2016 Revenue Projections Failed- FG

Over half of this year’s capital projections have failed due to shortfall in expected revenue, the Federal Government revealed yesterday.

The Federal Government budgeted about N1.8 trillion for capital projects in 2016 but only N753.6 billion was released as at October, Minister of Budget and National Planning, Senator Udo Udoma said yesterday.

Government had expected that the N6.06 trillion budget would help reflate the economy but it suffered setback due to several factors.

Presenting the 2017 budget details yesterday, Udoma said pipeline vandalism and militancy in the Niger Delta as well as low global crude oil prices affected the implementation of the 2016 budget.

He said the 2016 budget, which was predicated on oil production of 2.2 million barrels per day with 38 dollars per barrel and exchange rate of N197 to a dollar, fell short of all revenue projections.

The minister said the budget did not benefit much from the slight excess revenue   from increase in global crude oil prices above government’s projection, as militant activities forced down daily outputs.

Udoma said: “The Federal Government’s 2016 revenues have been low because of the sharp decline in oil production. In particular, the revenue target for January to September 2016 was N2.8 trillion as against N2.2 trillion realised during the period.

“The projected independent revenue was N1.1 trillion as against N0.2 trillion realised during the period. The projected revenue for Custom was N0.3 trillion as against N0.2 trillion realised. The projected non-oil tax receipts for the first to third quarter of 2016 is N0.8 trillion and only N0.5 trillion was realised.”

To support funding of the 2017 budget, the minister said President Muhammadu Buhari had  set up a cabinet committee that would  devise innovative and creative ways to raise additional revenues from the oil and other sectors.

He said the report of the committee would be ready in time for the National Assembly to take into account in considering the budget in 2017.

“We must maximise the resources we can generate from the oil and gas sector. We cannot determine the price of crude oil, but we can engage more extensively with the communities and people of the Niger Delta to minimise disruptions to oil production,” he stated.

He said in order to get out of the current recession, the government must find the resources to spend on infrastructure and reflating the economy.

According to him, “This spending will help to stimulate and attract the private sector capital and spending. This is what the 2017 budget proposals seek to do.

“We should not allow ourselves to be discouraged by those who say we can’t find the money to fund the spending required to implement this budget.”
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