Monetary Policy

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The Conduct of Fiscal Policy

Fiscal Policy 2001
The policy thrusts of the 2001 budget were restructuring of the Nigerian economy to make it market-oriented, private sector- led and technology driven; reducing unemployment and raising productivity; improving the performance of major infrastructures and enhancing transparency and accountability in governance to ensure value for money in public expenditure. Fiscal measures included tax relieves and allowances, a low income tax regime and exemption of public pensions from taxation, and exemption of locally produced basic food items from the Value Added Tax (VAT) to encourage production. Accordingly, the total budgeted revenue for the year was N2,126.5 billion of which oil revenue was estimated at N1,673.2 billion, and non-oil revenue, N453.3 billion. The budgeted expenditures were: capital expenditure, N511.93 billion (or 55%); recurrent expenditure, N424.86 billion (or 44.5%); and external debt service, N150 billion. The fiscal operations of the government were expected to result in a deficit of N201.5 billion or 6.2% of GDP.

The total federally collected revenue for the year was N2,231.5 billion made up N1,707.6 billion as oil revenue and N903.5 billion, non-oil revenue. Revenue accruing to the Federation Account was N1,427.4 billion; and the Federal government retained revenue was N797.0 billion. Total expenditure by the government amounted to N1,018.0 billion of which N579.3 billion or (57%) was recurrent while N438.7 billion was capital expenditure. The fiscal operations resulted in a current account surplus of N217.6 billion representing 4.6% of GDP. However there was an overall deficit of N221.0 billion or 4.7% of GDP which was largely financed by borrowing from the banking system to the tune of N136.7 billion and credit from the domestic economy, N118.7 billion.