Conduct of Fiscal Policy

The Conduct of Fiscal Policy

Fiscal Policy 2002
The fiscal policies of the 2002 budget were derived from the macro-economic framework of the 2001-2003 Rolling Plan which sought to maintain disciplined fiscal and monetary policy, continue the liberalization of the economy to attract support from the international community and the multilateral institutions as well as sustain transparency, accountability and obtain value for money in government expenditures. Other broad objectives were to eradicate poverty by fostering opportunities for job creation; achieve high economic growth rate through better mobilization and better use of economic resources; build a strong economy by encouraging private sector participation while continuing the reforms.

The specific fiscal policies in the 2002 budget were the continuation of privatization of government investments and public utilities; striving towards a GDP growth rate of at least 5%; minimizing budget deficit and eliminating extra budgetary expenditure; targeting a moderate inflation rate; reducing the level of unemployment through increased capacity utilization and encouragement of self-employment; diversifying the revenue base of the economy through appropriate fiscal incentives to investment in agro-allied industries, gas, solid minerals, petrochemicals and tourism; encouraging foreign investment through increased liberalization and pursuing debt service and debt stock reduction through dialogue with the Bretton Woods institutions and the Paris Club of creditors. In order to achieve the above objectives the government budgeted a total revenue of N1, 860.9 billion, made of N1, 317.6 billion from oil and N543.3 billion from non-oil sources. The total estimated expenditure for year 2002 was N894.7 billion, of which N543 billion was for recurrent and N297 billion for capital expenditures, respectively.

In 2002, the government realized a total of N1, 731.8 billion, made up of N1, 230.9 billion in oil and N501 billion in non-oil revenues. Federation account revenue was N1, 899.5 billion, while Federal Government retained revenue was N716.8 billion. Actual expenditure was N1, 018.2 billion, leading to a current account surplus of N20 billion and an overall deficit of N301.4 billion. This was 3.9 % of GDP and was financed mainly by the Central Bank of Nigeria.