Fed Govt Generates N4.25trn, Stops 2019 Capital Budget Releases
The Federal Government has ruled out any possibility of releasing additional funds to finance the capital components of the 2019 budget.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, who confirmed this during the public presentation of the 2020 budget in Abuja on Thursday, also disclosed that government’s revenue as of the end of September stood at N4.25tn.
She said that with about 10 days to the end of the year, and with the 2020 budget becoming operational on January 1, it would be practically impossible to make further releases to Ministries, Departments and Agencies of government for capital projects.
She said as of November 12, the Federal Government had released about N1.21tn for capital projects’ implementation.
The 2020 budget of N10.59tn was on Tuesday signed by the President, Major General Muhammadu Buhari (retd.), after it was passed by the National Assembly
The finance minister said that out of the N8.92tn approved in the 2019 budget, about N5.81tn had been spent as of September 30.
She said when compared with the prorated expenditure budget of N6.69tn, the amount released by the government represented 86.9 per cent performance.
Ahmed said debt service and the implementation of non-debt recurrent expenditure, particularly payment of workers’ salaries and pensions, remained on track.
The finance minister said in releasing funding for capital projects, priority was given to critical ongoing projects in rail, roads, power and agricultural sectors.
She said, “We have been able to release N1.2tn; we will not be making any more releases before the end of the year.
“However, there are some in various stages of processing that would be completed. The 2020 budget takes effect from January 1 2020.”
On the Finance Bill, she said when eventually signed into law, not all the provisions of the bill would be implemented from January 1 next year.
She said that before the implementation of requirements for presentation of Tax Identification Number for opening of bank account, the government would have to engage banks on the modality for implementation.
Ahmed said the Finance Bill has about 83 modifications, adding that several of the amendments were meant to improve the business environment especially the small and medium-scale businesses.
She said, “Until the finance bill is assented to and becomes law, the measures we have to take are just plans for now.
“But we are confident that within this week, Mr President will have this bill from the National Assembly and he will normally ask various ministries to review and advise him before he signs.
“Our target is that we start the work on January 1, 2020. I am not saying that every provision in the finance bill will take effect from January.
“We have seen in the papers where people say from January 1, you can’t operate your account without TIN number.
“It does not work that way. That is where we have to engage the commercial banks. The FIRS will engage the commercial banks and work out a modality of how this will be implemented.”
In the area of revenue performance, the finance minister put government’s actual aggregate revenue as of the end of the third quarter at N4.25tn.
This, according to her, is 81 per cent of the prorata target.
Giving a breakdown of the revenue, she said proceeds from oil accounted for N1.44tn; Company Income Tax collection was put at N595.27bn; Value Added Tax; N81.36bn and Customs collections, N184.10bn.
When asked if the government was not concerned about the rate at which Gross Domestic Product grew below population growth rate, she said that the government was doing all it could to boost the growth rate to seven per cent.
She said with the economy growing at about two per cent while population growth rate hovered around three per cent, it would be difficult for the people to feel the impact of government programmes.
She said, “Nigeria must mobilise significant resources to invest in human capital development and critical infrastructure. Given the low revenue to GDP ratio currently at about seven per cent, we must pursue optimal revenue generation.
“I will like to seize this opportunity to call on Nigerians and prospective investors to support in solving Nigeria’s revenue generation problem.
“Indeed, some reforms will be tough but it must be done if we will look at the facts and be frank to ourselves.”
She said the government would continue to engage the public in its activities, including changes in taxes with regard to rates or administration methods.