2004 Budget Speech
by
His Excellency President Olusegun Obasanjo
At the
Joint Session of the National Assembly Abuja, Thursday, December
18, 2003
Protocol
INTRODUCTION
Let me
explain that the reforms that we have embarked upon including
the budget reform has caused delay in making this presentation
to you.
Today, I am pleased to present the 2004 Appropriation Bill to
the Joint Session of the National Assembly. In my inaugural
speech on May 29, 2003, I said the economy would be my principal
focus during this second administration. To that effect, shortly
after the swearing in of the new Cabinet, I assembled an
economic team headed by the Honourable Minister of Finance, and
together we set out an economic reform agenda for 2004 and
beyond, designed to reinvigorate the economy and put it on the
path to sustainable growth, development and poverty reduction.
We have consulted with the National Assembly on this reform
programme and received valuable inputs for which I want to thank
you. We have also consulted widely with the rest of the country
including the organized private sector, Governors and State and
Local
Government
officials, civil society, religious leaders, traditional rulers,
labour, academics and senior managers in our tertiary
institutions, the political class, the military , police and
paramilitary . The feedback has been good and very valuable. It
has enabled us to strengthen and enrich the programme.
The 2004
Appropriation Bill before you is designed to underpin and
support the reform programme. The reform programme is about
people. It puts the priorities of the average Nigerian at the
centre by focusing on job creation and employment generation for
our youth through support for an enabling environment for the
private sector so that it can create jobs. We are looking to job
creation particularly in our non-oil productive sectors so that
we can diversify our economic base. It is about enhancing the
quality of life of the people including food security. The
sectors with great potential are agriculture, solid mineral
development, manufacturing, services including tourism,
information technology
and the video industry , small- and medium-scale enterprises and
the oil and gas sector. The reform programme also focuses on the
provision of basic infrastructural services such as roads, water
supply and electricity so that the productive capabilities in
the economy are enhanced and maximized. It supports improved
delivery of basic social services such as education and health
with particular emphasis on H IV / AIDS and malaria prevention
and control and improved health delivery infrastructure. It also
provides for increased security for all our citizens so that
they can go about their daily lives free of fear, threats and
intimidation by criminals.
REFORMS
The four broad areas of reform are:
a) Accelerated Privatisation, Liberalisation and Private Sector
Development: We are continuing with and accelerating our
programme of privatization. We have had considerable success,
now widely acknowledged, in the area of telecommunications. We
intend to complete the work there by improving GSM services and
coverage and privatizing NITEL Liberalization of the telecoms
sector is creating jobs.
We now
have over 2.5 million wireless lines in two years compared to
just under 450,000 land lines created in all of NITEL's history.
Our GSM companies must add more local value by, for example,
printing rather than importing the recharge cards we use, and
they must improve on the quality of their services
-inter-connectivity and reduction in charges. We are working
with them and with other telecommunications service providers on
an incentive-driven action plan to improve service delivery .We
have deregulated the downstream petroleum sector, phased out
subsidies and put up our refineries for sale. This action is
already making supplies more freely available and with time the
cost of . products will come down just as it has started to
happen in the telecoms sector. We are focused on strengthening,
and unbundling key aspects of our power generation, transmission
and distribution so that we can privatize NEPA. We must realize
that power is a complicated sector that will require some
institutional and regulatory foundations to be laid for
successful liberalization and privatization. In the meantime,
NEPA must step up its efficiency in terms of service delivery
and improve its revenue collection. Targets are being set to
enable NEPA to focus on such improvements. We shall be
concessioning our railway, ports and airports, and privatizing
other necessary enterprises. The government must focus on its
core business of providing public goods whilst letting the
private sector alone or, in partnership with the public sector ,
deal with production. As we privatize, we must strengthen our
regulatory functions and frameworks in telecommunications,power,
petroleum, transport and aviation so that citizens and
businesses are given a fair deal and their rights protected. The
full programme for our privatization efforts along with
timelines are available on the BPE, and Ministry of Finance
reform websites. .
