2019 Budget: Udoma Allays Fears Over New Minimum Wage, Recession

• Proposals for NASS Nov ending

BY COBHAM NSA, ABUJA – The Minister of Budget and National Planning, Senator Udo Udoma says despite apprehension in certain circles over next year’s general elections, there are adequate provisions to cover any new minimum wage figure while the National Assembly will receive the 2019 Budget proposals by November ending.

The Minister also dismissed what he described as conjectures of looming recession threats given the direction of positive movements and encouraging indicators in the economy.

Senator Udoma said notwithstanding heightening political activities in the country, government has adequate provisions in the Service-wide votes to accommodate any outcome of on-going new minimum wage negotiations with the Labour movement.

According to the Minister, the country is set for a more prudent budget in 2019, and “There are no such possibilities of Nigeria drifting into recession. The direction of movement in the economy is positive and we are confident of better days ahead.”

He however admitted that a lot of work still needs to be done for Nigeria to achieve sustainable economic growth and prosperity, adding; “We are not going on the expected fast pace and we are not where we want and ought to be”.

Speaking at a Public Consultative Forum in Abuja while unveiling the 2019-2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), Senator Udoma said the document will be ready for presentation to the NASS by October ending given the amount of work already done by the executive arm of government.

He debunked insinuations about increased borrowing and hike in taxes to fund the 2019 budget, saying government is more focused on improving the lots of Nigerians through creative ways of expanding its resource base.

“I can assure you that there are no plans to increase taxes but only to ensure that more people are brought into the tax net. The concentration is on getting our revenue up from the current level through the non-oil sector. From last year’s figure of about 30 per cent, we are working on improving the revenue profile in order to rely less on borrowing to grow the economy” he said

Senator Udoma stated that the leaner budget size being proposed for 2019 aims at reducing the level of borrowing and deficit financing in the economy going forward, stressing that projections in the MTEF document are in support of a reduced Appropriation package of N8.651 trillion for presentation to the NASS compared to the current budget figure of N9.12 trillion

Maintaining that more fiscal prudence would aid the needed growth in the economy, the Minister, who attributed the projected compact budget size to inadequate revenue, said highlights of the 2019 budget proposals to be considered and approved by the Federal Executive Council (FEC) before presentation to the National Assembly include cutback on government’s expansionary fiscal policy based on drop in revenue projection, total size and capital projects’ vote.

However, while recurrent spending is expected to hit N4.753 trillion from about N3.516 trillion, capital expenditure will drop from the current N3.133 trillion to N2.793 trillion in 2019.

Similarly, Senator Udoma said government is projecting the exchange rate to steady at N305 to a US dollar; oil mineral production volume of 2.3 million barrels per daily with an improved budget benchmark of $60 bpd from the current regime of $51

On issues surrounding the conventional January-December calendar year for Nigeria’s budgeting cycle, the Minster said being a pre-election year; it would be difficult for government to have its way with the 2019 Appropriation given the avalanche of political activities that will occupy the attention of both executive and legislative arms of government ahead of the February 2019 general elections

“It might be difficult for this particular budget (2019) to do the January to December life cycle because of the electioneering year. It might be difficult for the National Assembly to do that now. So, we should be looking at the 2020 appropriation”, he said