•Pegs $42.50 oil benchmark for 2017
From Juliana Taiwo-Obalonye, Abuja
The Federal Executive Council (FEC) on Wednesday in Abuja approved the Medium Term Expenditure Framework (MTEF) and Fiscal Strategic Paper (FSP) for 2017 to 2019.
The Minister of Budget and National Planning, Mr Udoma Udo-Udoma, made this known while briefing State House correspondents after the Federal Executive Council (FEC) meeting which was presided over by President Muhammadu Buhari. He revealed that there was extensive consultation with stakeholders, including state governors and Non-Governmental Organisations (NGOs) before the document was presented to FEC for the approval.
According to him, it is on the basis of the approved MTEF that the 2017, 2018 and 2019 budgets will be fashioned.
Udo-Udoma said “today, the Federal Executive Council approved Medium Term Expenditure Framework and Fiscal Strategy Paper for 2017 to 2019, that is, the MTEF and the FSP for the next three years.
“As you know, the Fiscal Responsibility Act requires the executive to prepare the MTEF and send it to the National Assembly for consideration. And it is on the basis of the MTEF that the next budget will be fashioned. So, in short, we have started the process of preparing the 2017 budget.
“Before the MTEF was presented to FEC for consideration, there was extensive consultation with the private sector, governors and NGOs.’’
According to him, the government intends to intensify efforts in pursuing manpower driven economy in the 2017-2019 MTEF.
He maintained that with the MTEF, government intended to pursue gender sensitive, pro-poor and inclusive social intervention schemes similar to the 2016 social intervention programmes.
He said “we intend to intensify effort to diversify the economy, we intend to go on with the implementation of ongoing reforms in public finance, we intend to enhance the environment for ease of business so as to generate private sector and private investment.
He noted that the Federal Government had fixed 42.5 dollars per barrel and 2.2 million barrel per day production of crude oil as assumptions for the 2017 budget.
“We intend to use 42.50 dollars as reference price in 2017. We are projecting 45 dollars in 2018 and 50 dollars in 2019.
“So, we are keeping to the very conservative in terms of the reference price of crude oil, even though we are expecting it to go higher than this. But, we are keeping to an extremely conservative price scenario.
“In terms of oil production, we are keeping to the same level of this year for 2017 and that is 2.2 million barrels per day.
“For 2018, 2.3 million barrels per day; and for 2019, 2.4 million barrels per day. In terms of growth rate, we are targeting three per cent growth rate in 2017 and 4.26 per cent growth rate in 2018 and a 4.04 per cent growth rate in 2019.
The minister explained that the 2019 rate was slightly lower than 2018 because 2019 would be an election year.
The Minister of Trade and Industry, Mr Okechukwu Enelamah, also disclosed that FEC had ratified the World Trade Organisation’s Trade Facilitation Agreement.
According to him, the agreement seeks to reduce the cost of doing business among members of the WTO
“Council also approved the ratification of the World Trade Organisation (WTO) Trade Facilitation agreement.
“This is an agreement approved by all members of WTO in the ministerial conference that was held in 2013. What that agreement seeks to do is basically to lower the cost of trade generally for everybody,” he said.
“There was clear understanding that everybody benefits from lowering the cost of doing trade, it is particularly beneficial to developing countries that want to be able to access the international market.
“Nigeria was one of the countries that approved the agreement then, and we have been going through the process to ratify the agreement so that it would come into effect.
“The idea is that the agreement will come into effect when it is ratified by two thirds of all the countries that approved it originally; we think that will hap