2014 budget: FG to maintain N4.9tn spending target

The Federal Government is planning to spend N4.9tn ($30.96bn) in 2014, little changed from this year, amid government expectations of reduced oil production, Bloomberg has reported.

Budget proposals submitted by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, to lawmakers on Thursday in Abuja on behalf of President Goodluck Jonathan are based on an oil output of 2.39 million barrels a day and a price of $77.5 a barrel.

The economy will expand 6.75 per cent next year, faster than this year’s 6.5 per cent estimate, with the budget deficit increasing to 1.9 per cent of Gross Domestic Product from 1.2 per cent this year.

The government will use an exchange rate of N160 a dollar to calculate its expenditure, according to the minister.

Oil output estimate for next year is six per cent, lower than the figure of 2.53 million barrels a day used for this year’s spending plan.

In his medium-term expenditure proposals sent to the lawmakers in September, Jonathan said revenue from crude exports was expected to drop in 2014.

The country depends on oil for about 80 per cent of government funds and more than 95 per cent of foreign income, according to the Finance Ministry.

The budget is the last before the 2015 election year, when Jonathan as well as lawmakers and state governors are due to seek new mandates in general elections.

According to Bloomberg, Jonathan hasn’t said whether he plans to stand for re-election, though he has come under pressure from some party factions not to run.

Former President Olusegun Obasanjo has criticised him for failing to tackle corruption, and his ruling Peoples Democratic Party has been hit by a string of defections to the main opposition group, the All Progressives Congress.

The nation’s long-delayed plan to rebase its GDP figures next year may boost the assessment of the size of its economy by as much as 60 per cent, which would see it overtake South Africa as the continent’s largest nation in terms of total wealth, according to the Renaissance Capital Limited on Wednesday.