By Modupe Gbadeyanka
The process for the commencement of next year’s budget has been approved by the Federal Executive Council (FEC).
At the FEC meeting held on Wednesday in Abuja, which was presided over by President Muhammadu Buhari, the Minister of Budget and National Planning, Mr Udoma Udoma, told newsmen that the Medium Term Expenditure Framework (MTEFF) and Fiscal Strategy Paper (SFP) for 2017-2019 was okayed by the council.
According to Mr Udoma, before the MTEFF was presented to the council for consideration, there was an extensive consultation with the private sector, governors and non-governmental organisations.
He explained that while the government envisioned $42.50 as oil price in 2017, it projected $45 as the price in 2018 and $50 in 2019.
“As you know, the Fiscal Responsibility Act requires the executive to prepare the MTEFF and send it on to the National Assembly for their consideration. And it is on the basis of the MTEFF that the next budget will be fashioned. So, in short, we’ve started the process of preparing the 2017 budget,” Mr Udoma said.
“So, we are keeping to the very conservative in terms of the reference price of crude oil even though we are expecting it to go higher than this. But we are keeping to an extremely conservative price scenario,” he added.
The Minister disclosed further that, “In terms of oil production, we are keeping to the same level of this year for 2017 and that is 2.2m barrels per day. For 2018, 2.3m barrels per day; for 2019, 2.4 m barrels per day.”
On why oil price was used as a benchmark when the government was talking about diversification of the economy, Mr Udoma explained that even though FG wants to diversify, it must still use a particular number to plan in terms of revenue from crude oil.
“It doesn’t mean we don’t use numbers for other receipts. I was just reading the highlights,” he maintained.
According to him, “We have numbers for everything; we have numbers we expect to get from customs, VAT, independent revenue, etc. So, we have numbers for all the things we expect, but because oil is volatile and is an area that has caused us to be where we are today, we want to assure Nigerians we are not going backing to using high estimates even though we sense that prices may be moving towards $60 per barrel in the next year or so, we are still going to use conservative number.”