UPDATED: Nigeria’s cabinet agrees to send 2019 budget to parliament

Date:

ABUJA, Dec 7 – Nigeria’s cabinet has agreed to send the 2019 budget to parliament, the budget minister, Udoma Udo Udoma, said on Friday.

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Udoma, speaking to reporters in Abuja, said the president would present the budget to parliament “as soon as possible”, but declined to give further details.

Udoma Udo Udoma said the draft budget assumed an oil price of $60 per barrel and production of 2.3 million barrels per day.

Documents seen by Naija247news from the 2019-2021 Medium Term Fiscal Framework (MTEF) and Fiscal Strategy Paper (FSP) presented by the Budget and National Planning, Senator Udoma Udo Udoma in Abuja

According to the Minister, the 2019 budget will be anchored on a projected total revenue of N7.9 trillion, out of which N3.6 trillion is projected to be realised from crude oil, as against the N2.9 trillion in the 2018 budget.

The proposed 2019 budget is also projected on oil production volume of 2.3 million barrels per day with a crude oil price of $60 per barrel. Exchange rate in 2019 is projected to be N305 to a dollar while inflation rate is projected to be 9.98%. A Real Gross Domestic Product (GDP) of 3.0% is also being targeted in the next fiscal year.

Revenue
A non-oil revenue of N1.385 trillion is projected to be realised in the 2019 fiscal year as against N1.348 trillion in the 2018 budget. In his bid to realise the targeted non-oil revenue in 2019, the Federal Government is projecting an Income Tax of N799.5 billion as against the N794.6 billion in the current fiscal year.

However, government also to hope to raise a Value Added Tax (VAT) of N229.3 billion in the fiscal year, compared to the N207.5 billion in the 2018 budget. The sum of N54.1 billion is projected as the Federation Account Levy as against the 2018 budget figure of N57.8 billion.

Also, nine government agencies (aside NNPC) are expected to generate the sum of N955.3 billion while revenue from independent sources is projected to be N624.5 billion in the 2019 fiscal year, as against N847.9 billion in 2018.

On the expenditure side, the projected 2019 budget will be premiered on a project statutory transfer of N506.8 billion compared to N530.4 billion in 2018 while a sum of N2.144 trillion will be set aside to service Nigeria’s total debt as against N2.013 trillion this year. A sum of N220 billion is also projected for Sinking Fund in contrast to N190 billion in the current fiscal year.

What FG hope to achieve via the 2019 budget
According to the Minister, despite the small size of the proposed 2019 budget, the Federal Government hope to achieve the following:

Getting more revenue, oil and non-oil, by squeezing the maximum from oil, and build up non-oil revenue by an average of 30% up from the previous figure.
Relying less on borrowing and debt, but do more on revenue build up, so that debt service to revenue is brought down.
Increasing the tax to GDP rate which is still very low
Committing more funds to paying pension, gratuities and retirement benefits of retired employees by proposing N527 billion in contrast to N241.9 billion in the 2018 budget.
Giving more priority to human capital development, health and education.
Can the January to December Budget Cycle be met in 2019?
The last time the Nigerian economy really witnessed the January to December budget cycle was during the military era, as the budget has hardly gone through the normal fiscal year cycle, since the fourth republic began in 1999.

Gone are the days when the Nigerian fiscal year budgets were broadcast to the nation by the Head of State on the January 1st, as the budgets in the current dispensation do not get the constitutional National Assembly passage, until several months into the fiscal year which the budget is proposed to be implemented.

The delay in budget implementation reached a crescendo in the current 2018 fiscal year, when the budget was not passed by both Chambers of the National Assembly until six months, after it was presented by the president. As if that was not enough, it took President Buhari another 35 days before finally accenting the 2018 budget. All these delays practically left the economy at a standstill.
Statement from Mr Udoma Udo Udoma, the METF document would be passed to the National Assembly by the end of October while the full budget would be sent in November. However, with 2019 being an election year, it is very unlikely that the 2019 budget proposal will be passed on time.

Godwin Okafor
Godwin Okaforhttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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