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The Conduct of Fiscal Policy
Fiscal Policy 2005
The main thrust of the 2005 budget was to build the physical and social infrastructure necessary for job creation and maintain fiscal discipline. The government sought to maintain a fiscal deficit of 2.9% of GDP, pay contractor debt arrears and complete on-going projects. The emphasis was on involving the private sector in the management of public investment and also provides safety-nets targeted mainly at the youth, women and children to cushion the impact of the reforms.
The budgeted total revenue was N3, 619 billion made up of N2, 902 billion from oil and N563 billion from non-oil sources. After making allowance for Federation accounts allocation, the Federal Government retained revenue was estimated at N1, 304 billion. Total estimated expenditure was N1, 618 billion, which resulted in a projected deficit of N314 billion.
The actual gross revenue earned by the country was N5, 547.5 billion, out of which oil accounted for N4, 762.4 billion (85.84%) while non-oil revenue was N785.1 billion (14.15%).
Federation account revenue was N2, 657.2 billion, while Federal government retained revenue was N1, 660.7 billion. Total expenditure was N1, 822.1billion, made up of N1, 223.7 billion for recurrent and N519.5 billion for capital expenditures, respectively. The fiscal operations of the Federal Government led to a current account surplus of N437.0 billion and an overall deficit of N161.4 billion or1.1% of GDP. This deficit was financed through domestic non-bank sources.