FG proposes N8.6trn for 2019, plans tighter fiscal plan

The realities of the struggling state of the Nigerian economy has finally dawn on the Federal Government, as the nation is targeting a tighter fiscal plan for the economy by projecting a budget of N8.6 trillion in the next fiscal year -2019.

The Minister of Budget and National Planning, Senator Udoma Udo Udoma, revealed this at a public consultation on the 2019-2021 Medium Term Fiscal Framework (MTEF) and Fiscal Strategy Paper (FSP) in Abuja.

According to the Minister, the 2019 budget will be anchored on a projected total revenue of N7.9 trillion, out of which N3.6 trillion is projected to be realised from crude oil, as against the N2.9 trillion in the 2018 budget.

Meanwhile, the proposed 2019 budget is also projected on oil production volume of 2.3 million barrels per day with a crude oil price of $60 per barrel. Exchange rate in 2019 is projected to be N305 to a dollar while inflation rate is projected to be 9.98%. A Real Gross Domestic Product (GDP) of 3.0% is also being targeted in the next fiscal year.

A non-oil revenue of N1.385 trillion is projected to be realised in the 2019 fiscal year as against N1.348 trillion in the 2018 budget. In his bid to realise the targeted non-oil revenue in 2019, the Federal Government is projecting an Income Tax of N799.5 billion as against the N794.6 billion in the current fiscal year.

However, government also to hope to raise a Value Added Tax (VAT) of N229.3 billion in the fiscal year, compared to the N207.5 billion in the 2018 budget. The sum of N54.1 billion is projected as the Federation Account Levy as against the 2018 budget figure of N57.8 billion.

Also, nine government agencies (aside NNPC) are expected to generate the sum of N955.3 billion while revenue from independent sources is projected to be N624.5 billion in the 2019 fiscal year, as against N847.9 billion in 2018.

On the expenditure side, the projected 2019 budget will be premiered on a project statutory transfer of N506.8 billion compared to N530.4 billion in 2018 while a sum of N2.144 trillion will be set aside to service Nigeria’s total debt as against N2.013 trillion this year. A sum of N220 billion is also projected for Sinking Fund in contrast to N190 billion in the current fiscal year.

According to the Minister, despite the small size of the proposed 2019 budget, the Federal Government hope to achieve the following:

Getting more revenue, oil and non-oil, by squeezing the maximum from oil, and build up non-oil revenue by an average of 30% up from the previous figure.

The last time the Nigerian economy really witnessed the January to December budget cycle was during the military era, as the budget has hardly gone through the normal fiscal year cycle, since the fourth republic began in 1999.