The Minister of Finance, Mrs Zainab Ahmed, on Thursday, said that by the end of December this year, the Federal Government would have released about N1.1tn for the implementation of 2018 capital projects of Ministries, Departments and Agencies of the government. She said this in Abuja at the public presentation of the 2019 budget.
The event was attended by the Minister of Budget and National Planning, Senator Udo Udoma; the Director-General, Budget Office of the Federation, Ben Akabueze; the Executive Chairman, Federal Inland Revenue Service, Mr Tunde Fowler, and the Senior Special Assistant to the President on National Assembly Matters, Ita Enang.
The 2018 budget, which was signed by President Muhammadu Buhari, had total spending of N9.1tn, made up of N2.87tn for capital expenditure, N3.51tn for recurrent (non-debt) expenditure, and N2.01tn projected to be spent on debt servicing.
The N9.1tn budget was expected to be financed from N2.99tn to be generated from oil revenue, N31.25bn from the Nigeria LNG dividend while N1.17bn was expected to be realised through revenue from minerals and mining.
When asked why the Excess Crude Account was depleted by about $1.68bn in the last three weeks, she said that the fund withdrawn from the account contained the $1bn approved for security operations in the North-East.
She said, “Recall that the NEC (National Economic Council) had authorised the use of $1bn from the Excess Crude Account for security. So, the performance of that instruction is what has produced what we have in the Excess Crude Account.
“So, it’s been largely depleted but we are still saving into it and this is the third month that we have been saving consistently into the Excess Crude Account.” In respect to fuel subsidy owed oil marketers, the finance minister said the sum of N177bn had been released to marketers, adding that before the end of this year, another amount would be released.
Also speaking at the event, Udoma explained that the government was committed to improving the well-being of Nigerians through targeted spending on priority infrastructure projects in road, power, and rail, among others.
He said the 2019 budget was targeted at completing ongoing projects, adding that it would not be in the interest of the country if the government ignored the huge number of uncompleted projects, which the administration inherited in 2015.
On how revenue would be generated to fund the 2019 budget, he said that while Nigeria faced a significant challenge with revenue generation, key reforms would be implemented with “increased vigour to improve revenue collection.”
Some of the steps being taken to shore up revenue include the reduction of the government’s shareholdings in joint venture assets to 40 per cent. He said President Muhammadu Buhari had directed that the exercise should be completed within the 2019 fiscal year.
He also said the President had directed the ministry of finance to work with relevant agencies to take action to liquidate all recovered unencumbered assets within six months. In addition, the budget minister said the Department of Petroleum Resources had been directed by the President to within three months complete the collection of past-due oil licence and royalty charges.
Given the improved oil process and production levels, Udoma said the Nigerian National Petroleum Corporation had been asked to immediately commence the recovery of all outstanding obligations, including those due from the Nigerian Petroleum Development Company, which it had agreed to pay since 2017.
He also said there were plans to roll out a new set of taxes and excise duties, new and enhanced measures for enforcement for the Nigerian Customs and the Federal Inland Revenue Service.
To achieve this, the minister said the executive would have to approach the National Assembly to amend some laws that had some loopholes. He said oil revenue was expected to contribute N3.68tn to finance the 2019 budget while dividend from the Nigeria Liquefied Natural Gas was expected to provide N31.25bn.
The sum of N1.38tn is expected to come from non-oil sources of revenue while domestic recoveries, grants and donors, as well as the signature bonus, are expected to contribute N203.3bn, N209.92bn and N84.27bn respectively.
On the revenue realised to fund the 2018 budget, he said as of the end of the third quarter, the Federal Government’s actual aggregate revenue was N2.84tn, which is 40 per cent higher than the 2017 revenue.
He said, “The overall revenue performance is only 53 per cent of the target in the 2018 budget largely because some one-off items such as the N710bn from Oil Joint Venture Asset restructuring have yet to be actualised and have been rolled over to 2019.” Out of the total appropriation of N9.12tn, he said N4.59tn had been spent as of September 30 against the prorated expenditure target of N6.84tn.