Budget Minister explains projections for MTEF, FSP for 2018-2020

The Minister of Budget and National Planning, Senator Udoma Udo Udoma at the weekend took the 2018-2020 MTEF and FSP consultations exercise to Lagos where he met with civil society organizations (CSOs), private sector operators (PSO) and the general public.

Udoma presented draft proposals for the Medium Term Fiscal Framework/Fiscal Strategy Paper (MTFF/FSP) 2018-2020 and called for suggestions and inputs which could included in the final MTEF which would serve as the basis for the 2018 Budget.

He pointed out that the proposals he was presenting for the consideration of the general public were drawn from the Economic Recovery and Growth Plan (2017-2020) which is the blueprint guiding all the economic plans of the Government.

The minister noted that the ERGP was itself the product of extensive consultations with a broad spectrum of Nigerians, including development experts, top economists and other critical stakeholders.
He said that all budgets prepared within the Plan period must be drawn from, and align with, the provisions of the ERGP.

During the interactions, he explained the basis for the key assumptions and macroeconomic framework contained in the proposed MTEF, particularly projections for oil production levels, crude oil price benchmark, exchange rate, inflation rate and GDP growth rate among others. These were all being exposed for consideration and discussion purposes. Accordingly, he welcomed comments and suggestions on them.

He said the consultations which started penultimate Thursday with the Governors, and continued on Tuesday with the National Assembly and then Thursday with CSOs, PSO, the media and general public in Abuja, is for the purpose of seeking public input into the preparation of the MTEF, and is as recommended by the provisions of the Fiscal Responsibility Act.

The Minister explained that though government’s plan, as set out in the ERGP, is to diversify the economy as soon as possible away from reliance on crude oil proceeds, we need the revenues from crude oil to fund the necessary infrastructure investments that are required to provide the enabling environment for the diversification of the economy into agriculture, manufacturing, construction and services. “You have to use what you have to get what you want”, he stressed.

He also explained that government is aware of the diminishing long term prospects of crude oil, which is why it is important that we maximize the use and exploitation of our petroleum resources now. This was also why Government was determined to move away from exporting raw crude oil but instead to encourage local refining and processing, as well as the local production of the various derivatives from crude oil for which there will continue to be domestic and international demand.

Senator Udoma said the production level of 2.3 million barrels a day projected for 2018 is realizable as we have the technical capacity to produce much more than that. From available statistics from the NNPC, he confirmed that, with the inclusion of our current condensates production of 400,000 to 450,000 barrels a day, “we have been able to produce more than 2 million barrels a day at some periods this year.

“However, average production for the year is still about 1,900,000 barrels a day but with the increasing production we should be able to average more than 2 million barrels by the end of the year.” To sustain high production levels, the Minister said government will continue to intensify efforts at ensuring peace in the Niger Delta region to ensure minimal disruption.

Addressing concerns raised over the level of borrowing and the continued provision for deficit in the budget, the Minister while appreciating the concerns about the growing debt figures, explained that the issue is not so much of a debt problem, but much more of a revenue problem.