FG RECORDS N249BN Q1 DEFICIT
The Federal Government has recorded a budget deficit of N249.10 billion in the first quarter of this fiscal year.
Minister of State for Finance, Mr. Remi Babalola, made this known in Abuja yesterday while declaring open the meeting between the Federal Inland Revenue Service (FIRS) and the 36 states Commissioners of Finance and stakeholders,
The government he, however, said generated a total of N7.65 trillion through the nation's four revenue collecting agencies as at the end of 2008, translating to N9.82 billion increase over the N6.65 trillion budgeted revenue target for the year.
Babalola said that between last January and March, N979.25 billion was generated by revenue generation agencies as against the budgeted amount of N1.228 trillion for the period.
He attributed the dwindling revenue from crude oil, which is the nation's major earners, to the crisis in the Niger Delta, which has necessitated last month's launch of the armed military's biggest offensive in years against the Niger Delta gunmen that have continued to threaten and disrupt exploration activities in the region.
Given this scenario, the minister said that unless efforts were made to ensure discipline in expenditure, key assumptions in the 2009 budget might not be realised.
He emphasised that owing to the spiralling effect of the global economic crisis, which erupted in the United States, the performance of all revenue generating agencies across the country this year had been witnessing a downturn.
'Between January to March 2009, the sum of N979.25 billion was generated when compared to the budgeted sum of N1.228trillion, a deficit of N249.10 billion or 10 per cent of the budget has already occurred.
'This particularly indicated that the underlining assumptions of the 2009 budget may not materialise unless efforts are put in place towards generating efficient use and expenditure discipline,' he said.
Making comparison of the current situation with what obtained in last fiscal year, Babalola, who was represented by the Accountant-General of the Federation, Mr. Ibrahim Dankwambo, said four major revenue generation agencies collected N7.65 trillion in 2008 as total revenue as against the budget of N6.671 trillion. This he said, resulted in a surplus of N98.232 billion or 15 per cent increase.
'FIRS in particular generated about N2.97 trillion of the total collection or 39 per cent. The performance of FIRS is therefore 31 per cent over and above their 2008 budgeted figure,' he noted.
Earlier, in her welcome address, FIRS chair, Mrs. Ifueko Omoigui Okauru, warned that the current slight rise in the prices of oil, now being experienced should not provide the country with comfort. Rather, she added, the Federal Government should concentrate efforts on improving internally generated revenue through tax.
She said: 'Admittedly, oil prices have picked up (to over $60 per barrel, from a prior low of just above $40 per barrel earlier this year) however, this should not provide comfort to us, as we are well aware of the volatility of oil prices.'
In his own remarks, Chairman, Forum of Commissioners of Finance of Nigeria, who is also the Commissioner for Finance, Taraba State, Mr. Rebo Usman, posited that the solution to the dwindling fortunes of the economy was in its ability to harness potential sources of economic activities.
The FIRS had a couple of weeks ago announced a drop of N124 billion in its tax revenue collection in the first quarter of 2009 - from N477 billion to N353 billion.
FIRS' Executive Chairman, Okauru, had disclosed this in her keynote address at a four-day conference on Effective Audit & Investigation for Improved Tax Compliance in Abuja.
Also, on May 7, the Minister of State for Finance had also said revenue from oil fell to $1 billion last January from an average of $2.2 billion a month last year.
The minister said companies, institutions, banks and departments owed the government over N260 billion in unpaid taxes, a situation he called 'unacceptable'.
At a briefing on the details of the 2009 Federal Budget in Abuja last March, Director, Budget Office, Dr. Bright Okogu, had projected that total non-oil revenue for 2009 would be N1.972 trillion - about 80.8 per cent increase over N1.091 trillion of the previous year.
Total oil and gas revenue, he said, would be N3.114 trillion, indicating some 34.1 per cent decrease over N4.726 trillion of the previous year and a gross federally collectable revenue of N5.305 trillion - about 9.6 per cent below N5.868 trillion of last year.
The first-quarter revenue fell after the price of crude oil declined to less than $50 a barrel from a record $147 per barrel last July.
In a bid to be able to fund the construction of roads, schools, hospitals and houses, Nigeria had worked out modalities to boost taxes.
Meanwhile, the extra-ordinary Federal Executive Council (FEC) meeting, yesterday appro-ved and ratified nine different power contracts to the tune of N348 billion to boost power generation, distribution and transmission.
The approvals based on the recommendations of the Presidential Council on the National Integrated Power Projects (NIPP) include N21.43 billion, 14 million euro and $1.97 billion respectively.
Briefing State House correspondents after the meeting which lasted seven hours, the Minister of Infor-mation and Communications, Dora Akunyili, in company of her counterparts in the Ministry of Power, Lanre Babalola and Nuhu Wya, said the drive is geared towards achieving the President Umaru Musa Yar'Adua's target of 6,000 megawatts of electricity by December 2009 and 10,000 mw by 2011.
Akunyili, said the different approvals are part of the 'effort of the Federal Government towards improving the power supply situation across the country and the projects, if completed are expected to enhance energy throughout the country'. The projects appro-ved and ratified by the council are the manufacture and supply of 20 number numerical relay testing equipment complete with accessories and software, plus factory acceptance test and training of two number transmission company of Nigeria Engineer in the sum of N46,425,702.19k plus Euro 994,660 at prevailing exchange rate during the time of payment.
Other projects approved and ratified by FEC are the ratification of the recommendation of the National Integrated Power Project Steering Council which involves contract extension of Kainji 330KV substation, construction of 1×150 MVA, 330/132KV substation at Kainji and construction of 2×30/40 MVA substation at New Bussa in the sum of N1, 453,535,667.00 plus $14,987,148.58 at the prevailing exchange rate during the time of payment. Completion period is 18 months.FEC also ratified the construction of Ikorodu-Odogunyan-Shagamu 132 KV double circuit line in the sum of N1, 184,817,577.48 plus Euro 8,931,795.26 and the ratification for provision of ramp and jetty at Imo River Bridge for the crossing of heavy lift equipment in respect of the NIPP in sum of N1, 999,285,968.10 with completion period of six months and the ratification for the upward revision of a contract approved by Yar'Adua on the recommendation of NIPP Council, at a cost of $740,142,576 and revised to $970,350,788.15 that is additional cost of $230,216,212.27.Akunyili said the additional costs arose from the delay in funding of the original contract among many other factors.
The council also ratified the upward review of the contract for the Niger Delta medium sized power plants EPC/BDP, contract for power plants variation order request for relocation of Sapele power plant project, adoption of 'Z' shape configuration and provision of 330KV x LPE underground cable. The contract was reviewed from $120,679,166 to 136,403,186 that is $15,724,070 with completion period of nine months