BY COBHAM NSA, ABUJA – The Federal Government on Tuesday insisted that obvious distortions by the National Assembly (NASS) will make it difficult to achieve set targets and realistic implementation of the 2019 Budget.
It accordingly expressed serious concerns over its ability to readily augment the extra N102.84 billion required to address the funding gap created by the lawmakers’ decision to up the budget by over N90.3 billion
This is as the Minister of Budget and National Planning, Senator Udoma Udo Udoma, assured that the 2019 Budget will continue the reflationary and consolidation policies of the 2017 and 2018 budgets which assisted in putting the nation’s economy back on track and the path of sustainable growth.
Raising the alarm in support of concerns expressed by the President at Monday’s budget-signing ceremony, Senator Udoma said hope is not lost as the presidency plans robust engagement with the incoming 9th National Assembly to urgently address the budgetary predicament after its inauguration and constitution of the new leadership.
The Minister lauded Nigerians and all critical stakeholders for supporting the President Muhammadu Buhari-led administration in the last four years, saying that the future holds good tidings for Nigeria despite all odds.
“Nigeria is in a much better place today than it was when we came in. The prospects are very encouraging. We are not yet where we want to be. But certainly, there has been appreciable improvement that gives hope of a greater future for Nigeria”, he said.
Senator Udoma, who spoke at the Public presentation of the 2019 Budget in Abuja, said the new budget figure will put government under intense pressure with increase borrowings presenting itself as the likely option.
According to him, the enlarged budget size from N8.83 trillion to N8.92 trillion has ultimately resulted in an overall raise of about N58.83 billion in deficit.
He also hinted that reduction of government’s proposed borrowing from N1.649 trillion to N1.605 trillion has clearly created an “overall unfunded deficit of N102.83 billion”, adding; “To fully fund the budget, the level of borrowing may therefore have to increase.”
Noting that the NASS also introduced many new projects, mostly constituency type projects into the initial document, the Minister said in addition, the challenges are visible in the reduction of allocations to some executive projects on critical appraisal and linked to the ERGP.
In addressing the worrying concerns over budget financing, Senator Udoma said government is looking to generate total revenues of N7 trillion to fund the 2019 budget; comprising N3.69 trillion from oil revenues and N3.31 trillion from non-oil revenues, while the deficit of N1.92 trillion would be financed mainly by borrowing N1.605 trillion split equally between the domestic and foreign markets.
He stated that for 2019 expenditure profile, allocations to Ministries, Departments and Agencies (MDAs) of government were guided by the three core objectives of the ERGP.
The Minister listed these as: (a) Restoring and Sustaining Growth; (b) Investing in our People; and (c) Building a Globally Competitive Economy, adding; “As with 2016, 2017 and 2018 Budgets, the 2019 Budget has been prepared on the Zero Based Budget (ZBB) Principles.”
The Minister also spoke on key assumptions and macroeconomic framework of the 2019 budget, disclosing that the President has directed the Nigeria National Petroleum Corporation (NNPC) to take all the necessary measures aimed at achieving the projected ambitious target of 2.3 million barrels per day crude oil production.
Other key assumptions include crude oil benchmark of $60/barrel; Exchange rate of N305/$1; GDP growth of 3.01 per cent; and inflation rate target of 9.98 per cent.
On the N8.92 expenditure profile, Senator Udoma said recurrent non-debt expenditure stands at N4.07 trillion; Ministries Department and Agencies (MDA)’s capital and capital supplementation has been pegged at N2.09 trillion; with debt servicing taking N2.14 trillion, representing 31 per cent of expected revenues.
Similarly, capital expenditure, inclusive of transfers, GOEs capital and project-tied loans as of percentage of total FGN expenditure take 31 per cent of the expenditure.
Among the projects captured in the 2019 budget are ongoing and new ones in the transport sector. These include: N78.22 billion Counterpart funding for Railway projects including: Lagos-Kano (Ongoing); Calabar-Lagos (Ongoing); Ajaokuta-Itakpe-Aladja (Warri) (Ongoing); and Port Harcourt-Maiduguri (New).
Others include: Kano-Katsina-Jibiya-Maradi in Niger Republic (New); Abuja-Itakpe and Aladja (Warri)-Warri Port And Refinery; Including Warri New Harbour (New); Bonny Deep Sea Port & Port Harcourt and other Rail Projects; N941.14 million for construction of Terminal Building at Enugu Airport: N12 billion for construction of Second Run-Way at Nnamdi Azikiwe International Airport Abuja.
In the Works sector: About N258.41 billion for the construction and rehabilitation of roads in every geo-political zone of the country, such as, Counterpart Funding for the Dualization of Makurdi – Enugu Road; Counterpart Funding for the dualization of Akwanga-Jos-Bauchi-Gombe Road; Reconstruction of the Outstanding Sections of Benin-Ofosu-Ore-Ajebandele-Shagamu Expressway; and Construction of Bodo-Bonny Road.
Also listed in the budget are: Pavement Strengthening and Asphalt Overlay of Ajebandele-Ijebu Ode-Shagamu Road; Construction of Oju/Loko – Oweto Bridge to link Loko and Oweto; Dualization of Ilorin-Jebba – Mokwa/Bokani Junction Road; Kano – Maiduguri Road (Various Sections); Abuja-Lokoja Road (Various Sections); Dualization of Obajana Junction to Benin (Various Sections); Lagos-Shagamu – Ibadan Dual Carriageway; Early Works for the Construction of 2nd Niger in Anambra and Delta states.
On new revenue generating initiatives, the Minister said there is a Presidential directive for work to be completed on deploying the National Trade Window and other technologies to enhance Customs collections efficiency in the coming years.