The federal government said that the 2019 budget would enjoy significant funding from recoveries from looted funds and the sale of public assets. Finance Minister, Hajia Zainab Ahmed, who spoke on the funding options opened to the government at an interactive session with journalists in Lagos at the weekend, identified them as recovered loot, foreign and domestic borrowing. She said: “The 2019 budget has defined all of its funding options and if you look at it, the funding options are government revenue – oil and non-oil and independent revenues.
“Then recoveries from looted funds as well as the sale of government assets and borrowing – foreign and domestic. It is detailed out and each with a specific target defined in the budget.” Ahmed, however, said that N4.04trillion of the budget would be spent on salaries and other routine operational expenditures of Ministries, Departments and Agencies (MDAs). “The 2019 budget has size of N8.83trillion.
There is oil revenue of N3.73trillion, non-oil revenue of N1.3 trillion and other revenues – N1.2trillion. “But, on the expenditure side, we have debt service which is N2.1 trillion. We have recurrent expenditure – salaries and other routine operational expenditure of MDAs at N4.04trillion, capital expenditure stands at N2trillion and statutory transfers at N492billion,” the minister said.
Ahmed explained that Nigeria has to borrow despite the huge Internally Generated Revenue (IGR) because of the funding shortfall in the budget. She continued: “What we have as a deficit is a total expenditure less to our projected revenue in the budget.
The difference that the revenue cannot finance is the deficit and that can only be financed either by selling some assets, recoveries such as what anti-graft agencies are doing or by borrowing locally or internationally.
“The Nigeria Customs Service (NCS) and the Federal Internal Revenue Service (FIRS) total revenue in 2018 was N6.8 trillion whereas the total expenditure is N9.1 trillion.
The deficit is the difference between the expenditure that you plan to incur and the revenue you plan to generate and the financing of the deficit can be met through borrowing or any of the options stated.
“That is why we have to borrow because we have a definite amount which cannot be covered by recoveries of looted fund or covered by sale of assets and so on. The difference we will borrow. The same thing that happened in 2018 will happen in 2019 and that is how we structure any budget,” Ahmed said.
The minister who described the country’s budget cycle as “nightmare for the executive” urged the legislative arm to fast-track the passage of the 2019 Appropriation Bill. The budget cycle, according to the minister, “is literally a nightmare for us in the executive.
Unfortunately, we are not in control of when the budget is passed by the National Assembly. “Yes, the requirements by law is that the executive should submit the budget by September to the National Assembly so that by December the budget will be passed and by January we start implementing it, but in the first year, we submitted the budget in December because the ministers were sworn in in November; the second year was October and third year in November, but in all of these periods, the average number of months for the budget to be completed and passed increased. “When the 2018 budget was passed to the National Assembly we had an understanding because they also were concerned about the lateness in the passage of the bill and we were hopeful that the budget would be passed in December or January,” Ahmed said.
The minister is hopeful that the 2019 budget will be passed in good time as she insisted that the budget cycle must return to January to December in the interest of the economy. “This is another budget that is before the National Assembly and we are hoping that the story will be different even in terms of reporting, especially for the Ministry of Finance.
It’s very awkward because you will be reporting recurrent expenditure which starts from the first of January because you have to pay salaries and provide running cost to the MDAs and then will be reporting capital expenditure from whenever it is passed; so it’s very difficult for reporting and preparing the physical account and we hope that if not this National Assembly, the next one will work with us to at least start by reducing the average period to six months to pass the budget.
“It is very important that we reach the January-December cycle because government budget might be 10 percent of the Gross Domestic Product (GDP) of the economy and it serves as the trigger for private sector decision-making as well as investment which have very fundamental effects on the performance of the national economy,” she stated.