The Federal Government has presented a revised 2018 to 2020 Medium Term Expenditure Framework and Fiscal Strategy Paper (FSP) to the Senate for consideration.
The government specifically adjusted the Gross Domestic Product (GDP) growth rate from 4.5 per cent to 3.5 per cent.
Minister of State for Budget and National Planning, Zainab Ahmed made the disclosure at an interactive session with the Senate Joint Committee on Finance, Appropriations and National Planning in Abuja on Tuesday.
She, however, explained that other key parameters and assumptions like oil benchmark, daily oil production estimates and exchange rate were retained.
The minister allayed fears that the adjustments would affect the 2018 budget proposal of N8.61 trillion.
She added that the adjustments had already been reflected in the 2018 budget estimates submitted by President Muhammadu Buhari to a joint session of the National Assembly on Nov.m7.
Zainab listed some of the adjustments made on the 2018 to 2020 MTEF submitted by the Executive to the National Assembly in October to include: “N710 billion to be generated from the restructuring of government’s equity in all the Joint Venture oil assets.
“N320 billion additional revenues from revision of terms to improve government take in the Production Sharing Contracts; additional N60 billion from Excise Duties on cigarettes and alcohol, among others.
“The key assumptions on the macro framework is as defined in our MTEF and the only difference in the key assumptions is that we have adjusted the GDP growth from 4.5 per cent.
“And this is as a result of a meeting we had with you while discussing the last MTEF down to 3.5 per cent.
“But all the other assumptions at 2.3 million barrels per day, oil price of $45 per barrel, exchange rate of N305/$1 are the same.
“The fiscal deficit is now N2.05 trillion, down by over N940billion, also pushing the debt/GDP ratio downwards from 2.61 per cent to 1.77 per cent,” she said.
The minister said the adjustments were the fallout of the recommendations of a committee chaired by Finance Minister Kemi Adeosun, which identified additional revenue sources of about N1trillion to cut the 2018 budget deficit.
She added: “When the FEC approved the MTEF/FSP, it constituted a Committee, chaired by the Minister of Finance, which was tasked with identifying additional sources of about N1 trillion revenues to cut the 2018 budget deficit and new borrowings.
“The outcome of the work of the committee necessitated a revision of the Medium Term Fiscal Framework (MTFF), which also formed the basis of the 2018 budget proposal.
“This briefing note and accompanying submissions relate to the revised MTEF/FSP and MTFF, which are in alignment with the 2018 Executive Budget proposal, and were part of the documents that accompanied the 2018 Budget laid before NASS”.
Lawmakers who spoke at the session, insisted that the non-oil revenue were unrealistic.
Specifically, they cited the FGN Independent Revenue projection of N807billion for 2017, where only N155.14billion (representing 74 per cent failure) was achieved as of September this year.
The Chairman, Senate Committee on Finance, Sen. John Enoh and a member of the joint committee, Sen. Ibrahim Danbaba (APC-Sokoto), wondered why the same projection was used in 2018.
“Why don’t we have anything on interest rate as part of the MTEF document? That will be the best way to talk about aligning the monetary and the fiscal.
“Why are we putting more than N800 billion as independent revenue when the president admitted in his address to the National Assembly that it had suffered about 74 per cent variance?
“And yet in 2018, we are still putting more than N800 billion for independent revenue. Are we just balancing the figures?
“How do you expect to get the revenue from the beginning even what you are projecting you know that you can’t make it?” Enoh queried.
In his contribution, Adamu Aliero (APC, Kebbi), said: “I find it difficult to understand why the budget for 2017 should be truncated by 31st December when less than 20 per cent of the capital budget has been released.
“By withholding capital releases, you are more or less contracting the economy.”
The development comes as the Senate had revealed that it would approve the 2018 to 2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) this week.
To this end, the debate on general principles of the N8.61 trillion 2018 Appropriation Bill, earlier scheduled for Wednesday and Thursday this week, has been shifted to Nov. 28 and Nov. 29.
MTEF/FSP provides the parameters upon which the budget is prepared.
According to the Fiscal Responsibility Act, the fiscal documents must be approved before the budget is considered.