b)
Anti-Corruption, Transparency and Accountability: Corruption
is one most important issue confronting our development and we
must fight it everywhere with all we have got. With the recent
actions we have undertaken on the ID card affair, and with our
continuing efforts, several of which will soon bear fruit, we
are showing our resolve. The reform programme focuses on
specific measures that confront corruption head on, Improve
transparency, and highlight the fact that corruption and
economic crimes do not pay. Government contracting has
unfortunately been one of the main avenues for corruption in our
country .We have had a considerable measure of success with the
Due Process Mechanism of reviewing the unit costs of contracts.
This process, now well institutionalized, has brought contract
costs down and saved the government close to N60 billion in the
last two years. We are extending the Due Process Mechanism to
encompass procurement reforms in government contracting. We are
developing guidelines and implementation aids for government
procurement. A Procurement Commission will be created to oversee
the whole reform and provide oversight to this important area. A
Procurement Commission draft Bill is under revision for your
consideration to be passed into law at a later date. To
complement the work being done under Due Process and Procurement
reforms, the Ministry of Finance is launching a new process
called RUNNING OPERATIONAL REVIEWS (RORs) designed to make the
use of resources in major government activities more
transparent, efficient and effective. RORs will serve as
additional tools to enhance transparency and accountability in
the use of resources. It will allow for operational, logistical
and financial reviews and assessments for major activities as
they are being implemented so that lessons learned can be fed
back "just in time" to improve the operations of that particular
activity. Lessons learned can also be fed back to other similar
activities thereby enhancing their effectiveness. To make our
oil and gas sector more transparent, I have enrolled our country
in the international Extractive Industries Transparency
Initiative (EITI). We shall join other countries in publishing
transparently and on a regular basis what we produce and what
revenues we make from this important sector. In addition to
audits of our NNPC accounts, independent auditors will review
other oil company accounts and make findings public. The
Ministry of Finance has set up an oil and gas accounts unit to
support these efforts and to better understand the financials
and the economics of this important sector. All stakeholders
-domestic and multinational oil companies, civil society, and
others have agreed that this is a good way to move forward. We
will support and strengthen the Economic and Financial Crimes
Commission (EFCC) to apprehend and bring to book all those who
are intent on subverting our economic system and damaging our
reputation. The EFCC is doing its best in combating advance fee
fraud (419) and other related crimes and it will concentrate on
rooting out and ensuring the punishment of our economic
criminals. We also continue to strengthen and support the
Independent Corrupt Practices and Other Related Acts Commission
(ICPC). The work of ICPC has started to gather steam. We intend
to support our police to provide increased security, and enhance
their investigative and prosecutorial capacity. We have doubled
the size of our police force in the last three years from
120,000 to 240,000, and we shall provide the police with the
tools to do an effective job. Our armed forces have also been
called upon from time to time to help buttress the work
of the police in hot spots and to serve outside the country .We
are proud of them and the sacrifices they make and we thank them
for it. We plan to reform our legal system and strengthen our
Judiciary modern tools of work.
c)
Public Sector Reform: Reform of Public Expenditures,
reduction of waste in government and improvement of public
revenues is a key aspect of the reform programme and of this
2004 budget. Fiscal indiscipline has been a problem and we have
run substantial budget deficits averaging 4.7% of GDP in the
past five years. The public sector absorbs too large a
proportion of Federal Government revenues. This must
change. Compared to last year, we have cut down on salaries and
overheads by 23%. The implementation of the monetization
initiative which gets government out of the business of
providing fringe benefits such as housing, utilities, transport,
in kind, and gets the benefit to beneficiary civil servants in
cash will help in reducing waste. Civil service reforms aimed at
re-professionalization, ensuring merit and raising morale is
also an important aspect of the reforms. We are coming down hard
on the phenomenon of ghost workers. For instance, a recent human
resource audit at the Ministry of Federal Capital Territory has
so far revealed about 3000 ghost workers and hundreds of
illegally-employed persons all costing the Ministry about 63
million naira a month. Such audits are already under way in a
few pilot Ministries and will be undertaken throughout the rest
of the Civil Service and the parastatals. Other aspects of the
public expenditure agenda -are pensions reforms. The present
PAYG pensions system has become unsustainable, and government
has built up sizeable arrears which have yet to be fully
quantified. The reforms involve a move away to a new
contributory pensions system that will also provide a source of
long term investible resources in an economy where this is
sorely lacking. May I at this juncture thank you for the
expeditious way you are working on the Pension Bill. Public
expenditure reforms will also focus on quantifying and clearing
contractor arrears and completing uncompleted projects.
