Posted by By Ihuoma Chiedozie, Abuja on
The Federal Government has proposed a budget of N1.9trillion for 2007.....
The Federal Government has proposed a budget of N1.9trillion for 2007.
The proposal, which will be presented to the National Assembly as 2007 Appropriation Bill, was considered and approved by the Federal Executive Council during its meeting in Abuja on Wednesday.
The FEC, also approved the payment of N75billion to about 300,000 pensioners nationwide, as well the Fiscal Strategy Paper, which contains the medium term revenue and expenditure framework for 2007-2009.
The Minister of Finance, Mrs. Nenadi Usman, and the Director-General of the Budget Office, Mr. Bode Augusto, who briefed journalists on the outcome of the meeting, said that the major areas for expenditure in the 2007 budget would be power, water, education, health and works.
However, they did not reveal the benchmark for crude oil sales on which the budget was based, nor the amount budgeted for capital and recurrent expenditures.
They said that the 2007 budget has few differences from the 2006 budget, which has so far recorded a 40 per cent implementation level.
The 2007 budget is expected to attract a deficit of about one per cent of the Gross Domestic Product.
Nenadi said, "We do not foresee that there would be much of an increase in the budgeted figure.
'We still believe that we will keep it at about N1.9trillion again and some people may wonder why is this so? It is basically so because there are some expenditures which we incurred this year which are of a one-off kind.
'So, next year, we would not have such expenditures."
She explained that more funds would be allocated to the Independent National Electoral Commission, the National Population Commission and payment of local contractors.
Explaining the Fiscal Strategy Paper, Nenadi said, 'The aim and the objective of having this fiscal strategy paper in place is just to ensure that our planned spending is set at a very prudent and sustainable level.
'This planned spending will be consistent with our overall fiscal objective which we have tried to carry along from the last few years".
On his part, Augusto said, "Essentially, we are talking about aggregate spending of N1.9trillion. It is actually a one per cent increase on a year and year basis.
'But if you look at the breakdown by the major expenditure heads, you have about N100billion in 33 transfers.
"We have a little bit over N200billion in debt service that is largely domestic and N1.6 trillion for the ministries, departments and agencies to spend.
'There has been no material growth on a year and year basis because there are some major expenditure that we incurred in 2006 that is not going to repeat in 2007 and these are the Independent National Electoral Commission because the bulk of the spending for the 2007 elections has been done already this year.
'Second is the National Population Commission because census has already held this year.
'Thirdly, we have contractors that we are spending N27billion to clear their arrears.
'And lastly, we have the petroleum subsidy of N75billion this year. The level of subsidy is not likely to be as high as that of next year.
'So all these, will lead to healthy increases in what the ministries, departments and agencies will spend.
"The major ministries that are receiving the bulk of the money will be education, health, power, works and water.
'We are also looking at a deficit of no less than one per cent of the GDP next year."
However, Augusto hinted at a possible increase in the prices of petroleum products next year.
He said,'You remember that the President promised that for the whole of 2006, there would be no increase in the pump price of gasoline and other products.
'You will also notice that the price of crude has been going up as much as $70 per barrel.
'So, clearly there will be need to make some adjustments but again, it is left to the President to decide the level of adjustment he wants to make".
Reviewing the 2006 budget, he said, "For 2006, the Appropriation Act authorised an aggregate spending of N1.9trillion for the Federal Government and this is made up of statutory transfers of N92billion, debt service of N290billion Expenditures of the ministries, departments and agencies stood at N1.5trillion".
In the fiscal strategy paper for 2007, which is expected to be passed to the National Assembly next week, the Federal Government approved N230billion for debt servicing.
He said that foreign debts servicing would take N80billion and domestic debts, N150billion.
On preparations for the passage of the 2007 budget, Augusto explained, 'We have had informal discussions with the members of the Appropriations Committee of the National Assembly and we will formally transmit the document of the Physical strategy Paper before the end of this week.
"We will also begin to talk with the Organised Private Sector, civil society about the budget.
'The ministries, departments and agencies have also been advised of their expenditures".