The Minister of Budget and National Planning, Udo Udoma, has explained why the federal government proposed a smaller 2019 budget than that of 2018.
Speaking at a public hearing on the 2019 budget on Wednesday, Mr Udoma said the cut was necessary to manage the debt of the country.
While the 2018 budget was N9.1 trillion, the 2019 budget was reduced to N8.8 trillion.
"Even the 9.1 trillion (2018 budget) is small given the needs of the country. We have to make sure that the budget can be financed and it is to ensure that we do not increase the level of borrowing that is why we have brought down the budget size so as to keep the deficit within the financeable limit. That is why we have a budget of 8.8 trillion," he said.
Mr Udoma said the government decided to increase the recurrent expenditure of 2019 to enable it to pay pensions and the new minimum wage.
He added that the emphasis of the budget is on completion of the 2018 budget.
The minister said the 2018 budget performed well as recurrent expenditure was fulfilled 100 per cent while capital releases stood at N1.226 trillion.
He said the federal government had realised N3.96 trillion as at the end of 2018, forming 55 per cent of projection. Of this amount, N2.32 trillion was derived from oil.
Other sources of revenue include; Company income tax N637.25 billion, Value Added Tax (VAT), N148.92 billion and customs collection of N303.91 billion
Mr Udoma said the federal government will not alter the oil benchmark which was pegged at N60 dollars per barrel despite recent fall in prices. He noted that the executive will liaise with the National Assembly if eventually there is a need for a review.
"On our own analysis, and we consulted extensively working with NNPC, our analysis was that the downward trend in oil prices was just for short term, that oil prices will average about 69 to 70 dollars. So, we felt that 60 dollars was a fair price.
"So far, it looks as if we are correct. Oil price is now at 65 to 66 dollars. However, the president did say, that we will continue to monitor. We will engage the National Assembly, even as we are processing the budget if we get information that this price is not feasible, even now as we are considering the budget. But for now, there is no reason to reduce the price from 60 dollars.
He urged members of the National Assembly work in cooperation with the executive to achieve the January-December budget cycle.