Okonjo Iweala: 28 percent of budget for capital expenses

Okonjo Iweala presents budget 2

File: Okonjo-Iweala presenting the budget to National Assembly: she may need to rejig the budget again

Ayorinde Oluokun/Abuja

Nigeria’s Federal Government on Thursday presented a budget estimate of N4.6 trillion to the National Assembly for the 2014 fiscal year.

Dr Ngozi Okonjo Iweala, the Minister of Finance and Coordinating Minister of the Economy presented the budget estimate to both chambers of the National Assembly separately on behalf of President Goodluck Jonathan.

Lawmakers who embarked on Christmas and New Year holidays immediately after the submission of the budget may not begin work on the appropriation bill until early 2014 when they will resume from office.

Okonjo Iweala told journalists after the presentation that 28 per cent or N1.1trillion of the total budget is allocated for capital expenditure while the recurrent expenditure will gulp N3.5 trillion or 72 per cent of the budget.

She said that the N4.6 trillion is exclusive of the Subsidy Reinvestment and Empowerment Programme
(SURE-P) funds.

The minister added that the budget is targeted at job creation and inclusive growth as it will continue President Goodluck Jonathan’s Transformation Agenda in various sectors of the economy.

Okonjo-Iweala: presents the budget to National Assembly
Okonjo-Iweala: presents the budget to National Assembly

Other assumptions of the budget include benchmark Oil Price of $77.5pb, oil production target of 2.3883mbpd, average exchange rate of N160/$ and real GDP Growth Rate of 6.75 per cent. Also, the fiscal bill has revenue projections of N10.88 trillion as gross federally collectible revenue and gross federally collectible oil and gas revenue of N7.16 trillion.

Total deductions, including cost of crude oil production, subsidy payments, and domestic gas development is N2.15 trillion, same as in 2013 while subsidy payments were maintained at the 2013 level of N971.1 billion. Gross federally collectible non-oil Revenue is put at N3.29 trillion while the Federal Government budget revenue is N3.73 trillion. The expenditure projections include aggregate expenditure (Net of SURE-P) of N4.642 trillion and statutory Transfers of N399.7 billion. INEC’s expenditure is to increase from the N32 billion provisioned in 2013 to N45 billion.

This is to enable the Commission intensify preparations towards the 2014 elections while National Assembly’s allocation is to be maintained at the 2013 level of N150 billion. Also, the provision for debt service is N712 billion from the 2013 level of N591.8 billion while recurrent (non-debt) spending N2.43 trillion down from N2.80 trillion in 2013. Personnel cost increased slightly from the 2013 amendment Budget provision of N1.718 trillion to N1.723 trillion for 2014. The total capital expenditure is 27.29 of the budget down from 31.9% in 2013.

This Ministry of Finance said this is a reflection of increased allocation to pension as well as high wage bill. There is a provision of N268.37 for SURE-P in the budget. The budget has inbuilt fiscal deficit: N911.96 billion which is 1.90 of GDP and a net borrowing requirement: N571 billion, a decrease from N577 billion in 2013.

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According to Okonjo Iweala, the budget has been structured to support growth in areas like agriculture, housing, manufacturing and solid minerals sectors of the economy that have the capacity to create new jobs.

“Job creation is the key to really solving the problems of the Nigerian economy. All the programmes that create jobs are very well supported. The SURE-P is also part of it, community service programmes would be pushed and the YOUWIN programme would be pushed,” said Okonjo Iweala.

“The Infrastructure development is part of it, the Hon. Minister of transport is here, we have been working on rail development. Ministry of Niger Delta is also part of the infrastructure development, Water resources, FCT development and so on.

“We have privatised power but we will be working on the transmission to direct resources there.
“It is a continuation of what we have done before but with more emphasis on really pushing out jobs and also supporting safety nets that can further redistribute income to poor people in the country,” she added.

HIGHLIGHTS OF 2014 BUDGET

• Focus
Job creation
Infrastructure development
Cost of Governance

• Baseline Assumptions
Benchmark Oil Price: $77.5pb
Budgeted Oil Production: 2.3883mbpd
Average Exchange Rate: N160/$, same as in 2013
Real GDP Growth Rate: 6.75%

Revenue Projections
Gross Federally Collectible Revenue: N10.88 trillion
Gross Federally Collectible Oil and Gas Revenue: N7.16 trillion
Total deductions, including cost of crude oil production, subsidy payments, and domestic gas development is N2.15 trillion, same as in 2013.
Subsidy payments were maintained at the 2013 level of N971.1 billion.
Gross Federally Collectible Non-Oil Revenue: N3.29 trillion
FGN Budget Revenue: N3.73 trillion

• Expenditure Projections
Aggregate Expenditure (Net of SURE-P): N4.642 trillion
Aggregate Expenditure (Inclusive of SURE-P): N4.910 trillion
Statutory Transfers: N399.7 billion
INEC’s expenditure is to increase from the N32 billion provisioned in 2013 to N45 billion. This is to enable the Commission intensify preparations towards the 2014 elections.
National Assembly’s allocation is to be maintained at the 2013 level of N150 billion.
The provision for debt service is N712 billion from the 2013 level of N591.8 billion.
Recurrent (non-debt) Spending: N2.43 trillion down from N2.80 trillion in 2013
Personnel cost increased slightly from the 2013 amendment Budget provision of N1.718 trillion to N1.723 trillion for 2014.

Capital Expenditure: N1.100 trillion

Share of Capital in total Expenditure: 27.29% down from 31.9% in 2013 reflecting the increased allocation to pension as well as high wage bill
Share of Recurrent in total Spending: 72.71%
Provision for SURE-P: N268.37 billion

• Fiscal Balance
Fiscal Deficit: N911.96 billion
Fiscal Deficit as share of GDP: 1.90
New Borrowing Requirement: N571 billion, a decrease from N577 billion in 2013