d) On the revenue side, the reforms focus on a
simplification of the multiple taxes and levies that companies
face and a possible lowering of the company and personal income
tax rates. We are building on the Prof.Dotun Phillips-led reform
study, commissioned by the former Minister of Finance, Mallam
Adamu Ciroma. We also propose to strengthen the Customs Service.
We shall build on ongoing reforms and push these further as a
means for increasing Customs Revenues. In this regard,
independent collection of taxes and revenues will be looked at
as an additional instrument to enable government maximize its
receipts. On the issue of tariffs, waivers, duties and
concessions, we intend to bruibng as you are aware, Nigeria is
committed to bring coherence and structure to our policy. As you
are aware, Nigeria has committed to common external tariff
regime with other ECOWAS countries. Accordingly, government is
working towards tariff harmonisation in ECOWAS in the nearest
possible future.However, we are mindful of the need to protect
some of our local industries from dumping and unfair competition
and we propose to do this within the remedies allowed us in the
context of the WTO and regional frameworks. We propose to hold
stakeholder consultations on these issues with the private
sector and interested civil society before coming to closure. We
propose to move ahead with destination inspection in 2004. A
cabinet level implementation committee, under the chairmanship
of the Ministry of Transport, has been set up to help work out
the technology, risk management issues, and all other issues
connected with destination inspection. Since January 1, 2004 is
not longer realistic, a new start date will be announced later.
e) Governance and Institutional Reforms: We have received
Report on reforms of the Local Governments to make them more
effective and efficient deliverers of services to the people
given their proximity to the ordinary people. We are also
reforming our tertiary institutions. Universities now have
autonomy to choose their leaders and managers and to raise
additional resources through various means including charging
more fees for non-academic services like bedspace.
The high
level of support given to education in this budget will result
in higher subventions from the capital budget to enable
completion of projects, upgrade of facilities, repair and
rehabilitation. This will complement universities efforts at
generating incremental operating resources.
Ladies and
Gentlemen, these reforms are captured and further detailed as
specific measures for implementation, with specific timelines
and accountabilities for delivery .The detailed matrices of
measures have been shared with many of our people and will be
posted on the Ministry of Finance website for easy reference.Let
me remind you that the reforms form the core of the government's
National Economic Empowerment and Development Strategy- NEEDs.
NEEDS, which will be formally launched next month, is the
country's wealth creation and poverty reduction strategy and
will guide our economic reform work in the next four years.
Coming
back to the reforms, that implementation will be undertaken
within the context of a stable macro-economic framework that
looks to low levels of inflation of no more than 9% and with
rate of interest on bank lending based on an average 12%
discount rate on Central Bank treasuries, and stable market
determined exchange rates. Macro-economic stability will be
driven by a tight fiscal policy that envisages a fiscal deficit
of no more than 2% of GDP, financed largely through borrowings
on the domestic capital market, and savings envisaged from
reductions in wasteful government expenditures. A tighter fiscal
policy will require cooperation from all tiers of government. To
this end, we are working with the State Governments on a Fiscal
Responsibility Bill that will tie all three tiers to more
prudent fiscal behaviour including the application of an "oil
price-based fiscal rule". This will enable savings to be made
from the so-called excess crude proceeds which can then only be
accessed through carefully defined triggers. Some of these
reforms will require enabling legislation. In fact, some of the
legislations are already before you, for example, the
Electricity draft Bill. Others will be coming, such as the
Fiscal Responsibility draft Bill, the Procurement Commission
draft Bill, draft Private and Public Partnership in
Infrastructure Provision, and amendments to our tax legislation.
