A fiscal deficit of N181 billion is expected in this year's budget resulting from a projected federal government revenue of N1.12 trillion and expenditures of N1.3 trillion, finance minister, Dr Ngozi Okonjo-Iweala said yesterday.
Mrs Okonjo-Iweala said at a ministerial briefing on Budget 2004 in Abuja yesterday that the projected deficit amounted to about two percent of the Gross Domestic Product (GDP) and represented a substantial reduction from past deficits that have averaged 3.5 to 4 percent of GDP.
She said that almost halving the fiscal deficit meant that expenditures were being brought in line with available resources or revenues, implying greater fiscal discipline and said that government had done this by paying more attention to cutting waste and beginning to reduce inefficiency and corruption in government business where possible.
An example, she said, was the saving of N58 million in the MFCT through the weeding out of about 3000 ghost workers by computerising the payroll. "We have also streamlined some agencies, weeding out redundant functions that add no value to government business. There is tremendous waste, corruption and inefficiency in government business. If Nigeria is ever to develop as a modern country, we must endeavour to stamp out much of this and we are on the job," she said.
Dr. Okonjo-Iweala, who said Nigeria had saved about $800 million through checks on inflated contracts, said that the "small" fiscal deficit would be financed through recourse to return of looted funds and other savings.
"We hope to re-discuss with the National Assembly the possibility of raising some money on the domestic capital market as well as towards financing this deficit," she said, adding that about 66 percent of both capital and total budget was targeted at the priority sectors of roads, water resources, power, agriculture, education, health and security, and that while the budget had been crafted to provide for all sectors, the aim was to focus the bulk of resources on priority areas.
She explained that the budget was a practical expression of the NEEDS programme and had a two-pronged objective of providing the basic needs of the people and building a stronger and sustainable economic future for the nation by improving the fundamental indicators of the economy.
The minister also stressed the need to honour debt obligations, saying that while government could not pay off all its debts at once, ministries and agencies have to plan and begin the process of repayment. She said apart from a very small amount of N7 billion in the Ministry of Finance for small contracts, the ministry had decentralised payment of contractor arrears to ministries which owe so they could take proper responsibility and accountability.
She said that government was aiming at a minimum of 80 percent implementation of the budget and would do its best to drive for full implementation of the capital budget unlike in the past when implementation fell as low as 20 to 30 percent.