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FG to spend N4.74tn cash in 2015

By on September 1, 2014

The Federal Government is projecting a budget of N4.74tn for the 2015 fiscal year, a document obtained from the Ministry of Finance has revealed.

This figure was contained in the government’s Medium Term Expenditure Framework and Fiscal Strategy Paper covering the 2014 to 2016 fiscal periods.

The MTEF and FSP, a copy which was obtained by our correspondent on Friday in Abuja, provides the basis for annual budget planning and consists of a macroeconomic framework that indicates fiscal targets, estimates, revenues and expenditure, including government financial obligations in the medium term.

The document, prepared by the Ministry of Finance also sets out the underlying assumptions for these projections, provides an evaluation and analysis of the previous budget and presents an overview of consolidated debt and potential fiscal risks.

It also provides a number of important outcomes, including the macroeconomic outlook; fiscal balance; and other key indicators.

The projection fulfills a requirement of Section 11 of the Fiscal Responsibility Act 2007 which stipulate that the minister of finance shall prepare the MTEF and FSP and get them approved by the Federal Executive Council and the National Assembly.

An analysis of the document shows that the N4.74bn projected expenditure for 2015 represents an increase of N500m over the N4.69tn signed by President Goodluck Jonathan for the current fiscal year.

The Senate had on April 9 passed the 2014 budget raising the amount in the fiscal document from the N4.642tn submitted by the President to the National Assembly on December 19, 2013 to N4.695tn.

A breakdown of the expenditure for 2015 according to the MTEF shows that the sum of N2.48tn will go for recurrent expenditure (non debt) while N1.35tn is for capital expenditure.

According to the document, the share of capital expenditure to total spending is projected at 30.98 per cent while the portion for recurrent expenditure to the total budget is put at 69.02 per cent.

The document further stated that the sum of N409.2bn had been projected for statutory transfers while debt servicing is expected to gulp N684bn.

A further breakdown of the recurrent expenditure (non debt) shows that personnel cost will gulp N1.77tn while overheads, pensions and other service wide votes are expected to gulp N240bn, N153.23bn and N316.8bn, respectively.

On expected revenue for the 2015 fiscal year, the documents are projecting an oil production of 2.5 million barrel per day with an oil benchmark price of $75 per barrel.

It is also projecting a collection of N1.06trn as company income tax and N876bn from Value Added Tax.

It said, “The 2014-2016 MTEF and FSP are underpinned by heightened global economic uncertainty.

“Added to these global challenges is the potential impact of the increasing exploitation of shale oil and gas by major oil importers, the rising oil output by hitherto oil importing countries; and the challenges of oil theft, pipeline vandalism and production shut-ins at our oil mining locations and reduced non-oil revenue.

“These are the realities that informed the crafting of the 2014-2016 Medium-Term Fiscal Framework and the Fiscal Strategy Paper, with optimism of success in tackling the challenges causing the revenue loss.”

According to the document, while government remains focused on achieving its key development agenda through spending on priority sectors, the potential drop in revenues will temporarily set back the share of capital expenditure.

“Our strategy, however, is to continue to improve on the efficiency of capital expenditures. Though the wage bill, in particular, cannot be cut overnight, government is expediting action towards the total deployment of the Integrated Personnel Payroll Information Systems in all Ministries, Departments and Agencies in order to rationalise recurrent spending,” it added

It also stated that that government will continue to build on the macro-economic gains of the recent years, further strengthen macroeconomic stability, diversify the revenue base and invest in critical infrastructure and job creation among other initiatives.

These, it adds, will continue to be the focus of the government’s fiscal strategy over the medium term as a means to actualising the overall policy of fiscal sustainability and inclusive growth.

 

 

[Punch]