<\/p>\n
\u00a0Good morning and thank you very much ladies and gentlemen.<\/p>\n Honourable Ministers, my colleagues from the ministries of Works, Power I am happy to see the Auditor General; he is joining us here today as well The Customs, thank you for coming also and joining us.<\/p>\n Donor partners, thank you. Distinguished ladies and gentlemen from civil Today, the speech I\u2019m going to give \u2013 I have to crave your indulgence \u2013 is I want to start by expressing my profound appreciation to His Excellency, I thank my cabinet colleagues for their support, their understanding; and I acknowledge the efforts of all other relevant stakeholders and Now before I discuss the contents of the budget, please permit me to take Now, the first thing I want to address is, What is the budget all about? For example, in previous budgets we\u2019ve announced measures such as backward The government uses the budget process as an occasion to launch policies These policies can amount to significant amounts of money in billions of I want to state in the case of waivers and exemption, there has been a The second point I want to point out is the level of transparency and I think it is a big advantage. I thank our civil society colleague for My third comment concerns our budget process. In preparing the budget each I think in the future we need to consider moving to a system where we have So I really would like also to appeal to the legislature, particularly, The fourth point I want to make highlights the concerns on the structure You will see that in the presentations that will come up and maybe later So, Nigerians need to see. As long as we continue to have these continuous The tough choices involve also trying to slim down in places where there To strike that balance that we need in this country between recurrent and I want to be very clear \u2013 all I want to say to you is that we are all in My fifth and final comment is on the subject of budget revenues. Let me be Following initial reports by the Central Bank, there have been discussions I believe that the Federal Ministry of Finance has played its role in Now the next stage of the discussion is to ensure that these funds are So I want to make clear that any statements made about the disposition of Now, on non-oil revenues, in recent months also, our non-oil revenues have Let me end this section of the remarks by assuring Nigerians that on all Now let me turn to the global economic environment and address the budget. Why do all these things matter to us? It matters because Nigeria is well \u00a0Good morning and thank you very much ladies and gentlemen. Honourable Ministers, my colleagues from the ministries of Works, Power and Women Affairs; Honourable Chair of the House Committee…<\/p>\n","protected":false},"author":1,"featured_media":21151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-22478","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exclusive"],"yoast_head":"\n
\nand Women Affairs; Honourable Chair of the House Committee on
\nAppropriations; the Deputy Chair of the House Committee on Appropriations;
\nsenior government officials; Special Adviser to the President on
\nPerformance Monitoring; Permanent Secretaries; Distinguished DGs and heads
\nof organisations.<\/p>\n
\nas the Accountant General; and we have so many heads of parastatals and
\nother government agencies.<\/p>\n
\nsocieties and the private sector, as well as ladies and gentlemen of the
\npress. It is really my honour to welcome you all to the public
\npresentation of 2014 Federal Government budget proposal.<\/p>\n
\ngoing to be a little bit longer than usual because of what was described
\nby the Country Director of the World Bank and all of us and the Honourable
\nChair of the House Committee: I laid the budget, we did not have the usual
\nbudget speech of Mr. President, so I want to take the time to lay out some
\nof the key parameters of this budget. So I just want to alert you ahead of
\ntime that it will be a little bit more detailed or longer than usual.<\/p>\n
\nPresident Dr Goodluck Ebele Jonathan and Vice President Namadi Sambo under
