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FG, states to share N327bn oil windfall
DAVID AGBA,
Abuja
AMID
controversy over what to do with the N327 billion excess crude, revenue, the
Federal Government is negotiating with governors on what percentage should be
set aside to cushion negative effects on oil price volatility on the economy.
Government made the announcement just as
indications emerged yesterday that next year’s budget estimate may be predicated
on $23 per barrel, even as Finance Minister, Dr. (Mrs.) Ngozi Okonjo-Iweala told
the House of Representatives on the likely monetary and fiscal policies in the
budget.
At this year’s ministerial briefing of her
ministry in Abuja, the minister said the consultations and negotiations with the
governors will be captured in a fiscal responsibility bill and presented to the
National Assembly for debate and possible passage into law.
Highlights of the briefing included an
overview of the economy which she said recorded improvements last year.
She said the Gross Domestic Product (GDP)
at 1990 constant prices increased from N356.28 billion in 2002 to N392.76
billion in 2003, a 10.2 per cent growth.
"The nominal oil sector GDP increased by
25 per cent, non-oil GDP increased by four per cent per annum, while the
agricultural sector grew by seven per cent against 4.2 per cent in 2002", she
added.
Mrs. Okonjo-Iweala said the oil sector
real GDP grew by 23.9 per cent last year as against a decline of 5.7 per cent in
2002.
Giving an overview of the economy during
the period, she said inflation at 17.8 per cent continues to be a problem,
noting that the high rate was due mainly to the current high level of oil price
on the international as well as other cost-push factors.
"High interest rate is also a key
macro-economic challenge, even as the pace of investments is beginning to pick
up with an investment of 30 million Swiss Francs made by Nestle, after years of
continuous disinvestment from Nigeria," she said.
On disbursements from the Federation
Account, the minister said N2,384.5199 billion was collected from the account in
2003, compared with N1,502.9841 billion collected in 2002.
This, he said, reflects an increase of
N881.5358 billion or 58 per cent while net Federation Account receipts after
deductions for the first-line charges of N563.5099 million or 23.6 per cent
stood at N1,821.01 billion.
The minister noted that of the N821.009
billion distributed from the Federation Accounts last year, N917.104 billion
went to the Federal Government, N419.8450 billion to the states and Federal
Capital Territory (FCT) and N346.8659 billion to the local governments including
the area councils of the FCT.
She said N137.1946 billion was paid into
the derivation account, attributing this performance to the unexpected, but
quite substantial rise in the high international price of crude oil.
The minister while highlighting on the
2004 budget monitoring, said that the report for the first six months (January -
June) would be out in two weeks’ time.
The highlights included
federally-collected oil revenue of N1,509 billion in the first half of the year,
29 per cent higher than the budgeted amount of N1,172 billion.
She attributed this to favourable crude
oil price which averaged $33 per barrel as against the budgeted price of $25 per
barrel.
Total non-oil receipts during the period
was N236 billion or 10 per cent bellow the N262 billion projection in the
budget, she noted.
On the nation’s debt profile, Mrs.
Okonjo-Iweala said Nigeria has signed bilateral debt re-scheduling agreements
with 12 of the 15-member Paris Club.
These are United Kingdom (UK), Spain,
Belgium, Japan, United States of America (USA), the Netherlands and Australia.
Others are Denmark, Israel, Switzerland,
France, Brazil envisaging that by the end of the third quarter of this year,
bilateral agreements would have been concluded with the remaining three
countries - Italy, Finland and Russia.
On the Outstanding debt stock,
Okonjo-Iweala said the external debt by last December was $32.91681 billion as
against $30.99187 billion at December 2002.
A breakdown of this shows that $27.46992
billion or 83.45 per cent is owed Paris Club, $3.0428 billion or 9.24 per cent
to multilateral institutions. $1.44179 billion or 4.38 per cent to the London
Club, $911.39 million or 2.77 per cent to the promissory note holders, while
$51.63 million or 0.16 per cent was owed non-Paris Club creditors.
Meanwhile, at the resumed meeting
yesterday with the House Committee on Finance, the minister said President
Olusegun Obasanjo is expected to present the budget proposal to the National
Assembly next month for consideration.
Stating that Mr. President may read the
approved 2005 budget next January 1, she also told the committee that Obasanjo
had so far complemented 33 per cent of the capital vote in this year’s budget.
According to her, this was an impressive
performance considering that the this year’s budget came into effect in April.
Mrs. Okonjo-Iweala said the meeting was to
brief the House on the work so far done of the ministry on the 2005 budget.
According to her, the relevant ministries
and parastatals had started working their input into the draft appropriation,
adding that the President may present the document to the law makers next month
(September).
Although the minister was not specific on
the likely policy directive of the government in the 2005, feelers from the
meeting which was later held behind closed door, yesterday suggested that this
presidency may consolidate on the oil bench mark of $25 for the 2004.
Sources, however, said the ministry may
have proposed a bench mark of between $23 and $25 for the next year’s budget.
But before asking the journalists to leave
venue of the meeting yesterday, the committee chairman, Hon. Farouk Lawan, said
the parley was to give the 2005 budget estimate accelerated passage.
According to him, the presidency had
indeed kept faith to the agreed weekly and quarterly report on the performance
of the 2004 which he said was healthy for democracy.
He said the committee had observed a
positive departure from the manner the previous budget were implemented, adding
that the minister had kept with her promises of briefing the House on the state
of the budget.
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