FEDERAL REPUBLIC OF NIGERIA

OVERVIEW OF THE 2015 BUDGET PROPOSAL

“A Transition Budget”

DR. NGOZI OKONJO-IWEALA

COORDINATING MINISTER FOR THE ECONOMY AND
MINISTER OF FINANCE

17 December 2014

PROTOCOL
1. I am pleased to welcome you all to this public presentation of the proposed Federal Government Budget for 2015. As I present the fourth budget of this Administration which is the last before the general elections, I can say with confidence that significant achievements have been recorded by the federal government to deliver on its commitments. Let me first express my profound appreciation to H.E President Goodluck Ebele Jonathan whose leadership and commitment have made economic achievements possible. Let me also thank H.E Vice President Namadi Sambo whose guidance on numerous issues have been most impactful. Most of all my colleagues in the Economic Management Team have worked so hard to make our achievements visible.

2. I would also like to acknowledge the efforts of the Leadership of the National Assembly and its relevant committees for their contributions to the budget process. Over the 2011 – 2014 period, the Federal Government Budgets faced some difficulties before their eventual finalization. Both the Executive and the Legislature have taken the necessary lessons from this, and we have thus far, seen smoother collaboration on the preparation of the 2015 Budget. I thank the leadership and membership of the National Assembly for this cooperation.

3. Let me also thank the Members of the Federal Executive Council and particularly my fellow honourable Ministers for their understanding, especially with the challenge of having to draw up their budgets within limited resources imposed by our fiscal restructuring exigencies. I would also like to acknowledge the efforts of all other stakeholders including the press, the organized private sector, civil society organizations and especially the staff of the Budget Office of the Federation and the Ministry of Finance for their contributions and hard work in preparing the Budget.

4. Finally, I want to thank the Nigerian public. As I move around the country, I have never felt so much sympathy, respect, and support as I have felt from members of the Nigerian Public. Thank you for understanding that these are challenging times, thank you for understanding that my team and I are doing our best to keep the economy on a steady course. Truly, the Budget is our collective statement – a product of many constructive contributions - which has enabled us to prepare the Budget under the very difficult circumstances the nation is going through.
5. Ladies and Gentlemen, before I go further, I will like to say a few words on the 2014 budget and its implementation.

REVIEW OF THE 2014 BUDGET IMPLEMENTATION
6. We are approaching the end of a particularly difficult fiscal year that brought us quite a few obstacles as we moved ahead on the chosen path of fiscal consolidation and inclusive economic growth.

7. There have been challenges to the realization of the 2014 Budget revenue projections. For a number of reasons chief among which is oil pipeline vandalism and the resulting “shut-ins”, we faced a quantity shock in the sense that the quantity of oil produced averaged about 2.2 million bpd in the first 3 quarters of 2014 according to NBS data, falling short of the 2.38 million bpd projected in the Budget. The effects of this quantity shock is further compounded by the more recent price shock, with prices crashing from a peak of about $114 pb earlier in June, to around $58 pb now, which is below the Budget benchmark price of $77.5 pb for this year. As a result, revenues will fall short of the Budget targets of N3.73 trillion. As at the end of October, total revenues were about N2.72 trillion, so we won’t know the extent of the shortfall until government closes its books at the end of the year.

8. But in spite of this challenge, we have managed to keep the country running. Recurrent Expenditure is being paid and government is running. We are aware of some MDAs, e.g. Education, where salary payments are delayed due to glitches in IPPIS. This is being rectified and all will be paid this December. Capital expenditure however has suffered. We could not cashback N100 billion of 3rd quarter capital and have not been able to release 4th quarter capital. Nevertheless, we have managed to keep most of our priority projects going with the support of SURE-P resources. Of the N1.12 trillion in the Budget, the sum of N610 billion has been released (as at the end of October) with N465 billion of this amount only fully cash-backed. About 83.5 percent of the amount cash-backed had been utilized by MDAs as at the end of October.

9. The implementation of the SURE-P Budget improved in 2014. We voted a sum of N268.37 billion for various social safety net programmes and infrastructure projects. So far, N208.3 billion or a very robust 78% of this amount has been spent on various job creation initiatives and infrastructure projects. The SURE-P programme continues to support Social Safety Net programmes like Save One Million Lives which has saved over 631,250 lives by giving renewed priority to health interventions including nutrition, prevention of mother to child transmission of HIV, malaria control, and routine immunization.
10. Job creation efforts under SURE-P are doing well with the Graduate Internship Scheme (GIS) hiring and deploying 13,339 graduates so far and the Community Services, Women and Youth Employment (CSWYE) creating nearly 120,000 jobs for youth with a minimum of 3,000 in each state and the FCT. Several infrastructure projects across the country – such as the Lagos-Kano railway, the Abuja-Lokoja road, and the rehabilitation of the Benin-Ore-Shagamu road – were completed or advanced through SURE-P resources. The Ministry of Finance continues to publish the SURE-P savings in the newspapers every month to ensure transparency, and I assure you that our savings from fuel subsidy removal have been put to good use for the benefit of all Nigerians.

11. Ladies and Gentlemen, let me now turn to the 2015 Budget and take a few moments to provide some context.

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