Transcript Of The Speech Of Dr. Ngozi Okonjo-Iweala At The Budget 2014 Presentation

A TRANSCRIPT OF THE SPEECH OF DR. NGOZI OKONJO-IWEALA AT THE BUDGET 2014 PRESENTATION HELD AT TRANSCORP HILTON, ABUJA
ON MONDAY, JANUARY 20, 2014

Good morning and thank you very much ladies and gentlemen.


Honourable Ministers, my colleagues from the ministries of Works, Power and Women Affairs; Honourable Chair of the House Committee on Appropriations; the Deputy Chair of the House Committee on Appropriations; senior government officials; Special Adviser to the President on Performance Monitoring; Permanent Secretaries; Distinguished DGs and heads of organisations.

I am happy to see the Auditor General; he is joining us here today as well as the Accountant General; and we have so many heads of parastatals and other government agencies.

The Customs, thank you for coming also and joining us.

Donor partners, thank you. Distinguished ladies and gentlemen from civil societies and the private sector, as well as ladies and gentlemen of the press. It is really my honour to welcome you all to the public presentation of 2014 Federal Government budget proposal.

Today, the speech I’m going to give – I have to crave your indulgence – is going to be a little bit longer than usual because of what was described by the Country Director of the World Bank and all of us and the Honourable Chair of the House Committee: I laid the budget, we did not have the usual budget speech of Mr. President, so I want to take the time to lay out some of the key parameters of this budget. So I just want to alert you ahead of time that it will be a little bit more detailed or longer than usual.

I want to start by expressing my profound appreciation to His Excellency, President Dr Goodluck Ebele Jonathan and Vice President Namadi Sambo under whose guidance the 2014 budget was prepared. I also thank the leadership of the National Assembly, the Chairs of the Finance and Appropriations committees of the Senate and the House. And I particularly want to thank the Honourable Chair of the Appropriations Committee and his deputy for spending time with us here today; also the other Honourable Ministers who are here present.

I thank my cabinet colleagues for their support, their understanding; and my three colleague ministers who are here today whose work is very important to the achievement of the objectives of the Budget 2014 and even the implementation of 2013 budget – the Honourable Ministers of Power, Works and Women Affairs. We have to work under a very tight timetable and constricted budget; yet they did the best they could to deliver with their teams. Thank you.

I acknowledge the efforts of all other relevant stakeholders and especially the staff of the budget office of the federation for their hard work in preparing this budget. Please give them a round of applause. It goes without saying that due to some of the constraints along the way, during this budget preparation there were many sleepless nights and 24 hours working in order to get the budget delivered. I render my sincere thanks to them all.

Now before I discuss the contents of the budget, please permit me to take a few minutes to make some introductory comments which I think will provide the context for the rest of the budget speech today. Before I do that, I also want to point to you that you will be given – if you haven’t got them already – several important documents. First is Understanding Budget 2014, the next is The Citizen’s Guide to the Budget, so it makes the budget simple; and we’ll also be distributing, due to popular demand, answers to the 50 questions. We got many messages saying that people would like us to distribute it at this forum; so we’ll try. We may not have enough copies because we were not really preparing to do that. So we’ve only got a few but we’ll do the best we can.

Now, the first thing I want to address is, What is the budget all about? We’ve heard many comments about the budget. We’ve called it a budget for inclusive growth and job creation. And people have pointed: “How can they say they are creating jobs when only “x” amount has been allocated to this sector and it’s not enough?” I want to state that the budget is not simply a set of revenue and expenditure plans by government. Rather, the budget is a statement about government’s fiscal policies and related policies which are intended to move the economy forward. The budget is not only about the resources being allocated to various sectors, but also about new fiscal policies which will stimulate growth across various parts of the economy.

For example, in previous budgets we’ve announced measures such as backward integration policies to support various Agriculture Value Chains such as rice and sugar; and to support Industrial Value Chains such as cement, to support the development of the Solid Mineral Sector and so on. So when you look you often find that the impact of these policies may give resources – and I will illustrate this as we go along with this speech – they make resources available to the sector that are ten times the amount that is seen within the budget.

The government uses the budget process as an occasion to launch policies that can leverage significant resources outside of the budget to help grow the economy, create jobs, and put supportive policies in place that are to the benefit of Nigerians. I wanted to really mention that point. In this regard, I want to add that a whole set of industrial incentive policies which in Nigeria are typically called waivers and exemptions are a deliberate act of government policy. And these are the policies that have underpinned the expansion that I spoke about in the cement, the sugar and other industries; and enabled the creation of jobs.

