By Tony Obiechina, Abuja
| The Federal Government is under intense pressure on how to fund the budgetary deficits of N53.83 billion created by the National Assembly increase of the 2019 Federal Budget by N90.3 billion. The government is also in a dilemma on how to raise additional N102.84 billion to bridge the funding gap created in the budget as a result of the increase. President Mohammadu Buhari on Monday singed the 2019 budget indicating an expenditure profile of N8.92 trillion, which is N90.3 billion higher than the proposed N8.83 trillion budget sent to the National Assembly by the Executive on December 12, 2018. Minister of Budget and National Planning, Udoma Udo Udoma, during the Public presentation of the 2019 Budget in Abuja on Tuesday, confirmed that the increase by NASS has put the government under pressure and would likely lead to an increase in borrowings. The minister noted that Executive revenue assumptions were generally approved and adopted by NASS except the unexplained increases totalling N31.5 billion on some non-oil revenue lines. “NASS increased the budget size by from N8.83 trillion to N8.92 trillion translating to an increase of N90.3 billion. This resulted in an overall increase of N58.83 billion in deficit. “Inexplicably, NASS reduced the proposed borrowing from N1.649 trillion to N1.605 trillion thus creating an overall unfunded deficit of N102.83 billion. To fully find the budget, the level of borrowing may therefore have to increase,” Udoma explained. According to him, allocation for some executive projects on critical appraisal and linked to the ERGP were reduced and a large number of new projects mainly constituency type projects were introduced. The minister said the presidency would engage the 9th National Assembly and its new leadership once they are constituted to effect necessary amendments and to ensure the president delivers on his electoral promises. On how to get funding for the budget, Udoma said the federal government is expecting to generate total revenues of N7 trillion for the funding the 2019 budget; comprising N3.69 trillion from oil revenues and N3.31 trillion from non-oil revenues, while the deficit of N1.92 trillion would be financed mainly by borrowing N1.605 trillion split equally between the domestic and foreign markets. The minister disclosed that the government has projected an ambitious 2.3 million barrels per day on crude oil production, assuring that President Buhari has directed the NNPC to take all the possible measures to achieve the target. Other key assumptions of the budget include: crude oil benchmark of $60/b; Exchange rate of N305/$1; GDP growth of 3.01 per cent and inflation rate target of 9.98 per cent. Explaining further, the minister said the 2019 spending expenditure is expected to be N8.92 trillion.Recurrent non-debt expenditure is pegged at N4.07 trillion; MDA’s capital and capital supplementation is N2.09 trillion; while debt service at N2.14 trillion, is 31 per cent of expected revenues. He put the Capital expenditure, inclusive of transfers GOEs capital and project-tied loans as of percentage of total FGN expenditure at 31 per cent.ReplyForward |
