Posted by News Express | 20 June 2017 | 1,603 times
Minister of Budget and National Planning, Senator Udoma Udo Udoma has pledged that government would work hard to increase revenues so as to be able to fund the Budget.
Senator Udoma also said that in spite of criticisms about government borrowings, the country’s fiscal deficit is still well within the three per cent limit and government is keeping very tight control on the size of the budget to make sure the fiscal deficit remains within that threshold.
The Minister, who was speaking at the 2017 budget breakdown session, said although certain developments affected the realisation of projected government revenue last year, the administration is working hard to ensure increase in revenues to fund the 2017 budget.
“In terms of implementation of the Budget, we are making strenuous efforts to find the resources required. We are challenging our revenue generating agencies, particularly the FIRS (Federal Inland Revenue Service) and the Customs, to improve their efficiency and broaden their reach so as to achieve the targets set for them in the 2017 budget,” he explained.
He added that government would strive to maximise the revenues it could generate from the oil and gas sector as it was clear that the foreign exchange generated from the sector is critical for government’s plans to diversify to the non-oil sectors.
As government is introducing measures to improve on the efficiency in that sector to increase its take, the Minister said “we are also engaging more extensively with the communities and people of the Niger Delta to minimise disruptions to oil production”.
Reviewing the 2016 Budget performance, Senator Udoma said there was reasonable progress on implementation and achievement of set targets although aggregate revenues was less than projections, mainly due to disruptions in oil production in the Niger Delta region.
The developments in the oil sector, according to him, adversely impacted oil revenues and foreign exchange receipts, and also negatively affected non-oil revenues as non-oil activities are critically dependent on the foreign exchange generated by the oil sector.
“As at year-end, Federal Government’s 2016 actual revenue was N2.95 trillion (76.4 per cent of the N3.85 trillion budgeted). Oil revenue was N697.8 billion (97.2 per cent of budget); Company Income Tax and Value Added Tax collections were N457.91 billion and N108.72 billion respectively, representing 52.8 per cent and 54.8 per cent of amounts budgeted; while Customs collections of N247.42 billion implied a 63.6 per cent performance," he explained.
Despite the shortfall in revenue, the Minister said that government met its debt service obligations and personnel costs while overhead costs were largely covered.
He pointed out that although capital expenditure suffered because key recurrent spending like debt service and payment of salaries had to be met first, N1.22 trillion released for capital under the 2016 budget remained the highest aggregate capital releases for a single fiscal year for Nigeria. “This was achieved despite the lower oil prices and revenue shortfalls, which underscores the government's commitment to investing in critical infrastructure,” he noted.
The Minister explained that in designing the 2017 Budget, certain critical international factors that affected Nigeria as a country were considered, including the protracted period of lower oil prices, major macroeconomic realignments in China, increasing divergence in monetary policy in major economies, uncertain economic, political and institutional implications of BREXIT, weak demand in advanced economies and its spill-over effects; and geopolitical tensions in several countries.
The Economic Recovery and Growth Plan (ERGP), which was launched early this year, the Minister explained, is meant to address critical economic challenges. He pointed out that although the 2017 Budget was prepared before the finalisation of the ERGP, it drew extensively from the policies set out in the plan.
He explained that the 2017 Budget reflects “our fiscal plan to restore the economy to the path of sustainable and inclusive growth, the specific goals and targets of which are set out in the 2017 - 2020 Economic Recovery and Growth Plan (ERGP).”
Reflecting on the late passage of the last two national budgets, the Minister said in the months ahead, the Executive would work with the National Assembly to ensure that Nigeria returns to a predictable January – December fiscal year, with the budget signed into law ahead of the commencement of the fiscal year in the near future.
Also at the event, the Director General of the Budget Office, Mr Ben Akabueze said government was determined to bridge the gap between citizens and government by the measures being taken to promote greater transparency and accountability in the entire budget framework. “Our membership of the Open Government Partnership (OGP) has strengthened our resolve to enhance stronger citizen engagement and improved public service delivery,” he said.
Mr Akabueze disclosed that the Budget Office is implementing a Citizen’s Portal on its website to enhance citizens’ participation across the entire budget cycle. In addition, a dedicated hotline for citizens with queries or questions on the budget is also being activated.
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