Minister of Budget and National Planning, Udoma Udo Udoma (left); Director General, Ministry of Budget and National Planning, Ben Akabueze and Director, Policy, Strategy and Risk Management, Debt Management Office (DMO), Joe Ugoala during the public consultative forum on the 2018–2020, Medium Term Fiscal Framework and Fiscal Strategy Paper (MTFF/FSP) in Lagos.
Minister of Budget and National Planning, Senator Udoma Udo Udoma, at the weekend took the 2018-2020 MTEF and FSP consultations exercise to Lagos where he met with Civil Society Organisations (CSOs), private sector operators (PSO) and the general public.
A statement in Abuja yesterday by his Media Adviser, Mr. James Akpandem, said the minister presented draft proposals for the Medium Term Fiscal Framework/Fiscal Strategy Paper (MTFF/FSP) 2018-2020 and asked for suggestions and inputs which could be considered for inclusion in the final Medium Term Expenditure Framework (MTEF), which would serve as the basis for the 2018 budget.
He pointed out that the proposals he was presenting for the consideration of the general public were drawn from the Economic Recovery and Growth Plan (ERGP) (2017-2020) which is the blueprint guiding all the economic plans of the government.
He reminded them that the ERGP was itself the product of extensive consultations with a broad spectrum of Nigerians, including development experts, top economists and other critical stakeholders. He went on to say that all budgets prepared within the plan period must be drawn from and align with the provisions of the ERGP.
Udoma explained the basis for the key assumptions and macroeconomic framework contained in the proposed MTEF, particularly projections for oil production levels, crude oil price benchmark, exchange rate, inflation rate and GDP growth rate among others. These were all being exposed for consideration and discussion purposes. Accordingly, he welcomed comments and suggestions on them.
The budget minister said the consultations is for the purpose of seeking public input into the preparation of the MTEF, and is as recommended by the provisions of the Fiscal Responsibility Act.
The minister explained that though government’s plan, as set out in the ERGP, is to diversify the economy as soon as possible away from reliance on crude oil proceeds, we need the revenues from crude oil to fund the necessary infrastructure investments that are required to provide the enabling environment for the diversification of the economy into agriculture, manufacturing, construction and services.
“You have to use what you have to get what you want”, he stressed.
He also explained that government is aware of the diminishing long term prospects of crude oil, which is why it is important that we maximize the use and exploitation of our petroleum resources now. This was also why government was determined to move away from exporting raw crude oil but instead to encourage local refining and processing, as well as the local production of the various derivatives from crude oil for which there will continue to be domestic and international demand.
Addressing concerns raised over the level of borrowing and the continued provision for deficit in the budget, the Minister explained that the issue is not so much of a debt problem, but much more of a revenue problem.
According to him, even with our current levels of borrowings the country’s fiscal deficit is still well within the three per cent (3%) limit prescribed by the Fiscal Responsibility Act, and government is continuously monitoring the deficit level to ensure that it remains within the 3% threshold.
Part of the measures he said government is considering to raise the general level of taxes’ collection, is to increase Value Added Tax, and other taxes, on luxury items. For this purpose the Federal Government is consulting the States and the National Assembly. The increase, he emphasized, will not affect general goods and everyday services utilized by the average citizen.