By Ifeanyi Onuba, Abuja

Tuesday, 23 Nov 2010

The Federal Government is targeting a gross federally- collectible revenue of N7.2tn for the 2011 fiscal year.

It also projected the sum of N7.82tn and N8.17tn as gross revenue for the 2012 and 2013 fiscal periods, respectively.

Of these amounts, N2.47tn will be used to fund the budget for next year, while N2.70tn and N2.87tn will be utilised to fund the 2012 and 2013 budgets, respectively.

The projections, contained in the Medium Term Expenditure Framework for 2011 to 2013, also included a N4.63tn aggregate expenditure estimate for 2011.

The MTEF, which is government’s fiscal strategy paper, serves as the basis for the preparation of estimates of revenue and expenditure for the annual budget of the Federal Government.

The report, which was forwarded by President Goodluck Jonathan to the Speaker of the House of Representatives, Mr. Dimeji Bankole, on November 1, 2010, also estimated N5.01tn and N5.46tn as aggregate expenditure for 2012 and 2013, respectively.

The aggregate expenditure, it noted, “results in a fiscal deficit as a percentage of Gross Domestic Product of -5.67per cent, -5.21 per cent and -5.02 per cent for 2011, 2012 and 2013 respectively.”

It added, “The increase in aggregate expenditure is largely attributable to the increase in personnel costs as a result of the award of wage increases to core civil servants, medical personnel, and university lecturers.”

To address the possible effects of the wage shock, it said that the government would rationalise recurrent spending by implementing the centralisation of the payment of all bills owed the Power Holding Company of Nigeria by all ministries, departments and agencies of government.

The assumptions underlying the strategy include an oil price benchmark of $58, $60 and $62 for 2011, 2012, and 2013, respectively. Oil production benchmarks were also set at 2.3 million barrel per day, 2.4mbpd and 2.45mbpd, respectively for the three years.

Of the collectible revenue, Companies Income Tax is expected to generate N632.79bn, N696.06bn and N765.67bn; while Value Added Tax collections were projected at N625.24bn, N687.76bn and N756.45bn, in that order, for the next three years.

The report, a copy of which was obtained by our correspondent, also projected collections from Customs duty for the next three years at N450bn, N510.1bn and N663.4bn, respectively.

The framework said the assumptions were “realistic and conservative and have taken into account the previous performance of oil and non-oil revenue.”

Jonathan, in the MTEF, said the fiscal strategy of the Federal Government over the next three years was focused on improving the efficiency and quality of capital spending through the promotion of public-private partnerships, as well as greater emphasis on critical infrastructure.

Others are rationalisation of the outlay on recurrent expenditure, boosting revenue receipts by identifying and plugging revenue leakages, as well as gradual fiscal consolidation to return the fiscal deficit below three per cent of Gross Domestic Product as prescribed by the Fiscal Responsibility Act, 2007.

Source: Punch