These policies can amount to significant amounts of money in billions of naira but they are what enable our manufacturing industries in particular to be competitive; to be able to expand in an era where they may face constraints on their competition and production and thereby to create jobs. So job creation is linked very much to these policies of government. And I want to say that people need to understand this because at some stages, you know, these policies are not well understood, and some people think these are policies that lead to fraud.

I want to state in the case of waivers and exemption, there has been a debate going on, and to elucidate that in the past these policies were not applied properly in the way they should. Now, they have been restructured and revamped so that from 2012 on, they are on a sectoral basis. Anybody operating within the sector has access to the same incentives and the same level playing field that everyone else has. But we need to understand these policies as incentives to help our manufacturing grow.

The second point I want to point out is the level of transparency and detail of the Nigerian Federal Government budget. In all my years working across developing countries – and I’m glad the international institutions are here – African Development Bank, the World Bank and the IMF are here – I’ve not seen budgets as comprehensive and detailed that go down to how much is spent buying plates, forks and knives, catering for food. It doesn’t exist. And I’m proud that in this country, we do not have a problem with laying out the details of the budget so that Nigerians can look. We just heard some comments by the civil society about a detail in the budget – I think the DG budget will correct that particular impression because there were some errors that arose in the GIFMIS which we implemented this year that led to those. But apart from that, what I’m proud about is that we have a level of detail in this budget that allows Nigerians to see down to the last naira, what it is being spent on.

I think it is a big advantage. I thank our civil society colleague for recognising this transparency. It is designed to engage the public in the debate to show them exactly where the money is going. So we should see this as a big advantage of this country’s budget which you do not see in other countries. When you travel elsewhere and you look at their budget, if it is available, it is usually much more aggregated than what you see in the Nigerian budget where budget is three volumes, because we’ve gone to the last detail to share with Nigerians what it is so that they can put their voices forward to the MDAs (to the Ministries, Departments and Agencies), the Ministry of Finance and say, “This is what we think and this is what we think.” And we are very happy that this budget has enabled that engagement in that kind of conversation.

My third comment concerns our budget process. In preparing the budget each year, we make every effort to be consultative by inviting stakeholders and consulting them and talking to them about the process. But of course increasingly as time goes along, I have found that the budget process is also becoming difficult and more challenging for the executive and the legislature to agree on key parameters. I want to thank the National Assembly, because I think this year we engaged very deeply more than we did before with the various committees to try to come to an understanding. But it ended up taking some more time. And one of the reasons we took more time was the issue of the benchmark oil price for the budget. And incidentally we’ve also answered extensively on this issue in the fifty questions.

I think in the future we need to consider moving to a system where we have an objective and depoliticised process for some of the parameters that we need to consider in order to move the budget process along expeditiously. For example, we can consider what some other countries that have gone through this exercise are doing. Chile has copper as their main product and what they have is an independent panel of experts that are independent of both the executive and the legislature and they set up a methodology that is agreed. Whatever they bring in terms of the copper price is the benchmark price that is used for preparing the budget; but it is done independently and removes the rancour out of that process. In Ghana and Mexico, Ghana actually studied what was happening here in Nigeria and devised their own system that has a predetermined formula for setting the benchmark underpinned by law so that there is no argument by either the executive or the legislature; it just happens and it’s automatic in the way that it is done.

So I really would like also to appeal to the legislature, particularly, the Honourable Chair and Deputy Chair here that we look at this and see if together we can come up with an objective and independent process that can determine some of the benchmarks that we need for our budget and take it away from the realm of argument so that we can move this forward. If other countries have done it, Nigeria is certainly capable of doing it. I believe that if we can come to this, the slippages in our timetables and the other issues that occur along the way will be reduced and we will be able to produce and pass and move to implementation of the budget in a much more expeditious manner.

The fourth point I want to make highlights the concerns on the structure of our budget. Distinguished guests, ladies and gentlemen, the high share of recurrent expenditures in the budget is of great concern to us as it reduces the size of funds available for investments in capital projects. We all know that and I want to state categorically that this has been our view since the first day that we came into this job and has been the view of the budget office that Nigeria needs to move to a different structure of its budget. To this end, we worked hard to reduce the ratio of what we had in the recurrent to capital from what we found in 2011 which was 74% when I started work to 71.5% in 2012 further to 67.5% in 2013 but we are back to 74% in 2014. And why is this? We are here because we have not yet been able to make the choices needed to change the structure of the budget.

