Business Briefs
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THE federal government is proposing to fund part of the 2017 budget deficit of N2.69 trillion from funds recovered from treasury looters. The proposal is contained in the Medium Term Expenditure Framework/Fiscal Strategy Paper, which was submitted to the National Assembly.
The Senate had two weeks ago dismissed the 2017-2019 MTEF/FSP sent to it by President Muhammadu Buhari, describing the documents as “empty” and as such should not be considered. The MTEF provides the basis for annual budget planning and consists of a macroeconomic framework that indicates fiscal targets, estimates, revenues and expenditures, including the government’s financial obligations in the medium term.
The document, prepared by the ministry of budget and national planning, also sets out the underlying assumptions for the projections, provides an evaluation and analysis of the previous budget, and presents an overview of the consolidated debt and potential fiscal risks.
The federal government is proposing to spend N6.86 trillion in 2017, with total revenue of N4.16 trillion. It said based on the funding gap of N2.69 trillion, an effective strategy would be adopted in financing the deficit. For instance, the government said while part of the deficit would be financed with recoveries from looted funds, the rest would be from borrowings.
The document did not, however, provide details of the amount to be borrowed or the recoveries to be used to finance the budget deficit. “Based on the revenue and expenditure estimates, the fiscal deficit is estimated to increase by about N492 billion or 22.32 percent from the estimate of N2.2 trillion in 2016.
“However, while this remains below the maximum three per cent of the Gross Domestic Product stipulated in the Fiscal Responsibility Act, 2007, it is projected to take a downward turn afterwards. The deficit is to be financed mainly by borrowing as well as recoveries of misappropriated public funds/assets.”
Also, the government, in consideration of its debt sustainability position, would remain prudent in its borrowing programme. “Borrowing will be geared towards funding critical capital projects that have potential to effectively increase productivity, and hence, provide mechanism for refinancing the debt,” it added.
— Nov 28, 2016 @ 01:00 GMT
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