Presidency reviews 2018-2020 MTEF/FSP
Senate shifts budget debate
The Presidency has submitted an amendment to the 2018 – 2020 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) to the Senate for consideration.This emerged as the Senate announced the postponement of debate on the general principles of the N8.612 trillion 2018 budget proposal.
The upper chamber said the shift was to allow it conclude work on the 2018-2020 MTEF/FSP.In the amendment to the MTEF, the presidency reduced the GDP growth rate from 4.5 per cent to 3.5 per cent.
At an interactive session with the Senate Joint Committee on Finance, Appropriations and National Planning yesterday, Minister of State for Budget and National Planning, Zainab Ahmed, however explained that other key parameters and assumptions like oil benchmark, daily oil production estimates and exchange rate were retained.
She ruled out fears that the adjustments would affect the N8.612 trillion 2018 budget proposal, adding that the adjustments had already been reflected in the 2018 budget estimates submitted by President Muhammadu Buhari to a joint session of the National Assembly on November 7.
She listed some of the adjustments made to the MTEF submitted by the executive to the National Assembly in October.They include the sum of N710 billion to be generated from the restructuring of government’s equity in all the joint venture oil assets; N320 billion additional revenues from revision of terms to improve government take in the Production Sharing Contracts; additional N60 billion from excise duties on cigarettes and alcohol; N305 billion additional company income taxes from the Voluntary Assets and Income Declaration Scheme (VAlDS); N100 billion from improvements by FIRS in the collection of Value Added Tax (VAT); N2.5 billion from special taxes on insurance of luxury cars, as well as surcharge on luxury goods and N250 billion provision as unspent balance carried forward from 2017.
The minister further stated that “The key assumptions on the macro framework is as defined in our MTEF and the only difference in the key assumptions is that we have adjusted the GDP growth from 4.5 per cent. And this is as a result of a meeting we had with you while discussing the last MTEF down to 3.5 percent. But all the other assumptions at 2.3 million barrels per day, oil price of $45 per barrel, exchange rate of N305/$1 are the same.‘’
Explaining how government was able to reduce the deficit to N2.05 trillion, the minister said: “The fiscal deficit is now N2.05 trillion, down by over N940 billion, also pushing the debt/GDP ratio downwards from 2.61 per cent to 1.77 per cent,” she said.
The Minister said the adjustments were the fallout of the recommendations of a committee chaired by Finance Minister, Kemi Adeosun, which identified additional revenue sources of about N1trillion to cut the 2018 budget deficit. But some lawmakers raised serious issues about the budget processes and implementation.
Senator Adamu Aliero (APC, Kebbi State) said: “I find it difficult to understand why the budget for 2017 should be truncated by 31st December when less than 20 per cent of the capital budget has been released. By withholding capital releases, you are more or less contracting the economy.
Chairman of the Senate Committee on Finance, John Enoh, asked: “Why don’t we have anything on interest rate as part of the MTEF document? That will be the best way to talk about aligning the monetary and the fiscal. Why are we putting more than N800 billion at independent revenue when the President admitted in his address to the National Assembly that it had suffered about 74 per cent variance. And yet in 2018, we are still putting more than N800 billion for independent revenue. Are we just balancing the figures? ‘’How do you expect to get the revenue if from the beginning even what you are projecting you know that you can’t make it? He queried.
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