FG borrows N473bn to pay salaries, overheads & other expenditure - Okonjo-Iweala

The Minister of Finance and Co-ordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, yesterday, put to rest fears of immediate removal of fuel subsidy, as she confirmed that N145.2 billion provision was made for it in 2015 budget.

Speaking to newsmen in Abuja, she said: “I want to clarify that there has been some misinformation that has gone around in the media about the fact that the National Assembly passed the 2015 budget without provision for fuel subsidy. It is not true. It is important  to note that the National Assembly approved the N100 billion provisions for PMS and N45.2 billion provision for kerosene subsidy.

They approved that. So it is not true that they approved the budget without the subsidy. They retained various elements of the first line charges we put in. But let me say that they were based on the above parameters. The gross federally collectable revenue for the federation increased by N169.845 billion. From N9.64 trillion to N9.78 trillion as a result of raising the benchmark price by a dollar.

The minister further stated  that managing the economy since the crash in oil prices had been very tough for her team which had to adopt various strategies to keep the economy running.

She said: “As you know, I have been honest with you since the current economic problems started. I would like to repeat: we have serious challenges, things have been tough since the beginning of the year and they are likely to remain so till the end of the year. We have serious challenges but we also have strengths and if we do the right things we can keep a steady course and emerge out of the current situation.
 “As a result of the 50 per cent decline in oil revenues, the country has faced a difficult cash crunch and the Federal Government has focused on keeping the economy stable and the government running through a series of measures. We have front-loaded the borrowing programme to manage the cash crunch in the economy.

Okonjo-Iweala said the Federal Government had already utilised more than half of the budgetary provisions for borrowing in the year, in the first four months to pay salaries and provide funds for overheads.

Govt borrows N473bn to meet up with recurrent expenditure She said: “Of the N882 billon budgetary provision for borrowing, the government has borrowed N473 billion to meet up with recurrent expenditure, including salaries and overheads. No capital release so far. 

“Traditionally, the first part of the year witnessed low revenue because tax receipts come in from the middle of the year. This has compounded the challenges caused by the steep drop in revenues due to the oil price fall. As a consequence of the revenue challenges, there has been no capital budget release so far this year but we have kept the recurrent expenditure going."

“On the part of the Federal Government; now, Federal Government budget revenue went up from N3.52 trillion from a position of N3.358 trillion so when we sent in the budget, Federal Government revenue was N3.358 trillion. They returned it with a slight difference of N3.452 trillion. 

On the expenditure side, the aggregate expenditure part was higher than what we went in with. The Federal Government went in with a proposed aggregate expenditure of N4.42 trillion and the National Assembly cast expenditure of N4.49 trillion, which was N67.43 billion higher than the proposed expenditure. Debt service was left unchanged at N943.62 billion.

The National Assembly increased statutory  transfers; you know, these are transfers that go to the MDGs like the National Assembly itself, NDDC, UBEC, Human Rights Commission and others. I will not read of these but just know that the National Assembly increased NDDC.

She stated that, “the fiscal deficit was decreased slightly from N1.067 trillion to N1. 04 trillion but the essential thing to note is that the fiscal deficit decreased  from 11 per cent to 1. 09 per cent so this is a difficult budget but a responsible one.