President Muhammadu Buhari has sent the 2019-2021 Medium Term Expenditure Framework and the Fiscal Strategy Paper (MTEF) to both chambers of the National Assembly.
The MTEF which is a document that shows the fiscal plan of the government contains the assumptions on which the budget is built. It is subject to the approval of the two chambers of the national assembly.
The President in separate letters to the Senate and House of Representatives urged the Lawmakers to “expeditiously consider it in order to bring the 2019 FGN Budget preparation process to a close”.
The letter reads in part, “Pursuant to provision of the Fiscal Responsibility Act, 2007, the preparation toward submission of the 2019 Budget to the National Assembly is progressing well.
“The MTEF and FSP were prepared against the backdrop of a general uncertain global economic environment; as well as fiscal challenges in the domestic economy to ensure that planned spending is set at the prudent and sustainable levels and is consistent with the government’s overall developmental objectives and inclusive growths.”
The oil production projection for 2018 is retained for 2019 at 2.3 mbpd with an upward projection of 2.4 mbpd for 2020 and 2.62 mbpd for 2021.
Other assumptions are the oil price benchmark at $60 per barrel for 2019 from the $51 per barrel for 2018 while the interest rate remains the same at N305 to $1 and inflation projected to be 9.98%.
The budget is estimated at N8.73, a reduction from the 2018 budget of N9.1trllion which represents a 4% reduction (N393.23billion).
Debt servicing is going to gulp N2.14 trillion and N220 billion for sinking funds to retire mature bonds while the capital component of the budget stands at N2.24trillion.