MPC Mandate of the CBN | Fiscal Policy | Committees | Calendar of Meetings | Educational | FAQ's | Policy Decisions | Policy Communiques | Intl. Economic Cooperations | Monetary Policy Review | Policy Measures | Understanding Monetary Policy Series | Monetary, Credit, Foreign Trade and Exchange policy Guidelines | Monetary Policy Committee Reforms | AfCFTA
The Conduct of Fiscal Policy
THE AMENDED AND SUPPLEMENTARY BUDGETS OF 2009
The 2009 Appropriation Act and Supplementary Bills (I & II)The 2009 Budget was based on the 2009-2011 Medium-Term Expenditure Framework. The priorities of Government as defined by the 7-Point Agenda set the guidelines for the allocation of resources in the 2009 Budget. Hence, spending was focused on critical infrastructure expansion, human capital development, food security and land reform, transformation of the Niger Delta, security, law and order and wealth creation.
Mr. President assented to the 2009 Appropriation Act in March 2009. The Act approved N2,265 billion as the Federal Budget revenue; aggregate expenditure of N3,102 billion, comprising N1,022 billion as Capital Expenditure, and N1,627 billion as Recurrent spending. N168.62 billion was allocated for Statutory Transfers while N283.65 billion was set aside for Debt Service.
The first supplementary budget was made in August 2009. It was designed to address essential expenditure that was not provided for in the 2009 Appropriation Act such as the negotiated Academic Staff Union of Universities (ASUU) settlement, amnesty initiative in the Niger Delta etc. Total spending of N102.27 billion was approved, of which N4.9 billion was allocated to capital expenditure while N97.37 billion was allocated to recurrent expenditure. A second supplementary budget, which was designed as a stimulus budget was adopted in late 2009. It focused primarily on the Niger Delta, critical infrastructure and social palliatives. Out of the total spending of N353.6 billion, N253.55 billion was allocated to capital spending while N100.05 billion was set aside for recurrent spending.
2009 Budget Performance:Revenue
The Federal Government aggregate revenue was projected at N2,265 billion. The actual revenue receipts amounted to N1,704.99 billion (excluding financing items) thus falling short of the target by N560.01 billion (or 24.72 per cent) as at end-December 2009. The Federal Government's share of oil revenue was N817.5 billion, indicating a shortfall of N151.57 billion (or 15.64 per cent) when compared with N969.07 billion projected for the FGN budget in 2009. The Federal Government's share of VAT, CIT and Customs Duties fell short of the N882.75 billion target by N350.23 billion (or 39.67 per cent) with only N532.52 billion realised. Independent revenue also underperformed as only N71.24 billion was realised against the expected sum of N305.97 billion in the period.
The poor performance of oil revenue was attributable to oil production shut-ins which averaged 155,000 barrels per day and mainly affected Joint Venture productions, from which Government gets the most revenue, and gas sales. Non-oil targets were not met due to the effects of the global economic recession on trade activities, the effects of the banking sector crisis on CIT collections and availability of credit to finance investment activities.
Aggregate expenditure approved in the 2009 Budgets amounted to N3,558 billion, of which N1,281 billion, N1,825 billion, N168.62 billion and N283.65 billion was allocated to Capital Expenditure, Recurrent Spending, Statutory Transfers and Debt Service, respectively. The fiscal year was extended to March 31, 2010 as the 2nd supplementary budget was approved late in 2009 leaving the MDAs with insufficient time to utilise funds released for capital projects. Data from the Office of the Accountant General of the Federation (OAGF) indicated that N919.48 billion was utilised by the MDAs as at March 31, 2010 which resulted in average capital utilisation of about 77.13 per cent. This was an improvement on the 60.59 per cent performance as at end-December, 2009. The actual expenditure for 2009 was N3,054.34 billion.
The total level of deficit (financing) stood at N1,349.35 billion compared with N1,292.47 billion projected for the FGN budget in 2009 representing an increase of N56.88 billion or 4.40 per cent.