FG Proposes N1.9trn Deficit in 2019 Budget
As part of efforts to address the budget deficit, the Federal Government has proposed 3.07 percent reduction from N1.95 trillion in 2018 to N1.895 trillion this year.
According to the Minister of Budget and National Planning, Senator Udo Udoma, the deficit is 1.3 percent of Gross Domestic Product (GDP), well within the 3 percent limit set by the Fiscal Responsibility Act.
As for the debt service to revenue ratio, he said as revenue situation improves, the ratio will come down.
“Nigeria does not have a debt problem as such. Our debt is within prudent limits. However, we need to optimise our revenue-generating potential. This will bring down our debt service to revenue ratio. Given the size of our economy, we can, and should, be doing better in revenue generation. This explains our focus as a government on revenues and revenue generation,” he said.
With regard to the complaints that the budget was small, the Minister explained: “Some commentators have complained that the 2019 budget proposal is too small. They would like us to have a larger budget. All of us in government would also like Nigeria to have a larger budget. Indeed, as our revenues grow, we will be able to expand our budget size. In truth, though we have increased our budget size significantly since we took over government in 2015, our budget size is still far too small to meet all our needs.
“However, we are limited by the size of our revenues. Our current proposal for 2019 represents the maximum size that we believe we can prudently fund from our revenue and debt sources. There is no point announcing a large budget that you cannot fund. As we are able to generate more revenues in future, we will be able to continue to increase the size of our budgets,” he said.
Also speaking on the issue of unemployment, the Minister explained that the government was working hard to improve the enabling environment for economic expansion, which would lead to the creation of additional jobs. He was confident that as the various initiatives of the Economic Recovery and Growth Plan (ERGP) continue to be implemented, the government will be able to create jobs at a rate that is much faster than population growth, thereby bringing down unemployment figures.
“Most of these jobs will be created in the private sector particularly in agriculture, construction, manufacturing, trade and services,” he said, pointing out that many of the major economic indices are showing signs of improvement.
Meanwhile, Udoma explained that the Technical Committee on the Implementation of a new Minimum Wage inaugurated last week by President Muhammadu Buhari is to, among other things, identify additional sources of revenue to ensure that government can meet the increased costs that will arise from the implementation of a new minimum wage without affecting government’s ability to meet the other obligations of government, particularly with respect to the ambitious infrastructure development plans of the government.