The federal government is set to begin full implementation of the 2013 budget, having succumbed to pressure from the National Assembly to accept the $79 per barrel crude oil benchmark and the N4.98 trillion expenditure approved by the legislature.
The minister of finance and coordinating minister for the economy (CME), Dr Ngozi Okonjo-Iweala, who briefed the media on the 2013 budget yesterday in Abuja, said the government was moving ahead to implement the 2013 budget despite that the issue of zero allocation to the SEC remained unresolved.
As part of implementation plans, the minister said that the first-quarter funds would be released next week, soon after the Federal Account Allocation Committee (FAAC) meeting.
On the contentious issues in the 2013 budget, Okonjo-Iweala said an amendment bill would soon be sent to the National Assembly to address the grey areas.
She said the bill would address three main outstanding issues such as reduction in personnel cost, reallocation of capital expenditure by lawmakers, and reallocation of the budget for the Subsidy Reinvestment and Empowerment Programme.
The minister said, "When we reviewed the National Assembly's version, there were several challenges which had to be revisited. There were three main challenging areas, namely: reductions in the wage bill, major capital expenditures which had been re-allocated, and reallocations of the budget."
Indications also emerged that the Securities and Exchange Commission (SEC) would likely go without allocation this year. The finance minister said, "The SEC budget will not prevent us from moving forward on implementation of this budget.
This is the budget of a country and we cannot allow one issue to derail it. So we have been having these discussions and we will continue to talk with the National Assembly to look at that, but we have all decided to move forward on the issue of the budget implementation."
The FG also restated its commitment to the development of critical economic and social sectors of the economy in the 2013 budget by making substantial capital allocations to security, critical infrastructure and human capital development in the fiscal year.
When asked how they would cope with a $79 benchmark for the 2013 budget, Okonjo-Iweala said "prudence is what a country that is so dependent on one commodity must exercise at all times. You know we need to build a buffer; we have said it all but, at the end of the day, we have a collaborative process and, in that process, we thought that, well, the biggest challenges we face in the budget have now appeared and the National Assembly is willing to constructively work on that".
She added, "We feel that, for the purpose of moving both this budget and Nigerians forward, we said OK, we will live with this benchmark and then next year we would have another, hopefully a more collaborative way of setting a benchmark that will work for all of Nigerians.
"So, we have accepted it; we will try to mitigate the risks by looking at how to strengthen our buffers -- both ourselves and the Central Bank should see the risks going down and then, next year, we will look better."
Details of the budget as approved by the NASS, which the presidency is implementing, includes a total expenditure profile of N4.98 trillion comprising statutory transfers of N387.98 billion, debt service provision of N591.76 billion, recurrent expenditure of N2.38 trillion, and capital expenditure of N1.62 trillion.
The CME said the budget amendment would address three main challenging areas, namely: reductions in the wage bill, major capital expenditures which had been re-allocated, and reallocations of the budget for the SURE-P programme. None of these captures the SEC allocation, which the NASS has vowed not to renege.
The finance minister also revealed that President Goodluck Jonathan has assigned the minister of special duties to supervise the implementation of the N100 billion constituency projects.
Speaking on the appropriation, Okonjo-Iweala said the budget is to promote the continuity of the four main pillars on which the 2012 budget was based, namely: macroeconomic stability, structural reforms, governance and institutions, and investing in priority sectors, and also continues the theme of fiscal consolidation with inclusive growth.
Giving a breakdown of the assumptions of the appropriated 2013 budget, the finance minister stated that "the gross federally collectible revenue is projected at N11.34 trillion, of which the total revenue available for the federal government's budget is forecast at N4.1 trillion, representing an increase of 15 per cent over the estimate for 2012".
Some key allocations in the 2013 budget are: critical infrastructure (including power, works, transport, aviation, gas pipelines, and Federal Capital Territory) - N497 billion; human capital development (i.e. education and health) - N705 billion; and agriculture/water resources - N175 billion.
The finance minister stated that there was no tinkering with the over N950 billion allocated for national security purposes, composed of: N320 billion for the police, N364 billion for the armed forces, N115 billion for the Office of the NSA, and N154 billion for the Ministry of the Interior.
For 2013, the minister of finance disclosed that the "SURE-P programme has a projected allocation of N180 billion, augmented by the 2012 unspent balances of N93.5 billion. This amount will be used to make further progress in the provision of social safety net schemes, maternal and child health care, youth development and vocational training for Nigerians".
She said fiscal deficit is projected to improve to about 1.85 per cent of GDP compared to 2.85 per cent in 2012, well within the threshold stipulated in the Fiscal Responsibility Act, 2007, and clearly highlights government's commitment to fiscal prudence.
While non-oil revenue is projected to sustain its growth in 2013, the federal government appears to be not too happy with the performance of the Federal Inland Revenue Service (FIRS) which, it said, only "worked hard to achieve a 20 per cent growth rate in non-oil tax revenues between 2007 and 2012".
Though the finance minister commended the FIRS for this effort, she said she believed that "the gap between non-oil tax revenues currently collected and the full potential revenue remains significant".
Government, she said, "will support FIRS this year to embark on further reforms such as improving auditing checks, increasing controls on exemptions, and enforcing repayment of arrears.
Similarly, we will also pay greater attention to increasing internally generated revenues, and work with government entities to increase their remittances to the treasury".