The Federal Government has tasked the Nigerian National Petroleum Corporation, NNPC to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day.
This is as key assumptions and micro-framework for the 2019 budget are based on the projection of 2.3 million barrels per day oil production, oil price benchmark of $60 per barrel, exchange rate of N305 to a dollar, 9.98 inflation rate, 119,28 trillion nominal consumption, 139.65 trillion nominal GDP and 3.01 percent GDP growth rate.
Ben Akabueze, Director-General, Budget Office of the Federation released these figures Tuesday during a public hearing on the Medium Term Expenditure Framework, MTEF held by the House of Representatives Joint Committee on Finance, Appropriation, Aids, Loans and Debt Management led by Babangida Ibrahim.
Akabueze said having emerged from recession in the second quarter of 2017, Nigeria is expected to continue to experience growth from 0.8% in 2017 to 2.1% in 2018 and 3.01% in 2019.
On the 2018 performance, Akabueze said, “as at the end of 2018, Federal Government aggregate revenue was N3.96 trillion, which is 55 percent of the budget and which is higher than the 2017 revenue”.
The breakdown according to the Director General, Budget Office was: “oil revenue (N2.32 trillion – 77 percent of budget and 64 percent higher than 2017); Company Income Tax (CIT) of N637, 25 billion (80 percent of budget and 1.7 percent higher than 2017) and Customs Collection of N303, 91billion (94 percent of budget and 16 percent higher than 2017.
“Notwithstanding the softening in the international oil prices in late 2018, the considered opinion view of most reputable oil industry analysts is that the downward trend is not necessarily reflective of the outlook for 2019. Currently, the average Brent oil price projection for 2019 by 32 different institutions with relevant expertise is still about $69/b”.
Akabueze assured Nigerians that the government will continue its fiscal strategy of directing resources to most productive and growth-enhancing sectors while efforts will be intensified to increase revenue, adding that the government will equally leverage private capital to supplement capital allocation from the budget.
“We will closely monitor the situation and will respond to any sustained changes in the international oil price outlook for 2019. Mr. President has directed the Nigerian National Petroleum Corporation (NNPC) to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day.
“The budget proposal seeks to continue the reflationary and consolidation policies of the 2017 and 2018 budgets respectively, which helped put the economy back on the path of growth”.
Speaking on the projected tax revenue for the period and the baseline assumptions, the Executive Chairmen, Federal Inland Revenue Service (FIRS), Babatunde Fowler, said the tax office is optimistic of performing better than 2018
He said: “For the year 2018, the federal government gave the FIRS a collection target of N6, 747 trillion. Analysis of actual collection figures for the year ended December 2018 shows that we collected a total of N5. 320 trillion, which represents 78.86 percent of the target.
“The FIRS 2019 – 2021 revenue framework is based on the 2019 – 2021 Medium Term Expenditure (MTEF) and Fiscal Strategy Paper (FSP). While the collection figure for 2018 were significantly higher than ever before, the FIRS is not resting on it oars and is continuing with the implementation of various measures to ensure that tax revenue collection significantly improves further in 2019.”
According to him, some of the measures, are: Strategic Revenue Growth Initiative (SRGI), tax audit, use of technology (such as VAT Auto Collect, State Offices of Accountant-General Platform), integration with GIFMIS for federal MDAs, eService and Mobile Payment Options, sustained enforcement activities, voluntary assets and Income Declaration Scheme and amendment of tax laws to improve collection.
Hammed Ali, Comptroller General, Nigerian Customs also said strategies are on ground to actualise the 2019 budget target, stressing that “every opportunity that will help in attaining the target shall be employed”.
Ali stated that, “the proposed automation of all forms of manual payment in every Customs formation is geared towards enhanced revenue and budget performance,” adding that “this approach will certainly culture the integrity and sanity of the service operations. ”
“There shall be a holistic assessment and monitoring of all revenues collected on behalf of the service by the various designated commercial banks. This will create avenue for genuine reconciliation of all accrued revenues against claimed remittances to the various designated government accounts”.
Zainab Ahmed, Minister of Finance on her part assured Nigerians that the federal government has evolved a new revenue strategic growth agenda developed by her Ministry to ensure a sustainable revenue flow system.
Ahmed said; “we have identified new revenue streams and we’re working to tap into them, especially the identification of new taxes for which we are working with the FIRS to bring that to fruition, of course with amendment to relevant tax laws.
“We are working now to implement the TSA to cover foreign accounts operated by government agencies in order to broaden the net and minimise leakages.”
Ahmed Idris, Accountant-General of the Federation who disclosed that June 30, 2019 date has been set for the closure of 2019 budget also said Nigeria will not renege on its obligations to foreign and local creditors.
James Kwen, Abuja