I look forward to a speedy passage for these bills to facilitate
speedy implementation of the reform programme.
IMPLEMENTATION OF THE 2003 BUDGET
Before
moving to the specifics of the 2004 budget, let me touch on the
highlights of implementation of the 2003 budget. In 2003, the
National Assembly enacted an appropriation of N1 ,175 billion.
On 10th December 2003, a further appropriation of N271 billion
was approved as supplementary budget for a total spending of N
1,446 billion. This was against a forecast revenue of N950
billion.
Implementation of the 2003 budget had some successes that will
provide a good foundation to build on for the 2004 budget. These
are notably in agriculture and telecommunications. The
agriculture sector grew at an estimated 7% per annum fuelled by
good rains and supportive government policies. It is therefore
not surprising that FAO has confirmed that the number of people
under- nourished in Nigeria has reduced from about 25% to under
8%. All these in turn engendered what we estimate will be a 5%
GDP growth rate for the year. This performance is slightly
better than last year's,GDP growth of 4.0% but lower than the 7%
that we are aiming at. The telecommunications sector also grew
with addition of millions of lines by many operators as noted
earlier. Macro- economic stability was maintained during most of
the year although there were important periods of instability
caused largely by an uneven pattern of spending and weak fiscal
and monetary policy responses. Inflation averaged 12% year on
year.
Some of the problems with implementation of the 2003 budget had
to do with the slow and limited releases of the capital budget
which was implemented at only 50%. Much of government spending
was on recurrent although substantial capital expenditures were
also erroneously embedded in the recurrent budget as was the
case with COJA. The budgeting process in 2003 also did not work
very well as large amounts of expected expenditure e.g. for
domestic debt service, were not included in the budget and had
to be provided for in a supplementary .Due to the limited
release of capital budget, contractor arrears continued to pile
up. The pace and pattern of expenditures left much to be
desired. These problems will be dealt with in budget 2004 as a
comprehensive approach has been taken to the budget. Better
budget monitoring will also be in place.
THE 2004 BUDGET
Before delving into the details of the 2004 budget, let me say
WHAT IS DIFFERENT ABOUT THIS BUDGET .
a) The
2004 budget is realistic: It imposes fiscal discipline through a
real narrowing of the fiscal deficit to no more than 2% of GDP.
This deficit is much more easily financed through borrowings
from the domestic bond market, savings from curtailing
government expenditures and inflows from looted funds;
b) Budget formulation has been different: The Federal Executive
Council and the National Assembly have been engaged all along in
the budget formulation process. A fiscal strategy paper was
prepared laying out the government's priorities, proposed
expenditure and revenue envelopes and borrowing plans.This
enabled upfront discussions of priorities and trade-offs and
assisted with better buy-in for major stakeholders;
c) The
budget underpins reforms so there is an explicit objective to
better control payroll and overheads and curtail wasteful
expenditure. Hard budget constraints have been set for many
parastatals that cut their subventions by up to 25%. The
groundwork has been laid for a medium-term expenditure
framework.
d)
Expenditure ceilings have been set on the capital budget for
major expenditure heads, Ministries and agencies and all
spending entities will be expected to manage their budgets
within these ceilings;
e) There
is a focus on completing uncompleted projects and clearing
contractor arrears for both local and foreign contractors. To
that end, spending Ministries are expected to give priority to
these issues in their budgets and the Ministry of Finance will
be working closely with Ministries on their spending plans to
ensure that this takes place. Ministries are also expected to
provide for counterpart funding for donor- financed projects
from their budgets. This should also be given top priority;
.
f) Budget implementation will be underpinned by better
monitoring and better cash management. To this end, the Minister
of Finance has formed a Cash Management Committee comprised of
herself as chair, Central Bank, AGF,DG Budget, NNPC, and Federal
Inland Revenue. The Committee will meet monthly to reconcile
figures and to better match spending to revenue inflows.
