The N101.3 billion deficit recorded in the first seven months of the year will be financed with the Abacha loots, Finance Minister, Dr. Ngozi Okonjo-Iweala has said.
The minister and the Director of Research of the Central Bank of Nigeria, Dr. Joseph Nnanna, on Tuesday confirmed earlier reports of the deficit but explained that the Federal Government had neither touched the excess crude oil proceeds nor asked for ways and means from CBN.
Okonjo-Iweala and Nnanna, speaking with newsmen in Abuja at the end of a meeting of the monetary Policy Committee said the deficit was well within the target set for the year.
CBN, in a document prepared for a meeting of its MPC, had confirmed that the government financed its seven-months deficit from ways and means advances from CBN, excess crude proceeds and other funds.
CBN in the document said, "During the first seven-months of 2004, the fiscal operation of the Federal Government was estimated to have resulted in a deficit of N101.3 billion, as against N110 billion in the corresponding period of 2003. The deficit was financed from ways and means advances from the CBN, excess crude proceeds and other funds."
Reacting to reports by the media on Monday on the government deficit financing, the Finance minister explained that it would be financed by looted funds and not from excess crude proceeds, which she revealed currently stood at N386 billion as at August 2004.
The minister said, "Remember that when we made the 2004 budget, we projected a deficit of N181 billion, which is totally in order. In fact, we are performing quite well. How is that deficit to be financed? We have the looted funds that are coming? You heard the news from the Swiss Government; we are not at the point where we are desperate.
"That money will come in and that will help us finance the spending we have done on education, on health, on infrastructure. All these spending we have done was in anticipation of that money coming. This money will now come to block that gap.
"Let me tell you that as at end of August, the excess crude account was N386 billion. The money has not been touched; no single kobo has been spent. All stakeholders that this money belongs to will have to come together to agree on how this should be spent," the Minister of Finance explained.
CBN research director also denied that the government had resorted to financing its deficit through excess crude proceeds.
Nnanna in a statement released late on Tuesday affirmed that the Federal Government had not spent any of the excess crude oil earnings ever since it was decided that they would be saved.
He explained that the report of the Monetary Policy Committee�s final report cited by the media specifically referred to the excess crude revenue which accrued in 2003.
�When Mr. President presented the 2004 budget, the provisional crude oil benchmark price which was used was 523 per barrel. However, the National Assembly approved $25 per barrel and this became the ruling benchmark budget price.
�The excess proceeds accruing from the difference between the provisional and the approved budget benchmark price was $151.86 million as at August 31, 2004. This amount is the only component of the excess crude proceeds which have been monetised and shared by the three-tiers of government.�
Meanwhile, Okonjo-Iweala has given the thumbs up to the economy saying the present team had done very well in the management of the recovery effort.
Speaking at the end of the meeting with the National Working Committee in Abuja, the minister said, "Basically, we are doing quite well in terms of the economy. The inflation rate is coming down. We are managing our budget quite well so that all the primary indicators for the macro-economic are in the right direction.�
"The June to June inflation rate is 14.1 per cent which is lower than it has been in the recent past. Even, the July-to-July inflation rate is 10.9 per cent. So, it is a trend in the right direction and that is what we are happy about," she added.
Concerning projects, she said, "The implementation of projects is going on in various ministries and we are going to speed up even more.
"The party wanted to be briefed about where we stand so far in terms of the economy, in terms of the implementation of our budget.
"It was a very good, friendly and supportive session. I am very grateful to the party's National chairman, Secretary and all the party members who were there."
As at press time, the NWC was still meeting with some public officers and a communiqu� was being awaited.
Worried by criticisms over alleged wobbling of the nation's economy, the Peoples Democratic Party on Monday summoned the Minister of Finance and four others for a meeting with members of its National Working Committee today (Tuesday).
It was also learnt that the meeting, which was designed for stocktaking on the state of the nation would also enable the party to relate the pulse of Nigerians to the affected public officers.
Those who appeared before the NWC were the Minister of Education, Prof. Fabian Osuji; the Executive Secretary of the National Universities Commission, Prof. Okebukola, Iweala; the Special Assistant to the President and Head of Budget Monitoring, Mrs. Oby Ezekwesili; and the National Coordinator of the National Poverty Eradication Programme, Dr. Magnus Kpakol.
It was learnt that the party leadership would use the meeting to collate facts and figures on the affected sub-sectors and make a comparative study of complaints and criticisms of the government.
