The Federal Executive Council (FEC), in an extra-ordinary meeting on Tuesday approved a provisional figure of N2.37 trillion for next year’s Appropriation Bill which is to be presented to the National Assembly later this month.
Briefing State House correspondents, Dr. Shamsudeen Usman, the Minister of Finance, in company of his Information and Communications counterpart, said that the budget was based on a crude oil bench mark of $53.8 per barrel. The bench mark for this year was $40 per barrel.President Yar’Adua will eventually make available to the National Assembly by October 18, 2007.
The Minister explained that this was a realistic estimate as government did not want to overestimate the revenue that would accrue to the federal purse or underestimate problems in the Niger Delta that could affect oil production.
Justifying how government arrived at this estimate, the minister explained, the benchmark for crude oil price to be used for the 2008 budget is $53.8 per barrel and this might look rather too much when you compare it to $40 per barrels of last year’s estimate, it will look like we are been irresponsible, that we are probably not saving enough for the country, that is not so.
What has happened in the past where we provided for $35 per barrels in 2006 and $40 per barrels? We had all the time to recourse to the excess crude in other to make up for the shortfalls. So we are planning much more to be realistic with $53.8 per barrels. We hope to have mechanism that we will fall back on with excess crude in our earnings from deficit arising from the budget implementation.
Total projected spending by the federal government is N2.37 trillion, which when you compare with the last year’s estimate means we are projecting for a deficit of N381 billion by the federal government which is 2.1 per cent of the gross domestic products.” He said security, including that of the Niger Delta region, energy (power), agriculture, water resources and education would receive priority attention in the 2008 budget.
The point was also made and accepted by the government that resources available from government side alone are never going to be enough to fund the entire requirement especially the huge infrastructure projects. We are actually coming out with different perspective to find and suggest alternative ways of funding to the Federal Executive Council.
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