Abuja – The Minister of Budget and National Planning, Sen. Udoma Udo-Udoma, has said the Federal Government will deploy creative ways to fund the 2016 budget in spite of falling oil price.
Udoma said this when he answered questions from newsmen at a meeting with the Senate Committee on National Planning and Economic Affairs on Monday in Abuja.
He said the government had built some mechanism to address the situation that would be different from the projection in the budget.
The News Agency of Nigeria (NAN) reports that the Federal Government has set a benchmark price of 38 dollars per barrel in 2016 budget proposal.
Meanwhile, NAN learns that a barrel sells for 28 dollars per barrel at international oil market as at January.
The minister said that the government had been looking at the creative and imaginative ways of funding a lot of items in the budget.
“We have asked the various ministries responsible for infrastructure to look at concessioning airports and looking at the railway to be done on the Public Private Partnership (PPP).
“We are looking at various ways we can generate private sector resources to help us fund a lot of items in the budget.
“We believe it is important that the capital elements of the budget are realised,’’ he said.
Udo-Udoma said that the capital element of the budget had to be realised to stimulate the economy, adding that the government had ambitious target.
He said that the government would target certain amount of money on capital projects to stimulate the economy, to create employment and get the people back to work.
“We must get this economy growing and the way to do it is to make sure that those capital projects are realised.
“If there are insufficient funds, then we will look at innovative, imaginative ways of funding those capital projects.”
The minister, however, expressed optimism that the budget was achievable according to the projection from the non-oil revenue sector in the budget.
“President Muhammadu Buhari budget speech states that oil related revenues are expected to contribute N820 billion.
“Non-oil revenues, comprising Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties and Federation Account levies will contribute N1.45 trillion.
“We have projected up to N1.51 trillion from independent revenues from various agencies of government by enforcing strict compliance with the Fiscal Responsibility Act 2007 and public expenditure reforms.
“If we realise recovery, we haven’t projected them into the budget; any recovery from loots will also be used to fund the budget.
“It will help us to reduce the level of our borrowing; so that is the structure of the budget and you can see that oil is not the bulk of the funding for the budget,’’ he said.
According to him, the ministry will have a medium term review of the budget.
Udo-Udoma, however, said the implementation of the Treasury Single Account (TSA) had provided greater visibility of government revenues and cash flows.
He said that excess funds under the Fiscal Responsibility Act were supposed to be swept into the National Treasury, noting that the system had not been working.
“The introduction of TSA has forced all revenues to go through the Central Bank of Nigeria (CBN) which made it easier for us to track all the revenues.
“It is also easier for us to track all the surplus realised from all these agencies and will be swept into the budget and used for the benefits of Nigeria,’’ the minister said.