\nwhose guidance the 2014 budget was prepared. I also thank the leadership
\nof the National Assembly, the Chairs of the Finance and Appropriations
\ncommittees of the Senate and the House. And I particularly want to thank
\nthe Honourable Chair of the Appropriations Committee and his deputy for
\nspending time with us here today; also the other Honourable Ministers who
\nare here present.<\/p>\n
\nmy three colleague ministers who are here today whose work is very
\nimportant to the achievement of the objectives of the Budget 2014 and even
\nthe implementation of 2013 budget \u2013 the Honourable Ministers of Power,
\nWorks and Women Affairs. We have to work under a very tight timetable and
\nconstricted budget; yet they did the best they could to deliver with their
\nteams. Thank you.<\/p>\n
\nespecially the staff of the budget office of the federation for their hard
\nwork in preparing this budget. Please give them a round of applause. It
\ngoes without saying that due to some of the constraints along the way,
\nduring this budget preparation there were many sleepless nights and 24
\nhours working in order to get the budget delivered. I render my sincere
\nthanks to them all.<\/p>\n
\na few minutes to make some introductory comments which I think will
\nprovide the context for the rest of the budget speech today. Before I do
\nthat, I also want to point to you that you will be given \u2013 if you haven\u2019t
\ngot them already \u2013 several important documents. First is Understanding
\nBudget 2014, the next is The Citizen\u2019s Guide to the Budget, so it makes
\nthe budget simple; and we\u2019ll also be distributing, due to popular demand,
\nanswers to the 50 questions. We got many messages saying that people would
\nlike us to distribute it at this forum; so we\u2019ll try. We may not have
\nenough copies because we were not really preparing to do that. So we\u2019ve
\nonly got a few but we\u2019ll do the best we can.<\/p>\n
\nWe\u2019ve heard many comments about the budget. We\u2019ve called it a budget for
\ninclusive growth and job creation. And people have pointed: \u201cHow can they
\nsay they are creating jobs when only \u201cx\u201d amount has been allocated to this
\nsector and it\u2019s not enough?\u201d I want to state that the budget is not simply
\na set of revenue and expenditure plans by government. Rather, the budget
\nis a statement about government\u2019s fiscal policies and related policies
\nwhich are intended to move the economy forward. The budget is not only
\nabout the resources being allocated to various sectors, but also about new
\nfiscal policies which will stimulate growth across various parts of the
\neconomy.<\/p>\n
\nintegration policies to support various Agriculture Value Chains such as
\nrice and sugar; and to support Industrial Value Chains such as cement, to
\nsupport the development of the Solid Mineral Sector and so on. So when you
\nlook you often find that the impact of these policies may give resources \u2013
\nand I will illustrate this as we go along with this speech \u2013 they make
\nresources available to the sector that are ten times the amount that is
\nseen within the budget.<\/p>\n
\nthat can leverage significant resources outside of the budget to help grow
\nthe economy, create jobs, and put supportive policies in place that are to
\nthe benefit of Nigerians. I wanted to really mention that point. In this
\nregard, I want to add that a whole set of industrial incentive policies
\nwhich in Nigeria are typically called waivers and exemptions are a
\ndeliberate act of government policy. And these are the policies that have
\nunderpinned the expansion that I spoke about in the cement, the sugar and
\nother industries; and enabled the creation of jobs.<\/p>\n
\nnaira but they are what enable our manufacturing industries in particular
\nto be competitive; to be able to expand in an era where they may face
\nconstraints on their competition and production and thereby to create
\njobs. So job creation is linked very much to these policies of government.
