CLEMENT NWOJI, Abuja

Federal Government Monday said that capital budget implementation has reached an average of 44.55 per cent just as it recorded a revenue deficit of N404.59 billion or 23.81 per cent out of budgeted revenue of N1.698 trillion between January and September 2009 under review.

Also, the projected revenue available for sharing among the three tiers of government fell short of the projected estimates of N2.687 trillion by N666.07 billion, indicating that oil and non-oil revenue performances were below projections.

Minister of Finance, Dr. Mansur Muhtar, made the disclosures while reviewing the 2009 budget performance in a ministerial press briefing entitled “Charting the course for sustainable growth and development in a challenging global and economic environment.”
He said at the Federal government level, the “oil revenue under performed by N171.73 billion or 23.63 per cent relative to the projected level of N726.8 billion and non-oil revenue under performed by N274.3 billion relative to the projected level of N662.07 billion.
Muhtar however, said that the Federal government budgetary expenditure releases amounted to N2.4 trillion made up of recurrent (non-debt expenditure of N1.21 trillion or 50.42 per cent, recurrent (debt ) expenditure  of N227.36 billion or 9.47 per cent, cash backed capital expenditure of N829.12 billion or 34.55 per cent and statutory transfers of N127. 94 billion or 5.33 per cent.
While Muhtar noted that there was an improvement on the budget performance from 21 percent recorded in the first quarter to 44.55 per cent as at September 2009, he said a number of Ministries, Departments and Agencies (MDAs) utilized 70 per cent of the capital vote released.
He said following introduction of strategies towards improving capital budget execution rate including monitoring and tracking, simplifications of the procurement priorities, strengthening MDAs implementing capacity that these had contributed to a higher capital expenditure execution rate by 50 per cent as at end of October, 2009.
On macroeconomic performance, he said that the government’s debt profile remained sustainable with external debt stock of N3.86 billion and domestic debt of N3.06 trillion or $20.4 billion as at end of September, 2009.
Also, he said that the external reserve which is about $42.2 billion as at November 24, 2009 remained “quite comfortable in view of the external liabilities of the private and public sector as well as import chttp://citizensbudget.org/citizensbudget/administrator/index.php?option=com_content&sectionid=-1&task=edit&cid[]=69#overage.
On the proposed deregulation of the petroleum sector, the Minister said it would be done soon without giving any definite time frame, saying that “The Government has also been working very hard in reforming the downstream petroleum sector with a view to removing the inefficiencies that have bedevilled the sector, enhancing competition as well as ensuring adequate supply of petroleum products.
“The dependence on imports, inadequate supply and distribution infrastructure and poor condition of the refineries underscore the necessity for a change in government policy in the downstream petroleum sector. As a nation, we have spent huge amounts of resources over the years, purportedly to subsidize domestic consumption of petroleum products, which has bred huge inefficiencies and rent-seeking activities in the downstream petroleum sector. 
“In 2006, it was N255.7 billion, rose to N290.4 billion in 2007, and nearly tripled to N654.7 billion in 2008. We envisage spending about N600 billion in 2009. In 2008, the actual subsidy payment by the Federal Government was about 65 per cent the size of actual Federal Government Capital Expenditure.
The projected Federal Government subsidy payment for 2009 is about 117 per cent of the total amount allocated to critical infrastructure (Power, Aviation, Petroleum Resources, Works, Transport and infrastructural projects within the Federal Capital Territory). The estimated Federal Government subsidy payment is about 186 per cent the budgeted capital expenditure for Human Capital Development (Health, Education, MDGs Conditional Grants and MDGs Quick Wins Projects). This clearly is untenable and unsustainable”.
He said the importation of generating sets and the consumption of fuel at various quarters were being utilized as backups even in the State House, adding that he had no regrets about the budget to that effect.
While responding to a question on what would happen to the Federal Appropriation Bill, 2009 if eventually passed into law by the National Assembly without President Umaru Yar’Adua returning to the country from medical treatment abroad, Muhtar said Vice-President, Goodluck Jonathan was on top of the situation.
He said “we are looking forward to the President returning soon, it will be speculative to say when he will come back.”
Also speaking, Minister of State for Finance, Mr. Remi Babalola, said that the Federal Government would ensure an accelerated economic recovery for the country in 2010, adding that the government is working for urgent exit of public funds from the eight financial institutions rescued by the Central Bank of Nigeria.
He said the government had initiated strategic interventions to stimulate and re-energize the economy, including additional withdrawal from the Excess Crude Account, explaining that the interventions were aimed at ameliorating the adverse impact of credit squeeze due to extreme risk aversion in the aftermath of efforts to strengthen the banking sector.
“The Year 2009 has been a year of trauma and turbulence and 2010 is certainly going to be a year of accelerated economic recovery. The huge withdrawals from the Excess Crude Account have become necessary to stimulate the economy.
“We have projected a Gross Domestic Product (GDP ) growth of $900 billion from the current level of over $200 billion, as part of measures to realise the National Vision 2020 target of Nigeria being among the top 20 largest economies in the world,” he said.
Saying that the Federal Ministry of Finance was collaborating with the Central Bank of Nigeria to fast-track the establishment of an Asset Management Company (AMC), Babalola said the AMC has been conceptualised to assist banks to improve their capital and liquidity positions by taking over toxic assets (qualifying loans) from the banks.
“We are going to take out the toxic assets from the balance sheets of banks. The establishment of the AMC will help restructure and further improve the balance sheets of banks as well as enhance the flow of credit to the real sector.
“To engender confidence, trust and rebuilding financial architecture, the government investments must be based on a tripod of strong governance, superior leadership and enhanced transparency.”

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