DIRECTOR general, Budget Office of the Federation (BoF), Mr Ben Akabueze has disclosed that aggregate public expenditure in Nigeria is the lowest in Africa.
President Muhammadu Buhari had in December 2018 presented a budget proposal of N8.83 trillion to a joint session of the National Assembly for 2019.
According to him, although the Federal Government is the biggest actor in the economy, what it spends per annum is at best half of what it should spend.
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Speaking at a roundtable titled Business Opportunities in 2019 Budget organized by Abuja Chamber of Commerce, Industry, Mines and Agriculture (ABUCCIMA) on Wednesday, Akabueze said opportunities abound in the budget for agriculture, food security and the entire value chain including supply of inputs; diversification within the oil and gas industry into refining, mid-stream sector, petrochemicals, gas, fertilizers.
In addition, private sector participants may also take advantage of opportunities in the power sector; transport infrastructure; Micro small and medium enterprises (MSMEs); manufacturing; solid minerals; special economic zones where the government intends to build specific infrastructure across the country; and export expansion grant.
Others may also explore avenues presented by recapitalisation of Bank of Industry (BoI) and Bank of Agriculture including the N10 billion grant for BoI as subsidy on lending to small businesses; and liberalisation of mobile money.
Akabueze who agreed that there were still challenges despite the economy crawling out of recession said for the unemployed the economy has not improved.
“Until the economy begins to grow from at least seven percent to the double digits, majority of Nigerians may not know that the economy has moved out of recession and is actually growing. No victim of unemployment will actually believe that the economy is growing.”
On the 2019 budget revenue projection, the DG Budget insisted “2.3 million barrels of oil per day projection is realistic”, adding “Nigeria presently has the capacity to produce 2.5 million barrels of crude per day.
“The technical inhibition to production in the past included funding of oil ventures.
Government’s failure to meets its joint venture cash calls obligations limited production but there is a new funding arrangement which guarantees funding for whatever joint venture partners needed for production.
“Arrears of JV operations stood at $6 billion by December 2015 has been negotiated and now the IOCs have renewed confidence.
“There are also a number of new oil fields coming on stream The Engina Oil Field with capacity for 200,000 barrels per day started production by the end of December 2018.
“Current production is 2.1 million barrels of oil per day but we believe that NNPC and its partners; since we have resolved funding and security issues in the Niger Delta.
“NNPC has also been allowed to spend N125 billion on pipeline security in the last 12 months. So if you provide the security, provide the funding, there is no reason why they should not meet the target.”
According to him, oil price benchmark of $60 per barrel for 2019 is also realistic “there are 32 global expert institutions whose job it is to track the oil market and make price projections.
“Even now that they have reviewed their projections, their average is still $69 per barrel. Nonetheless, since the budget is a process, before National Assembly finalizes its work on the budget, if there is any need for adjustment, we will make it.”
Akabueze also disclosed that government plans to reduce its equity in oil business to 40 percent. Selling down oil assets ownership from 57.5 percent to 40 percent is projected to yield N710 billion in 2019.
In his remarks, President, ABUCCIMA, Prince Adetokunbo Kayode SAN said the essence of the roundtable was to exchange ideas without recriminations or attacks or finger pointing, no offence and no defense.
“I thank the DG Budget by giving us the facts by not hiding anything. We have done too much of finger-pointing in this country and we now want to move forward. In the next two months, elections will be over but Nigeria will remain a continuum forever.
“There are so many issues: how do we move our budget; strategy of budgeting. How do we get our budget process to be efficient such that whatever happens, the process will remain uninterrupted?
“Whether the Senate is closed or the Speaker is not happy or the President is receiving medical treatment abroad or otherwise engaged, the process goes on? We need to support the government to begin to do that.
“And I agree with him that the budget is just a minute national expenditure. The bulk of our economy is in the hands of the private sector but there are two critical issues: The private sector that is responsible for a minimum of 88 percent of the economy is not engaged in the budget making process.
“That has to change. This is not accusing the government of not doing the right thing but assisting it in instituting a system that will allow that to happen.”
He explained that the second issue is that budget making is an expression of policy.
“And policy is the underlying factor in everything. That we are not making adequate revenue from solid mineral is a matter of policy.
“How come our mining is still limited to artisanal mining? It is policy. Do you know that taking any gemstone from Nigeria is prima facie illegal? Prima facie because the process of making it legal is so cumbersome. It is so expensive to obey the law. It is cheaper to disobey it.”
