FG adjusts fiscal strategy for growth-enhancing sectors

Mathew Dadiya- Abuja

The Minister of Budget and National Planning, Senator Udoma Udo Udoma has said that some slight adjustments had been effected on the 2019 Medium Term Fiscal Framework and Fiscal Strategy Paper (MTEF/FSP)

between when it was approved by the Federal Executive Council and the finalization of the 2019 Budget Proposals.

The Minister disclosed this on Tuesday while briefing Senate Committee on Finance on the 2019 Revenue and Expenditure Projections said the adjustment only affected the expenditure levels as it was done to reflect some unanticipated expenditure items and the consequences of those adjustments.

The key assumptions and macro-framework of the 2019 Budget targets 2.3mbpd of oil production at an oil benchmark price of $60 per barrel;

exchange rate of N305 per Dollar, Inflation rate at 9.98 per cent, Nominal consumption of N119.28 trillion, Nominal GDP at N139.65 trillion and GDP growth rate of 3.01 per cent.

The Minister briefed the Committee on the 2018 expenditure outturns.

He stated that of the total appropriation of N9.12 trillion, N7.24 trillion had been spent as at December 31, 2018; representing 79 per cent performance.

Udoma indicated that Debt Service and the implementation of Non-debt Recurrent Expenditure, including payment of workers’ salaries and pensions, were on track.

He explained that Capital releases only commenced after the signing of the 2018 Budget on June 20, 2018; and as at January 11, 2019, a total of N1.226 trillion had been released for capital projects.

Spending on Capital, he explained further, was prioritised in favour of critical ongoing infrastructural projects in the power, roads, rail and agriculture sectors. “Implementation of the 2018 Capital Budget will continue into 2019 until the 2019 Budget is passed into law,” he pointed out.

The Minister said Government will continue its fiscal strategy of directing resources to most productive and growth-enhancing sectors while efforts will be intensified to increase revenue. “Government will also leverage private capital to supplement capital allocations from the Budget.

Highlights of Government’s fiscal strategy, he enumerated to include enhancing economic growth and ensuring inclusiveness; promoting economic diversification; maintaining macroeconomic stability;

increasing revenue generation; re-balancing the distribution of Government spending; improving quality of spending; and, ensuring sustainable deficit levels.

To achieve these objectives, the Minister said fiscal, monetary and trade policies will continue to be aligned and implemented in a very coordinated manner.

“The strategy recognizes the need to deliberately cushion the effects of adjustments on the poor and vulnerable members in the society.”