Goodluck Avoid NASS As Iweala Present 2014 Budget

The Federal Government yesterday presented a budget proposal of N4.6 trillion for the 2014 fiscal year to the National Assembly. The proposed budget christened ‘Budget for Job Creation and Growth’ represents N100 billion reduction from the N4.7 trillion that was budgeted for this year.

Capital expenditure is projected at N1.1 trillion representing 27.29 per cent, down from 31.9 per cent in the current year. The reduction in capital expenditure was attributed to increased allocation to pension and high wage bill. The N4.6 trillion expenditure is to be financed from budgeted revenue of N3.37 billion, while the balance will come from N571 billion debt..

The budget is based on  oil price of  $77.5 per barrel and crude oil production of  2.38 million barrels per day(bpd) with an average exchange rate of  N160 per dollar.

The budget was presented by  the Minister of Finance and Co-ordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala who represented President Jonathan. Though she did not give details of the budget and the amount for the recurrent expenditure, highlights of the proposed budget were however later released by the Ministry of Finance.

Speaking to Journalists after  presenting the budget, Dr. Okonjo-Iweala said that the aggregate expenditure of N4.6 trillion excludes the Subsidy Reinvestment Expenditure Programme, SURE-P.

She said, “I felt very privileged, it’s an honour that Mr.  President has asked me to carry out this task in conjunction with my colleagues in the cabinet, and of course, the Director General of the Budget Office supported me to do this great honour.

“This budget is the Budget for Job Creation and Inclusive Growth, meaning that it’s a budget which will continue the President’s transformation agenda for several sectors of the economy. The budget is going to support the push in agriculture.

“It will kick-start the housing sector where we can create more jobs, it is designed for  our policies that would support manufacturing because jobs would be created there. Industries will also be created in solid minerals sector. All these support will continue to be unleashed.  Job creation is the key to really solving the problems of the Nigerian economy.

“Aggregate expenditure excluding SURE – P funds  is about N4.6 trillion and the revenue is about N3.73 trillion.  The capital is about N1.1 trillion and makes up about 27 percent of the budget, the balance of course is the recurrent, and it is about 72 percent of the budget.”

The Minister explained that the distinguishing feature between the 2013 budget and that of the 2014 budget was the focus the government had in continuation of the 2013 budget especially on the area of job creation for the youths and promised that the government was not going to relent in pushing forward.

She said, “All the programmes that create jobs are very well supported, the SURE -P is also part of it, community services programmes would be pushed, the You-Win programme would be pushed.”

The Minister further said that the government would pursue vigorously infrastructural development.

“The infrastructure development is part of it, the Hon Minister of Transport is here, we have been working on rail development. Ministry of Niger Delta is also part of the infrastructure development, Water resources, FCT development and so on.

“We have privatised power but we will be working on the transmission to direct resources there. The distinguishing thing is that it’s a continuation of what we have done before but with more emphasis on really pushing out jobs and also supporting safety nets that can further redistribute income to poor people in the country.”

HIGHLIGHTS:

Baseline Assumptions

Baseline Assumptions
*Benchmark Oil Price: $77.5pb
*Budgeted Oil Production: 2.3883mbpd
*Average Exchange Rate: N160/$, same as in 2013
*Real GDP Growth Rate: 6.75%

Revenue Projections
*Gross Federally Collectible Revenue: N10.88 trillion
*Gross Federally Collectible Oil & Gas Revenue: N7.16 trillion
*Total deductions, including cost of crude oil production, subsidy payments, and domestic gas development is N2.15 trillion, same as in 2013.
*Subsidy payments were maintained at the 2013 level of N971.1 billion.
*Gross Federally Collectible Non-Oil Revenue: N3.29 trillion
*FGN Budget Revenue: N3.73 trillion

Expenditure Projections
*Aggregate Expenditure (Net of SURE-P): N4.642 trillion
*Aggregate Expenditure (Inclusive of SURE-P): N4.910 trillion
*Statutory Transfers: N399.7 billion
*INEC’s expenditure is to increase from the N32 billion provisioned in 2013 to N45 billion. This is to enable the Commission intensify preparations towards the 2014 elections.

*National Assembly’s allocation is to be maintained at the 2013 level of N150 billion.
*The provision for debt service is N712 billion from the 2013 level of N591.8 billion.
*Recurrent (non-debt) Spending: N2.43 trillion from N2.80 trillion in 2013
*Personnel cost increased slightly from the 2013 amendment Budget provision of N1.718 trillion to N1.723 trillionfor 2014.
*Capital Expenditure: N1.100 trillion
lShare of Capital in total Expenditure: 27.29%down from 31.9% in 2013 reflecting the increased allocation to pension as well as high wage bill
*Share of Recurrent in total Spending: 72.71%
*Provision for SURE-P: N268.37 billion

Fiscal Balance
*Fiscal Deficit: N911.96 billion
*Fiscal Deficit as share of GDP: 1.90
*New Borrowing Requirement: N571 billion, a decrease from N577 billion in 2013