2019 Budget Proposals: Federal Government To Finance N1.859 Trillion Deficit By Domestic, External Borrowings

Udoma

***Proposes N3.12 Trillion Capital Budget

By CLEMENT NWOJI, Abuja

The Federal Government has said that the N1.859 trillion deficit in the N8.83 trillion 2019 budget proposal will be equally financed through external borrowing and domestic sources.

It explained that the projected deficit is within threshold stipulated in the Fiscal Responsibility Act (FRA) 2007 at 1.33 percent of the Nation’s Gross Domestic Product (GDP).

The Minister of Budget and National Planing, Sen. Udoma Udo Udoma, gave these explanations on Thursday while unfolding to the public the details of the 2019 Budget proposals presented to the National Assembly by President Muhammadu Buhari, Wednesday.

According to him, the “Budget deficit is to be financed mainly by borrowing N1.649 trillion. – Domestic sources N824.82 billion. – Foreign sources (gradual shift away from commercial to more concessionary financing) N824.82 billion”

On the contentious increase in minimum wage, the Minister assured that provision had been made for it in the budget proposals even though he was not specific how much was provided for it.

He expressed the Government’s commitment to it disclosing that
a high-powered Technical Committee had been set up to advise on ways to: “ensure that the attendant wage adjustments for those already over the Minimum Wage can be funded without increasing the level of borrowing; implement these consequential adjustments in such a manner as to minimize their inflationary impact.”

Sen. Udoma did not however give a timeframe within which the increase in minimum wage would be effected.

Further, he said the aggregate capital budget is N3.12 trillion, representing 30 percent of the total FGN proposed expenditure for 2019.

He said the N3.12 trillion includes N2.28 trillion for capital spending, inclusive of capital in statutory transfers; N275.88 billion representing capital for the top-nine GOEs and N556.02 billion for Multi-lateral/Bi-lateral project-tied loans.

The Minister said: “For comprehensiveness and transparency, the expenditure plans of the top 9 GOEs, as well as Multi-lateral and Bi-lateral project-tied loans have been integrated into the 2019 – 2021 Medium Term Fiscal Framework.”

Indicating that the Government would continue the implementation of the 2018 Budget until the 2019 Budget is passed by the National Assembly and assented to by the President, he said: “The 2019 Budget of Continuity is intended to further reposition the economy on the path of higher, inclusive, diversified and sustainable growth, and to continue to lift significant numbers of our citizens out of poverty.