COORDINATING Minster of the Economy and Minister for Finance, Dr Ngozi Okonjo-Iweala, yesterday shed more light on the 2015 budget.
Addressing journalists in Abuja, the Minister said the 50 per cent decline in oil revenues has forced the country into a difficult cash crunch with the result that the Federal Government now focuses on keeping the economy stable.
According to her, the Federal Government, in response to the challenge, instituted a series of measures, including front-loading of borrowing programme to manage the cash crunch.
“Out of the N882 billon budgetary provision for borrowing,” she said, “the government has borrowed N473 billion to meet up with recurrent expenditure, including salaries and overheads.
“Traditionally, the first part of the year witnesses low revenue because tax receipts come in from the middle of the year. This has compounded the challenges caused by the steep drop in revenues due to the oil price fall.”
Okonjo-Iweala also explained that the subsisting revenue challenge has made it difficult for government to effect capital budget release “so far this year.”
In spite of this challenge, according to her, government has managed to keep the economy stable to the point that the Nigerian economy is projected to grow by 4.8 per cent this year.
“One positive feature despite the clear challenges is the fact that food prices, though inching up are still quite stable. Also inflation is still in single digits. This has helped to reduce some of the pressure that Nigerians are going through·
“We also have the advantage the we are an asset rich country and that is a definite strength. It is a challenging time and requires daily, weekly and monthly management to keep the country going and that’s what we have been doing.
On the budget parameters and aggregate revenue. Okonjo-Iweala said, “the NASS passed a benchmark oil price of US$53 per barrel ($1 higher than the Budget proposal; generating an extra revenue of N54.25 billion for FGN). Other key parameters driving the oil revenue side of the budget were retained: oil production volume of 2.2782mbpd and exchange rate of N190/$.
“It is important to note that the NASS approved the N100 billion and N45.52 billion provisioned for fuel and kerosene subsidy proposed by the Executive.