Computerized systems and processes will be put in place to aid
this process.
g) Major
spending Ministries have been asked for monitorable performance
indicators (however rudimentary) against which they can be
measured in terms of results, outputs, and outcomes in light of
resources they are allocated;
h)
Finally, the budget will be implemented in a clear and
transparent manner. The budget document will be made available
to the public through websites and publication. The reform
matrices will also be available, as will the performance
indicators of major spending agencies;
THE
2004 BUDGET
Key
Parameters: The 2004 budget is based on the following
assumptions:
a) Crude oil production of 2.24 million barrels a day (including
150,000 barrels of condensate)
b) Average crude oil price of US$23 per barrel.
c) Joint
venture cash call of $3.2 billion .
d)
Inflation rate of no more than 9% per annum
Based on
these parameters, we estimate federally-collectible revenue for
the year ending 31 st December 2004 will be N2,160 billion made
up of N 1445 billion of oil revenues, and non-oil taxes of 615
billion, and independent revenue of N 100 billion. Federal
government's holding remains 56% and its expendable share will
remain at 48.5% of revenues although States will get an
additional 2% of revenues as grant. This 2% increase will be
made possible through a reduction in the Federal allocation from
Ecological and from Stabilisation of 0.8% and Solid Minerals
Development funds of 1.32%. This is in addition to earlier grant
of 0.60% to Local Governments and 0.72% to States. This
arrangement will remain in place for 2004, pending the enactment
of a new revenue allocation formula. We shall be pushing
aggressively to raise revenues through better tax compliance and
collection including better collection of customs revenues.
However, given the proposed reforms on the tax and customs side,
the impact on revenue collection will largely be felt in 2005.
Special levy of N 1.50 per litre of PMS and AGO for road
maintenance will come into effect in 2004. This will lead to
removal of tolls on all public roads.
Federally-retained revenue is, therefore, estimated at N 1,022
billion ( excluding N37 billion of grants to the states) made up
of the Federal Government's share of the federation account of
N898 billion, share of the VAT account of N24 billion, and
independent revenue of N100 billion. Last month, the Federal
Executive Council approved an aggregate expenditure ceiling of N
1,200 billion for the Federal Government. An aggregate
expenditure ceiling of N 1,189 billion ( excluding N37 billion
of transfer to the States) is presently being proposed. This
results in a deficit of N166 billion or 1.8% of GDP to be
financed largely through the domestic capital markets and other
sources. Of this spending, payroll and overheads . amount to
N459 billion or 39% of total spending. This figure includes the
cost of monetising the Civil Service and the government's (
employers') contribution to the proposed Contributory Pension
Scheme. Monetisation will be extended to the rest of the Public
Service in 2005. The Civil Service, military , police and
para-military represent 60% of the payroll of government while
educational institutions, hospitals and parastatals represent
the remaining 40%.
Parastatals are quasi-government entities that should not be
wholly dependent on government. They are usually supported
through subventions which means that they must generate income
to partly cover their costs. During 2004, Government will be
reviewing the functions and efficiency and delivery of all
parastatals with a view to weeding out duplication and overlaps
and inducing greater efficiency in the use of resources. In
budget 2004, selected parastatals have been put on a hard budget
constraint so that they can sharpen their revenue focus.
Beginning with the 2004 review, parastatals will have to be more
accountable in rendering results and timely reports on the
impact of their activities.
DEBT
SERVICE
Nigeria's external obligations now stand at US$ 30.9 billion
with an expected debt service to the Paris Club the biggest
creditor, after rescheduling agreements of $2.1 billion.