\nAnd I want to say that people need to understand this because at some
\nstages, you know, these policies are not well understood, and some people
\nthink these are policies that lead to fraud.<\/p>\n
\ndebate going on, and to elucidate that in the past these policies were not
\napplied properly in the way they should. Now, they have been restructured
\nand revamped so that from 2012 on, they are on a sectoral basis. Anybody
\noperating within the sector has access to the same incentives and the same
\nlevel playing field that everyone else has. But we need to understand
\nthese policies as incentives to help our manufacturing grow.<\/p>\n
\ndetail of the Nigerian Federal Government budget. In all my years working
\nacross developing countries \u2013 and I\u2019m glad the international institutions
\nare here \u2013 African Development Bank, the World Bank and the IMF are here \u2013
\nI\u2019ve not seen budgets as comprehensive and detailed that go down to how
\nmuch is spent buying plates, forks and knives, catering for food. It
\ndoesn\u2019t exist. And I\u2019m proud that in this country, we do not have a
\nproblem with laying out the details of the budget so that Nigerians can
\nlook. We just heard some comments by the civil society about a detail in
\nthe budget \u2013 I think the DG budget will correct that particular impression
\nbecause there were some errors that arose in the GIFMIS which we
\nimplemented this year that led to those. But apart from that, what I\u2019m
\nproud about is that we have a level of detail in this budget that allows
\nNigerians to see down to the last naira, what it is being spent on.<\/p>\n
\nrecognising this transparency. It is designed to engage the public in the
\ndebate to show them exactly where the money is going. So we should see
\nthis as a big advantage of this country\u2019s budget which you do not see in
\nother countries. When you travel elsewhere and you look at their budget,
\nif it is available, it is usually much more aggregated than what you see
\nin the Nigerian budget where budget is three volumes, because we\u2019ve gone
\nto the last detail to share with Nigerians what it is so that they can put
\ntheir voices forward to the MDAs (to the Ministries, Departments and
\nAgencies), the Ministry of Finance and say, \u201cThis is what we think and
\nthis is what we think.\u201d And we are very happy that this budget has enabled
\nthat engagement in that kind of conversation.<\/p>\n
\nyear, we make every effort to be consultative by inviting stakeholders and
\nconsulting them and talking to them about the process. But of course
\nincreasingly as time goes along, I have found that the budget process is
\nalso becoming difficult and more challenging for the executive and the
\nlegislature to agree on key parameters. I want to thank the National
\nAssembly, because I think this year we engaged very deeply more than we
\ndid before with the various committees to try to come to an understanding.
\nBut it ended up taking some more time. And one of the reasons we took more
\ntime was the issue of the benchmark oil price for the budget. And
\nincidentally we\u2019ve also answered extensively on this issue in the fifty
\nquestions.<\/p>\n
\nan objective and depoliticised process for some of the parameters that we
\nneed to consider in order to move the budget process along expeditiously.
\nFor example, we can consider what some other countries that have gone
\nthrough this exercise are doing. Chile has copper as their main product
\nand what they have is an independent panel of experts that are independent
\nof both the executive and the legislature and they set up a methodology
\nthat is agreed. Whatever they bring in terms of the copper price is the
\nbenchmark price that is used for preparing the budget; but it is done
\nindependently and removes the rancour out of that process. In Ghana and
\nMexico, Ghana actually studied what was happening here in Nigeria and
\ndevised their own system that has a predetermined formula for setting the
\nbenchmark underpinned by law so that there is no argument by either the
\nexecutive or the legislature; it just happens and it\u2019s automatic in the
\nway that it is done.<\/p>\n
\nthe Honourable Chair and Deputy Chair here that we look at this and see if
\ntogether we can come up with an objective and independent process that can
\ndetermine some of the benchmarks that we need for our budget and take it
\naway from the realm of argument so that we can move this forward. If other
\ncountries have done it, Nigeria is certainly capable of doing it. I
\nbelieve that if we can come to this, the slippages in our timetables and
\nthe other issues that occur along the way will be reduced and we will be
\nable to produce and pass and move to implementation of the budget in a
\nmuch more expeditious manner.<\/p>\n
\nof our budget. Distinguished guests, ladies and gentlemen, the high share
\nof recurrent expenditures in the budget is of great concern to us as it
\nreduces the size of funds available for investments in capital projects.
\nWe all know that and I want to state categorically that this has been our
\nview since the first day that we came into this job and has been the view
\nof the budget office that Nigeria needs to move to a different structure
\nof its budget. To this end, we worked hard to reduce the ratio of what we
\nhad in the recurrent to capital from what we found in 2011 which was 74%
\nwhen I started work to 71.5% in 2012 further to 67.5% in 2013 but we are
\nback to 74% in 2014. And why is this? We are here because we have not yet
\nbeen able to make the choices needed to change the structure of the
\nbudget.<\/p>\n
\non in the day, the reason why we have a very high ratio of recurrent now
\nafter a very good effort \u2013 when I was minister first time, we tried to
\ntake the ratio down to about 65%. It came up again, then went down; but
\nthe present situation we are in today occurred from the award to salaries
\nthat were given in 2010. This jerked up the recurrent budget considerably
\n\u2013 and I have more to say about it \u2013 the personnel bill, I believe, went to
\nalmost double its size and that changed considerably the structure of the
\nbudget. As we speak, the pension benefits \u2013 the arrears of pensions
\nattendant on this; we\u2019ve only begun to factor in the pension implication.
