual balances in special accounts; and N12.9 billion from Federal Government’s balances in special levies accounts.
About N84.2 billion will be expected during the year as Federal Government’s share of signature bonuses; N203.4 billion from domestic recoveries, assets, and fines; N710 billion as proceeds of oil assets ownership restructuring and N209.9 billion from grants and donor funding.
On expenditure, Mr Udoma said out of a total budget of N8.9 trillion, about N502.1 billion would go as statutory transfers; N2.1 trillion for debt service; N110 billion as sinking fund; N4.7 trillion as a recurrent expenditure (non-debt), and N350 billion as special intervention (recurrent).
Under capital expenditure, Mr Udoma said about N2.9 trillion would be for capital expenditure, while the fiscal deficit is put at about N1.9 trillion, with approved provision to retire maturing bond to local contractors reduced by about N10 billion.
The outgoing minister said the budget deficit is to be financed mainly by borrowing about N1.6 trillion split equally between domestic and foreign borrowing.
Mr Udoma lamented the reduction of the proposed borrowing from the N1.6 trillion in the proposed budget, saying this will increase the deficit component by about N31.5 billion.
“We are not quite sure why this was done and what gives them (NASS) the confidence that we will be able to realise more than was projected in the budget proposal,” he said.
He said the 2019 budget was designed to further reposition the economy on the path of higher, inclusive, diversified and sustainable growth, to continue to lift significant numbers of Nigerians out of poverty.
Driven by the Nigerian Economic Recovery and Growth Plan, (NERGP) he said some projections and proposals had been updated to reflect current realities.
According to him, the macro-economic environment has stabilised and recovered with renewed confidence in the recession in 2016.
“Growth has increased from 0.82 per cent in 2017 to 1.93 per cent in 2018, with a projection for 2019 at about 3.01 per cent,” he said.
Data for the National Bureau of Statistics (NBS) showed real GDP grew from 1.89 per cent in the first quarter of 2018 to 2.01 per cent in the corresponding period this year, the strongest first quarter growth since 2015.
He noted significant growth in the non-oil sector, including agriculture, industrialisation, manufacturing and services, grew at 2.4 per cent, in the first quarter of this year from 0.76 per cent in the same period in 2018. Its contribution to the GDP grew from about 90.4 per cent to 90.9 per cent.
However, he said with unemployment remaining high in the country; government is committed to pursuing growth that generates jobs for the people through the implementation of the NERGP.