In what has been described as a practical expression of the Federal Government’s determination to deliver the draft 2013 budget on schedule for the early consideration of the National Assembly in September, the Federal Executive Council today discussed a memorandum on the 2013-2015 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper.
The memorandum which sets the broad framework and priorities of the budget was submitted to the cabinet by the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala.
Simultaneously, the Federal Government said it is intensifying efforts to ensure further improvement in the implementation level of the current budget. The implementation level, as at June 20, following four months of implementation starting from April, is 41.3%.
President Goodluck Jonathan who is said to be personally leading the drive for higher performance has been meeting with ministers to ensure that the momentum is maintained.
A statement today by Paul C Nwabuikwu senior special assistant to the coordinating minister for the economy and minister of finance said the 2013 budget proposal is anchored on the key goal of the 2013-2015 Medium Term Expenditure Framework – fiscal consolidation with growth and job creation. To achieve this, the resources of the country will be managed prudently and transparently while ensuring priority is given to the key growth sectors of the economy and national security.
Fundamentally, the focus of the Federal Government’s proposals on Budget 2013 as reflected in the Medium Term Expenditure Framework and the Fiscal Strategy Paper is that the budget should make practical impact on the areas that matter most to the Nigerian people – job creation, power supply, roads, rail, other infrastructure and, of course, agriculture.
To help achieve this central objective, a key proposal of the Fiscal Strategy Paper is the continuation of the downward trend in recurrent expenditure and upward trend in capital expenditure. Specifically, recurrent expenditure will decline from 71.47% in 2012 to 68.66% in 2013 and continue to decline in the medium-term. Within the same period, capital expenditure is expected to rise from 28.53% in 2012 to 31.34% in 2013 and will continue in like manner in the medium-term.
In the same vein, the government is putting in place for the first time a strong strategy for managing domestic debt. The first part of this strategy is to ensure a decline in fiscal deficit and domestic borrowing from 2.85% and N744.44bn in 2012 to 2.17% and N727.19 billion in 2013 respectively with further decline up to 2015. The second part is the creation of a sinking fund of N25 billion yearly to accumulate money for paying off bonds.
Broadly, the focus will be on improving aggregate revenue receipts, optimizing expenditure and keeping the fiscal deficit at a reasonable level.
The proposals for the 2013 budget are based on a rigorous review of the performance of the global economy with regard to negative economic developments around the world which have the potential to negatively impact the country’s economy. Based on a foundation of prudence, the proposals represent a robust response to these developments anchored on a strong macroeconomic framework.
The 2013-2015 Fiscal Strategy Paper and Medium Term Expenditure Framework are statutory documents which articulate Government’s fiscal plan and policy objectives over the period and are updated annually. The MTEF includes the Medium-Term Revenue and Expenditure Frameworks, both of which outline principal components of the Government’s public expenditure management plan.
The aim is to ensure that planned spending is set at prudent and sustainable levels and is consistent with Government’s overall medium-term fiscal objectives.