The Minister of Budget and National Planning, Senator Udoma Udo Udoma, at the 2019 Budget Breakdown Session in Abuja on Tuesday told Nigerians to be hopeful of a brighter future as the seeds of development planted in the last four years are germinating and soon will be bearing fruits.
While acknowledging the patience of Nigerians and the contributions of critical stakeholders like the National Assembly, the Media and other partners, to the development efforts of government, Senator Udoma explained that an economy usually take some time to build up momentum after a period of recession.
He added however that all indices point to the direction of positive growth and the dividends will soon manifest with greater impact as government continues to faithfully implement the provisions of the Economic Recovery and Growth Plan (ERGP), which underpins government’s economic recovery actions.
The Minister pointed to the fact that already the macro-economy has remained largely stable and growth has increased from 0.82% in 2017 to 1.93% in 2018 and 3.01% is expected in 2019, with the continuing implementation of the ERGP. “Real GDP increased from 1.89% in Q1 of 2018 to 2.01% in the first quarter of 2019 - the strongest first quarter growth since 2015; Significant growth has been recorded in the non-oil sector: 2.47% growth in Q1 2019, up from 0.76% in Q1 2018 and diversification efforts have continued as contribution of the non-oil sector to GDP increased from 90.4% in Q1 2018 to 90.9% in Q1 2019”.
Senator Udoma said that a lot has been done by the Buhari administration in the first four years and the second term will be focused on building on the initiatives and development efforts already put in place. “The 2019 budget is designed to further reposition the economy on the path of higher, inclusive, diversified and sustainable growth; and to continue to lift significant numbers of our citizens out of poverty”.
The 2019 budget proposal was presented to the National Assembly (NASS) by President Muhammadu Buhari on December 19, 2018; and passed by the NASS on May 9, 2019. The President signed the budget into law on Monday May 27, 2019. The total budget outlay for 2019 is N8.92 trillion.
According to him, the 2019 Budget seeks to continue the reflationary and consolidation policies of the 2017 and 2018 Budgets respectively, which helped put the economy back on the path of growth. On the expenditure side, allocations to Ministries, Departments and Agencies (MDAs) of Government were guided by the three core objectives of the ERGP: Restoring and sustaining growth; Investing in our people, and Building a globally competitive economy.
Acknowledging that Nigeria faces significant challenges with respect to revenue generation, he assured that government is taking every necessary steps to tackle challenge. “Key reforms will be implemented with increased vigour to improve revenue collection and expenditure management. Mr. President is committed, and has directed that all measures necessary be taken to ensure that we grow rapidly while maintaining fiscal sustainability. To ensure that this happens, the President set up a Projects and Programmes Committee which has concluded its work. The initiatives developed by this committee will be rolled out as the President enters his second term.”
Government, he said, will continue to create the enabling environment for the private sector to increase investment so as to increase productivity, create jobs and stimulate further growth.
To continue to fund the budget, the Minister said apart from initiatives in other sectors, the Federal Government has also sustained its efforts to improve public financial management through the comprehensive implementation of the Treasury Single Account (TSA), the Government Integrated Financial Management Information System (GIFMIS) and the Integrated Payroll and Personnel Information System (IPPIS). The President has also directed that work should be concluded on the deployment of the National Trade Window and other technologies to enhance Customs collections efficiency.
Speaking on the adjustments made by the National Assembly, he said:
· Executive revenue assumptions were generally approved and adopted by NASS, except for unexplained increases totalling N31.5 billion on some non-oil revenue lines.
· NASS increased the budget size from N8.83 trillion to N8.92 trillion, translating to an increase of N90.33 billion
· This has resulted in an overall increase of N58.83 billion in deficit. Inexplicably, NASS reduced the proposed borrowing from N1.649 trillion to N1.605 trillion, thus creating an overall unfunded deficit of N102.83 billion. To fully fund the budget, the level of borrowing may therefore have to increase.
· Allocations for some executive projects based on critical appraisal and linked to the ERGP were reduced and a large number of new projects, mainly constituency type projects, were introduced.
· Mr. President intends to engage the leadership of the ninth National Assembly, as soon as it emerges, to effect any amendments necessary to ensure he delivers on his electoral promises.
· Mr. President also intends to seek the support of the leadership of the NASS for a smoother, faster budget process going forward and their collaboration to return to a January-December fiscal year.
On the issue of unemployment, the Minister said although statistics show that unemployment and underemployment remain high in Nigeria, “we can expect reduction in the rate of unemployment as we continue to implement the policies and programmes of the ERGP, which are directed at creating more diversified and inclusive growth. Mr President has indicated that the focus of his second term will be employment generation,” he added.
Special Adviser (Media and Communication) to the Hon. Minister