However, payment of such a large amount would mean that little
or no capital expenditure for health, education and
infrastructure, could be financed and hence, growth would be
jeopardized. To mitigate this position, Nigeria has negotiated
with the Paris club continued payment of $1 billion for 2004, in
continuation of the arrangements that obtained in 2003. Nigeria
intends to fully meet these obligations, along with obligations
of about US$433 million for debt service to the multilateral
institutions, and $273 million to service both London club debts
and promissory notes and other sundry creditors. Domestic debts
have also been mounting to the tune of N 1.3 trillion naira and
a projected debt service of N 195 billion . Nigeria's debt
overhang is serious and unsustainable. It constitutes a
deterrent to private sector investment and to growth and
development. We will carefully manage our domestic debts from
now on, under the reform programme. As we continue to creditably
perform on the reforms, we know we need to set a track record
before approaching our external creditors to request
consideration for debt reduction and debt relief. We intend to
focus on implementation of the reform programme in the near term
but also intend to approach our creditors for debt relief at the
appropriate time. For budget 2004, we have set aside N379
billion for debt service. N 184 billion will go for external
debt service, while the balance will be for servicing domestic
debts.
TRANSFERS
Statutory transfers amount to N50 billion for the Niger Delta
Development Commission and the National Judicial Council.. In
addition to this, the sum of N37 billion will be transferred to
States as grants.
THE
CAPITAL BUDGET
The
capital budget of N300 billion is smaller than what was
allocated under the 2003 Appropriation Bill. However, since only
N89 billion as at 30th September, 2003 of capital was released
in 2003, we intend to attain a minimum of 80% implementation of
this capital budget and will work closely with the spending
Ministries and the National Assembly to ensure this happens.
Constituency projects have been factored into this capital
budget, thanks to good advance work between the National
Assembly and the Ministry of Finance budget team. The allocation
of the capital budget clearly demonstrates government's
priorities. Over 75% of the budget will go to support education,
health, roads, water .
supply, electricity, agriculture, and security including all
types of policing, defence, and fighting economic crimes. The
allocations to health and education are the largest and result
in a doubling for education and a 28% increase for health.
With
regard to Agriculture, the strategy will be to channel the
capital budget towards support for research, extension, and
innovations in cultivation practices and agro-processing.
Attention will focus in' particular on the presidential
agricultural initiatives for cassava, rice, maize and other
grains, vegetable oil, cotton; oil palm and other tree crops,
livestock and aquaculture. Support will continue to be given for
purchases of grains and other commodities for strategic reserves
to intervene to ensure reasonable price to farmers as we did in
2003. A revolving fund is already in place to help support bulk
fertilizer procurement. The 25% Federal Government support on
fertilizer will continue in 2004 with a review to ensuring that
fertilizer is getting to farmers that need it at reasonable
price and that the revolving fund is being adequately
replenished through recoveries. The agriculture sector has
performed well in the last couple of years and ensured adequate
food for the majority of Nigerians. The country , however ,
still imports many commodities such as rice that it can now
competitively produce because of the existence of high yielding
West African varieties. Nigeria has also lost market share in
almost all agricultural commodities it used to export. The
objective will be to recover lost ground in these areas through
appropriate policies and support to farmers for increased
production.
With
regard to Small and Medium Enterprises (SMEs), the government,
through SMEDAN and NIPC, is working closely with international
and national organizations to provide business training and
access to micro credit for entrepreneurs. A new $32 million SME
project, supported by the IFC and the World Bank, is at the
point of implementation with the development of a new micro
credit institution, Accion International. Other donors are also
assisting in this area. The Central Bank is also involved
through the mobilization of the SME equity fund from commercial
banks.
SMEs
provide an important growth and job creation opportunity for the
economy and will be strongly supported under the reform agenda
through enabling policies, and institutional reforms.