\nFor the military, we did it in 2013. For the civilians, we\u2019re factoring it
\ninto this budget and it\u2019s adding another 27 billion naira and we still
\nhave the arrears to consider.<\/p>\n
\nawards \u2013 and we are very much for equal pay for work, so this is not to
\nsay that people should not be paid well but we need to recognise the
\nimplication of what that means. When these awards are made, it jerks up
\nthe recurrent budget. So it is not as if the government is sitting, not
\ntrying to work on this but we\u2019ve got other forces that lead to continuous
\nincrease in the recurrent budget; and this is what we have been pointing
\nout. So all those who find this discomfiting, they need to know the reason
\nwhy we\u2019ve got these ratios and they need to understand that as long as we
\ncontinue to increase these bills, have more awards and integrate the
\narrears, the recurrent budget will continue to increase; and that\u2019s just
\nthe structure, the structure is not a mystery. If you look at the graphs,
\nyou will see that. So we need to make some tough choices.<\/p>\n
\nmay be waste in the recurrent budget. So it\u2019s not just on the wages and
\nsalaries; we must also work in other areas where there is waste \u2013 where
\nthere are duplicative agencies and work by agencies, we must also in
\nfairness try to take those away, slim those down. And these are some of
\nthe things that we are looking at.<\/p>\n
\ncapital, some tough choices are needed. When we started with Mr President
\nlooking at the Oronsaye report which gave a list of agencies with
\nduplicative functions or committees which we could just either streamline
\nor merge, we found that most of these agencies are underpinned by law. So
\nat the end of the day, we could not get up and say we merge this or we do
\naway with it because we have a law underpinning it. So through this, I\u2019m
\nalso strongly appealing to the legislature and the National Assembly that
\nwe will need their help with the review and repeal of some of these laws
\nif we are to achieve the objective of curbing waste, streamlining
\ngovernment expenditure and getting a balance.<\/p>\n
\nthis together. This is not a question of the executives sitting and saying
\nwe are going to spend money in the recurrent. People need to recognise and
\nrealise that each time personnel cost goes up because of further
\nincreases, the recurrent cost goes up. Each time we are not able to
\nstreamline our agencies because of \u2013 maybe legal issues \u2013 that\u2019s an
\nimpediment. So we really need to work on all of this \u2013 the legislature,
\nthe executive, the Nigerian public, civil society \u2013 we need to come
\ntogether to solve this problem; and we are very willing to do it because
\nwe think the structure now needs to be changed.<\/p>\n
\nupfront in stating that the role of the federal Ministry of Finance is to
\nensure that the maximum amount of revenue flows into our national coffers.
