FG revises budget - Subsidy gets N888bn

[DT]

The Federal Government yesterday announced a reduction of the 2012 budget to N4.648 trillion from the initial estimates put at N4.749 trillion and submitted to the National Assembly in December.  Finance Minister Ngozi Okonjo-Iweala, who announced this at a news conference in Abuja, said the reduction of a total N100 billion was made from cancelling non-essential furniture, travelling and training allowances.

She said the budget was also revised to accommodate funds for petrol subsidy following the partial reversal of the deregulation announced on January 1.

The minister said after extensive consultations, the amount required for petrol subsidy was estimated at N656.3 billion, and there was a carryover of N231.8 billion for 2011.

Federal Government's share of the subsidy funds is N309.33 billion, she said.

Under the new budget, which President Jonathan is expected to forward to the National Assembly at a date not specified yet, government expects revenue of N3.460 trillion as against the earlier N3.644 trillion.

Okonjo-Iweala said several steps taken to reduce the budget include increasing the internally generated revenue by N53.3 billion from N393.46 billion to N446.78 billion, and the recovery of about N74 billion by the Pension Task Force.

Transfers to certain agencies were reduced by N25.34 billion and this affects the NDDC and UBEC of N11.14 billion; allocation to NJC was reduced by N10 billion from N85 billion to N75 billion.

Also, allocation to INEC was reduced by N5 billion from N40 billion to N35 billion; and transfers of N802 million to the Human Rights Commission was introduced following the recent amendment to the Human Rights Commission Act.

Service wide votes were reduced by N24.39 billion from N337.08 billion to N312.69 billion; and overhead votes reduced by N17.75 billion from N260.6 billion to N242.85 billion.

The minister said that this comes as a result of 10 per cent cuts across the board, except for security agencies.

There was also a 20 per cent cut in travels and training allocations and 2.5 per cent cut to overhead allocations of ministries and agencies.

Also, capital vote was reduced by N35.53 billion from N1.319 trillion to N1.284 trillion, as a result of the removal of administrative capital items such as procurement of fridges, fans, vehicles, construction of office building (except on-going projects), purchase of land and office furniture, and purchase of computers.

"These efforts result in saving of about N100 billion, with aggregate expenditure coming down from N4.749 trillion to N4.649 trillion; while FGN revenue declines by a net amount of N182.01bn (additional provision of N309.33bn for subsidy minus N127.3bn resulting from effort to boost revenue)," Okonjo-Iweala said.

The deficit of N1.186 trillion will be financed with N10 billion from privatisation proceeds; N75 billion from oil signature bonuses; and domestic borrowing requirement of N794.4 billion

Government is also planning to withdraw N225 billion from the Excess Crude Account, but under partial deregulation this amount would increase by the net amount of the extra subsidy outlay of N81.76 billion to N306.76 billion.

Okonjo-Iweala said that by 2014, foreign debt is expected to hit $14.5 billion and domestic debt N10.065 trillion, thus bringing the total debt profile of the country to $79 billion.

The minister also clarified what the N1 trillion foreign loan the country seeks from foreign donors is meant for.

She said the money will be used to fund "pipeline of projects," and not the construction of pipelines as reported in the media.

She said these projects include the Growth and Empowerment Project to be financed by the World Bank; electricity and gas improvement projects; erosion and water sharing projects in some parts of the country, among others.



DailyTrust