The
government also intends to intensify support for the solid
minerals sector through completion of the mapping exercise to
expose where these minerals are in exploitable quantities so as
to encourage the private sector to invest. Small scale mining
will be encouraged and the development of value added activities
linked to solid mineral exploitation is of great interest. We
also intend to encourage the private sector to focus on tourism
development , primarily for internal tourism but increasingly
also for external tourists, linked to our strong cultural and
artistic heritage.
Nigerians
must be encouraged to become tourists in their own beautiful
country and then to attract others to visit. A focus will be put
on further developing the budding home video production industry
for expanded exports to Africans on the continent and in the
Diaspora. This area of services is a good employer particularly
of young graduates, and we will take the cue from other
countries such as India with low cost skilled labour who see
this industry as a growth opportunity. We also intend to
encourage the development of information technology especially
software development where some of our young people and our
professionals are already' making their mark nationally and
internationally. The role of government in these areas will be
to provide the infrastructure, and the enabling policies and
incentives to the private sector to make things happen.
On infrastructure, it is clear that public resources will not be
sufficient for the large investments required in the area of
roads, and other mode of transport, water supply and power.
Whilst significant amounts have been allocated for public
investments in these important areas, the government intends to
encourage public-private partnerships, BOT, BOOT, ROT and other
similar arrangements for involving the private sector. A bill is
under preparation and will soon come to the National Assembly so
that the appropriate legal framework and regulatory oversight
for such arrangements can be put in place. In the area of
infrastructure,particular attention will be paid to setting
targets for the provision of services so as to encourage
discipline and efficiency in the use of scarce government
resources. Another area for public-private partnerships is in
housing. While the government does not intend to directly invest
heavily in housing, we consider that this is an important growth
area for the private sector that we shall strongly support
particularly in terms of infrastructure. We intend to support
the development of a private mortgage market capable of making
long term funds available to the average Nigerian at reasonable
and affordable interest rates. The government intends to sell
off much of the real estate (homes, office buildings) that it
presently owns all over the country but particularly in Lagos
and Abuja which government does not need. These properties will
become available for disposal as we carry out the monetization
policy. It is expected that guidelines for sales will soon be
developed and advertised in an open transparent manner so that
these important assets can be realized for the government
treasury whilst helping to deepen the country's mortgage and
housing market.
The
government will continue to attach considerable importance to
investments in the oil and gas sectors although NNPC and NGC
may increasingly have to source their investments requirements
on the capital markets. While a significant amount of money has
been invested in gas exploration, it has yet to bring money to
the coffer of the government. However, this will change from
2005 when estimated revenues from gas could average in the
neighbourhood of one billion dollar. Oil will continue to be the
major source of government revenues in the near term.
Finally,
on social infrastructure, the 2004 budget has seen a doubling in
the capital allocations to education and health. This is
unprecedented and is intended to send sharp signals that these
two sectors are fundamental to future growth, wealth creation,
poverty reduction enhanced living standard and attainment of the
Millennium Development Goals (MDGs). These investments will
enable us to focus on rehabilitating our teaching hospitals,
schools and tertiary institutions. The private sector has also
been invited to invest in these two sectors or to partner with
government to provide infrastructure or services. Permission has
been granted to some eight private universities to open and more
are coming. We must develop tertiary institutions of high
quality where top of the line services can be provided and the
country's future leadership can receive adequate training.
Finally, our reform agenda and this draft budget are predicated
on partnership -partnership between the Federal Government and
r the"State and Local Governments, partnership between public
and Nigeria and the international community. The States have
resolved to give priority to agriculture, SME, social and
physical Infrastructure and public finance reform.
Mr. Senate President, Honourable Members of the National
Assembly, these are the highlights of budget 2004. I thank you
for
your cooperation in getting the budget to this point and for
your patience in listening. I can only request that you kindly
give this appropriation bill your deepest attention and
accelerated treatment so that it can be approved in a timely
manner .
THANK YOU AND GOD BLESS |