Posted by LERE OJEDOKUN, Abuja on
FEDERAL Government yesterday announced a N1.7 trillion budget estimate for the 2006 fiscal year with plans to forward same to the National Assembly in the third week of next month for approval.
FEDERAL Government yesterday announced a N1.7 trillion budget estimate for the 2006 fiscal year with plans to forward same to the National Assembly in the third week of next month for approval.
In line with President Olusegun Obasanjo's 45th Independence anniversary assurance that there would not be further increase in the current pump prices of petroleum products, until December 31, 2006, government is also proposing N250 billion as subsidy to maintain fuel price stability.
Unfolding the Medium Term Fiscal Strategy Paper for 2006 and 2008, the Federal Executive Council (FEC), which extensively deliberated on the budget proposals, also said N442 billion would be spent on capital expenditure.
While recurrent expenditure was put at N823 billion, pay roll and pensions would gulp N686 billion of the amount while the balance of N137 billion was for overhead cost.
Finance Minister, Dr Ngozi Okonjo-Iweala and Director-General, Budget Office, Mr Olabode Agusto explained details of the proposed fiscal policy to State House correspondents at the end of the council meeting, chaired by President Obasanjo.
Information and National Orientation Minister, Mr Frank Nweke Jnr, his Works counterpart, Chief Adeseye Ogunlewe and Minister of State (Finance), Mrs Nenadi Usman also briefed newsmen on other FEC decisions.
Mr. Agusto said a $33 per barrel of oil benchmark was being projected while the quantity assumption of crude supply to the international market was 2.5 million barrels per day (bpd).
A 9.5 per cent inflation rate, 20 per cent growth in revenue and exchange rate of between N132 and N134 to the United States (U.S) dollars were also being targetted.
On the expenditure level, he disclosed that about 86 per cent growth in the aggregate expenditure was targetted while over N1,000 billion was expected to go into transfers just as N370 billion was being proposed for debt servicing.
"We are looking at about 20 per cent growth in the revenue and it is likely to be driven by increase in oil revenue due to the fact that we are using a higher oil price. So, we are looking at increase in the money available to the ministries to spend which is close to 40 per cent", Mr Agusto stressed.
Providing what he called the "Principal areas of focus" in the coming fiscal year, the director-general posited that of the N250 billion proposed for local oil consumption subsidy, the Federal Government would provide N75 billion and we are hoping that the states and local governments will chip in their own to make it up to N250 billion. We have worked with NNPC to arrive at this estimate of the amount to be provided", he said.
Mr Agusto also stated that "substantial amount" was provided for the Independent National Electoral Commission (INEC) to enable it begin preparation for hitch-free general elections in 2007.
Other priority areas, he stated, include improved spending for the Nigeria Police towards prompt payment of salaries, equipment and barracks rehabilitation.
Others are water provision, healthcare, power and roads as part of strategic plans to improve the economy and social status of the citizenry.
On her part, Mrs Okonjo-Iweala said total projected revenue for the outgoing fiscal year was N1.6 trillion but the National Assembly appropriated N1.8 trillion, noting that in the course of implementation, the revenue was reviewed downward for two reasons.
"One, the oil production had to be revised down from 2.7 million barrel per day to 2.4 million barrel per day and this brought down the amount of revenue available. The second thing is the fact that we have been subsidising the price of petroleum products. Up to this time, we have spent about N192 billion from the Federation Account on the subsidy and it is projected to be N240 billion by the end of the year", she said.
The Finance Minister added that revenue projection was revised down to abut N1.4 trillion from N1.63 trillion, saying the expected revenue was now N1.5 trillion.
She further disclosed that "we still have a deficit" which would be financed through proceeds from the sale of Federal Government houses and privatised companies.
Another FEC decision, according to Mr. Nweke, was the approval of N460.3 million earth dam construction contract in Mashi, Katsina State aimed at alleviating water problems in the area.
On his part, Chief Ogunlewe said council endorsed award of five road contracts valued at N22.7 billion. The road contracts had been terminated by FEC last year.
The road are Nasarawa-Abaji, N4.4 billion with N1.4 billion certified for release for the phase one; Ganye-Sukur-Tungo, N4.7 billion out of which N2.2 billion was released for phase one and Mai-Dikwa-Gambon, N2.9 billion with N626.7 million for the first phase.
Others are Obi-Ozara-Ogbon Mbo-Isiagwu-Enugu-Port-Harcour expressway, N7.9 billion with N1.1 billion authrised for the phase one and Kano-Kaduna road, N2.8 billion.
Government also lifted suspension on manufacturer Export in Bond Scheme and Bonafide manufacturer Assembly Scheme as part of incentives to boost industrial capacity utilisation.