Medium Term Expenditure Framework for 2017-2019, which is the document that will guide the preparation of the budget for that period, will be ready and submitted to the National Assembly by October, the Federal Government has said.
The Minister of Budget and National Planning, Senator Udo Udoma, disclosed this on Monday at a stakeholders’ consultative forum with civil society groups on the 2017-2019 MTEF.
Udoma explained that due to the volatile nature of crude oil in the international market, the Federal Government would be using a conservative figure as the benchmark oil price.
The benchmark figures are $42.5, $45 and $50 per barrel for the 2017, 2018 and 2019 fiscal periods, respectively.
The exchange rate upon which the budget is to be anchored, according to him, will be pegged at N290 to the dollar for the period.
He said, “Demand and supply factors are expected to keep crude oil prices low in the medium term compared to the period prior to mid-2014. We are considering a conservative oil price benchmark of $42.5 per barrel for 2017, $45 per barrel in 2018 and $50 per barrel in 2019.
“We estimate oil production to be 2.2 million barrel per day for 2017, 2.3 million barrel per day in 2018 and 2.4 million barrel per day for 2019. We have pegged the exchange rate for 2017, 2018 and 2019 at N290 to a dollar.”
The minister also said that from the 2017 fiscal year, the government would use recoveries made from misappropriated funds to finance the budget.
He said a significant increase in non-oil revenue receipts was being expected owing to the fact that the economy would experience gradual recovery.
Udoma stated that the Federal Government would propose a total sum of N7.41tn as distributable revenues in the 2017 fiscal year, while N7.85tn and N10.16tn were the revenue projections for 2018 and 2019, respectively.
He said, “A significant increase in non-oil revenue receipts is projected due to a gradually recovering domestic economy and government’s expected improvement in Federal Inland Revenue Service tax collection efforts. Company Income Tax is projected to increase from N1.79tn in 2016 to over N1.86tn in 2017 and beyond.
“Value Added Tax collections are to increase by about 42.4 per cent in 2017. Operating surpluses projection has been moderated downwards for 2017 and thereafter a modest growth. Customs collections are projected to moderate downwards for 2017 and thereafter a modest growth.”
On progress so far made in the 2016 budget, Udoma said out of the N6.07tn budgeted as total expenditure, the Federal Government had so far released the sum of N2.1tn.
He added that out of the projected revenue of N1.043tn from statutory revenue for the first half of the year, only N646.34bn was realised, while N52.570bn was realised from VAT from a projection of N99.12bn for the same period.
Out of the N2.1tn so far spent, the minister said debt servicing gulped N598.6bn; statutory transfer, N175.68bn; pension and gratuity, N79.18bn; and personnel cost, N891.31bn, among others.
He added that the sum of N253bn was released for capital projects.
Some of the representatives of the civil society groups, who spoke at the event, called on the Federal Government to learn from the mistakes made with the 2016 fiscal document.
For instance, the Lead Director, Centre for Social Justice, Mr. Eze Onyekpere said, “We have all seen that the revenue projections for 2016 were over optimistic. This is why we are finding it difficult to get money to fund the budget, especially the capital expenditure.
“From 2017 onwards, we should be more empirical in our revenue forecast. Let it be more realistic so that there won’t be a deviation of more than minus or plus five per cent. This is because if we have more money, we can do supplementary budgets rather than have an overly optimistic revenue projections and at the end of the day, we are not able to fund our budget.”
The Governance Programme Manager, Actionaid Nigeria, Mr. Obo Effanga, reminded the government of the limited time it had to fulfil its electoral promises.
He said, “This administration has a four-year period and one year has gone already, and even the government has admitted that the last year will be given to politics; so, effectively, they have just two years left.
“And we are preparing the budget for one of the two years remaining; so, if we don’t make sure that this works very well, it means that we can only look up to 2018.”