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The Conduct of Fiscal Policy
Fiscal Policy 1998
The main policy thrust of the 1998 federal budget was the stimulation of production to effectively address the twin problems of unemployment and poverty reduction. Measures were adopted to encourage productive activities in the private sector. Fiscal measures included a low tax regime to stimulate consumption demand, coupled with tax incentives for the export-processing zones, solid minerals, oil and gas, and the manufacturing sector.
Accordingly the budgeted gross revenue was N 424 billion of which N 143 billion and N117 billion were budgeted for capital and recurrent expenditures respectively
The total federally collected revenue for the year was N 463.609 billion made up N 324.311 billion as oil revenue and N139.298 billion non-oil revenue. Revenue accruing to the Federation Account was N 257.331 billion; and the Federal government retained revenue was N353.724 billion. Total expenditure by the government amounted to N 487.113 billion of which N178. 098 billion or (36.6%) was recurrent while N 309. 016 billion was capital expenditure. The fiscal operations resulted in a current account surplus of N175.626 billion representing 3.7% of GDP. However there was an overall deficit of N133.389 billion or 4.7% of GDP, which was financed largely by borrowing from the banking system.