President Muhammadu Buhari has given ministers a marching order to create 100 million jobs in the next ten years.
The Minister of Finance, Budget and National Planning, Hajia Zainab Ahmed made this known on Tuesday during a Public Consultative Forum on the draft 2020-2022 Medium Term Expenditure Framework/Fiscal Strategy Paper (FSP) in Abuja.
Ahmed also disclosed that beginning from the September Federal Accounts Allocation Committee (FAAC) the N614 billion disbursed to states as bailout funds will be deducted from their respective accounts.
According to the minister, the 100 million jobs will address the heavy burden of unemployment ravaging the country’s youth and put the country on the part of sustainable growth.
On how the government intends to achieve this humongous target, the minister set that every minister has been directed to factor in, how projects they present during executive council meeting for consideration will create jobs.
She said that priority will be given to creation of jobs for any project to get the approval of the federal government.
“So the directive is implemented by ensuring that the focus for every ministry, department and agencies (MDA) is that in every expenditure that we carry through, we must be looking at the number of jobs we can create,” she explained
The minister added that there would also be new initiatives and incentives to businesses, especially Micro Small and Medium Enterprises (MSMEs) as they were major sources of job creation.
The minister speaking on the deduction of the bailout funds given to states for payment of salaries of workers in 2016, said that the deduction would commence in the Federation Accounts Allocation Committee (FAAC) provision for states in September.
She said that the funds would be deducted from source and remitted to the Central Bank of Nigeria (CBN), adding that the refund would not form part of the revenue for funding the budget.
“It was a loan which was advanced by the CBN and the repayment will be made to the same CBN.
“So the recovery process for us is to deduct from the FAAC allocation to the states and remit same to the CBN.
“We are going to start these remittances by the next FAAC. So there will be no requirement for us to consider the Fiscal Sustainability Plan (FSP) implementation.
“We want the states to stay on the path of fiscal sustainability, but it will not be a condition for the deduction. We will deduct direct from source and remit to the CBN,” the minister said.
The Federal Government gave out the loans to 35 states as conditional budget support provided by the CBN to help them pay salaries, gratuities and pensions.
Such loans were provided by the CBN at nine percent, with a grace period of two years, while the federal ministry of finance helped in the disbursements, with documented approval by the Presidency. Only Lagos state did not access the loan.
Ahmed also spoke on the issue of waivers and incentives to businesses, stressing that it was agreed from the finance side that there were actually too many of them and that it was costing the government a lot.
“We also agree that there has to be a review of the pioneer status certificate issuance process because the waivers and the incentives are costing us a lot.
“However, when decisions have been made and approvals have been given and businesses make their decisions based on those incentives, you cannot pull them out overnight.
“So there has to be a period within which the commitments that have been made are allowed to exit before you post new conditions, but we are currently reviewing the quantum of the waivers,” Ahmed said.
The minister noted that the projected budget for 2020 was N9.78 trillion, N10.110 trillion for 2021 and N10.418 trillion for 2022, with revenue for 2020 projected to be N7.63 trillion.
According to her, privatisation proceeds is expected to rake in N126.5 billion in 2020, while multi-lateral/bilateral project-tied loans are to bring in N328.1 billion.
On the expenditure side, while capital expenditure would gulp N1.764 trillion, 21 percent lower than the N2.962 trillion (32 percent) budgeted in 2019, N4.749 trillion was projected for recurrent expenditure in 2020.
The minister said that the recurrent expenditure was occasioned by rise in personnel cost and marginal increase in overhead due to creation of more ministries.
“Debt service is projected to gulp N2.452 trillion, sinking fund N296 billion and statutory transfers N526.45 billion in 2020,” she said.
Ahmed added that personnel costs, inclusive of pension costs, had continued to rise, as it was set at over N3 trillion, adding that the Federal Government was taking steps to contain it.
She said that one of the steps taken was a directive by President Muhammadu Buhari that all MDAs must implement the Integrated Personnel and Payroll Information System (IPPIS) by October, failure of which salaries would not be paid to them.
New borrowings are expected to gulp N1.7 trillion to be shared equally between domestic and foreign creditors.
Meanwhile, total fiscal deficit was put at N2.14 trillion for 2020.
The minister said that the key assumptions in making the projections is that oil production volume on the average was expected to be 2.18 million barrels per day (mbpd), lower than the 2.3 mbpd projected in 2019.
“Actual daily crude oil production and exports have been well below budgetary projections since 2013, despite the installed capacity of up to 2.5 mbpd, for a number of reasons.
“For 2018, actual production was 1.84 mbpd and for the first half of 2019, it was 1.86 mbpd,” she said.
Ahmed added said that considering the expected oil glut in 2020 and the need to plan against unexpected oil price shock, a lower benchmark oil price of 55 dollars per barrel was set against the 60 dollars per barrel projected in 2019.
On Gross Domestic Product (GDP) growth rate, she said that 2.93 percent was projected for 2020, 3.35 percent for 2021 and 3.85 percent for 2022.