\nOur role is not just to look at expenditures and how to curtail it but is
\nalso to increase the revenues and look particularly at non-oil sources
\nsince we are trying to diversify this economy. But I\u2019d like to take this
\nopportunity to clarify some issues. One is on the oil revenues and is
\nbased on the debate that is on-going now.<\/p>\n
\nin the country and the media about monies not remitted by the NNPC to
\ngovernment coffers. After our initial reconciliation, we now have an
\namount that is agreed, an amount that everybody is talking about and has
\nbrought everybody round the table \u2013 the $10.8billion which still needs to
\nbe accounted for. I just want to remind everybody listening that this
\nrevised $10.8 billion outstanding is the amount put forward by the
\nMinistry of Finance based on the reconciliation that has been happening at
\nthe FAAC \u2013 the Federal Allocations and Accounts Committee chaired by the
\nHonourable Minister of State; and we have been doing this work over the
\npast two years.<\/p>\n
\nbringing parties to the table. It has been working every single month to
\nsee what is due to the Federation account and what is not due; and has
\nbeen able through hard work to table this number \u2013 month after month, this
\nis the total we have for the period we are talking about \u2013 and to get all
\naround the table to agree what the number is. You cannot even begin to
\ndiscuss unless you have the proper reconciliation.<\/p>\n
\npaid into the Federation Account. We\u2019ve come from a situation where it\u2019s
\nbeen agreed and admitted that the $49.8 billion that was put on the table
\nis not the right number. We are now at the 10.8 billion. And the next
\nstage is to ensure that we sit down and look at this number to ensure that
\nwhatever funds of this belong to the Federation Account are paid in. I
\nthink headlines will not bring money into the Federation Account. It is
\nour job in the Ministry of Finance to make sure that every naira owed the
\nFederation comes into the coffers. And that is why the hard and
\nunglamorous work of sitting down and looking at the numbers in reconciling
\nwith the NNPC is underway as we speak.<\/p>\n
\nthese monies prior to the completion of the reconciliation exercise, I
\nthink it\u2019s premature \u2013 on all sides, whether it\u2019s from the Central Bank,
\nthe Ministry of Finance, or the NNPC. We need to finish the hard work.
\nWhere these monies have been spent we need to see the justification very
\nclearly with supporting evidence that they\u2019ve been spent. And where that
\ndoes not exist, the monies need to be remitted to the Federation Account.
\nThis is what we stand for and this is why we are insistent that we focus
\non what is the hard work to be done. And we will be accountable for
\nmanaging the government\u2019s finances that come into the coffers of the
\nFederal Ministry of Finance, of the treasury. And we want to one more time
\nreassure everyone that our job is ensure that we get hold of every naira
\nthat belongs to the Federation Account.<\/p>\n
\nalso decreased due to our recent fiscal policies and to some extent due to
\nsome goods being smuggled across our borders. For instance rice, the
\npolicies that we put in place \u2013 the fiscal policies we put in place to
\nprotect the rice industry \u2013 have worked but have also led to some
\nunforeseen side effects in terms of increase in smuggling. And we are
\nlooking at that to look at these policies and review them to a point where
\nthey work better for the benefit of the economy. But I want to say that we
\nare looking at our non-oil sector too. It\u2019s not just oil; we must not be
\nfixated only on oil. And in that regard, we are working very hard. The
\nFederal Inland Revenue Service is working hard to improve on the good job
\nthat it has already been doing and has engaged international consultants
\nto help us further boost our non-oil revenue performance. And with the
\ncapacity building they are giving and the support, the FIRS, and later on
\nworking also with Nigerian consultants, will be able to carry on this work
\nand make sure that our non-oil revenue performance also increases.<\/p>\n
\nthese issues the Federal Ministry of Finance is pushing hard in the right
\ndirection; keeping its focus on trying to correct where it can, the
\nimbalances that exist and pointing out where there are issues sometimes
\nbeyond its own capability to solve alone and where it will need the help
\nof the Nigerian public and the legislature. Some of these issues cannot be
\nsolved alone. We must come together to grasp them and to move on. On the
\nrevenue side we pledge to continue working hard to plug leakages and to
\nboost both oil and non-oil revenues.<\/p>\n
\nThe proposed 2014 budget is being presented to you today; prepared against
\nthe backdrop of a fragile global economic recovery and uncertain outlook
\nfor the global economy. The advanced economies are growing again for which
\nwe pleased, albeit at a slow pace. And emerging market economies face the
\ndouble challenge of slowing growth and tighter fiscal conditions
\nespecially with the anticipated tapering or quantitative easing by the US
\nFederal Reserve bank. Overall, 2013 global growth was weak with the
\npreliminary estimate of 2.9% growth for the world economy.<\/p>\n
\nintegrated into the global economy. And so we must remain vigilant about
\ndevelopments that happen internationally. The USA and Europe together
\naccount for nearly 54% of our export while the BRICS economies: Brazil,<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"