You will see that in the presentations that will come up and maybe later on in the day, the reason why we have a very high ratio of recurrent now after a very good effort – when I was minister first time, we tried to take the ratio down to about 65%. It came up again, then went down; but the present situation we are in today occurred from the award to salaries that were given in 2010. This jerked up the recurrent budget considerably – and I have more to say about it – the personnel bill, I believe, went to almost double its size and that changed considerably the structure of the budget. As we speak, the pension benefits – the arrears of pensions attendant on this; we’ve only begun to factor in the pension implication. For the military, we did it in 2013. For the civilians, we’re factoring it into this budget and it’s adding another 27 billion naira and we still have the arrears to consider.

So, Nigerians need to see. As long as we continue to have these continuous awards – and we are very much for equal pay for work, so this is not to say that people should not be paid well but we need to recognise the implication of what that means. When these awards are made, it jerks up the recurrent budget. So it is not as if the government is sitting, not trying to work on this but we’ve got other forces that lead to continuous increase in the recurrent budget; and this is what we have been pointing out. So all those who find this discomfiting, they need to know the reason why we’ve got these ratios and they need to understand that as long as we continue to increase these bills, have more awards and integrate the arrears, the recurrent budget will continue to increase; and that’s just the structure, the structure is not a mystery. If you look at the graphs, you will see that. So we need to make some tough choices.

The tough choices involve also trying to slim down in places where there may be waste in the recurrent budget. So it’s not just on the wages and salaries; we must also work in other areas where there is waste – where there are duplicative agencies and work by agencies, we must also in fairness try to take those away, slim those down. And these are some of the things that we are looking at.

To strike that balance that we need in this country between recurrent and capital, some tough choices are needed. When we started with Mr President looking at the Oronsaye report which gave a list of agencies with duplicative functions or committees which we could just either streamline or merge, we found that most of these agencies are underpinned by law. So at the end of the day, we could not get up and say we merge this or we do away with it because we have a law underpinning it. So through this, I’m also strongly appealing to the legislature and the National Assembly that we will need their help with the review and repeal of some of these laws if we are to achieve the objective of curbing waste, streamlining government expenditure and getting a balance.

I want to be very clear – all I want to say to you is that we are all in this together. This is not a question of the executives sitting and saying we are going to spend money in the recurrent. People need to recognise and realise that each time personnel cost goes up because of further increases, the recurrent cost goes up. Each time we are not able to streamline our agencies because of – maybe legal issues – that’s an impediment. So we really need to work on all of this – the legislature, the executive, the Nigerian public, civil society – we need to come together to solve this problem; and we are very willing to do it because we think the structure now needs to be changed.

My fifth and final comment is on the subject of budget revenues. Let me be upfront in stating that the role of the federal Ministry of Finance is to ensure that the maximum amount of revenue flows into our national coffers. Our role is not just to look at expenditures and how to curtail it but is also to increase the revenues and look particularly at non-oil sources since we are trying to diversify this economy. But I’d like to take this opportunity to clarify some issues. One is on the oil revenues and is based on the debate that is on-going now.

Following initial reports by the Central Bank, there have been discussions in the country and the media about monies not remitted by the NNPC to government coffers. After our initial reconciliation, we now have an amount that is agreed, an amount that everybody is talking about and has brought everybody round the table – the $10.8billion which still needs to be accounted for. I just want to remind everybody listening that this revised $10.8 billion outstanding is the amount put forward by the Ministry of Finance based on the reconciliation that has been happening at the FAAC – the Federal Allocations and Accounts Committee chaired by the Honourable Minister of State; and we have been doing this work over the past two years.

I believe that the Federal Ministry of Finance has played its role in bringing parties to the table. It has been working every single month to see what is due to the Federation account and what is not due; and has been able through hard work to table this number – month after month, this is the total we have for the period we are talking about – and to get all around the table to agree what the number is. You cannot even begin to discuss unless you have the proper reconciliation.

Now the next stage of the discussion is to ensure that these funds are paid into the Federation Account. We’ve come from a situation where it’s been agreed and admitted that the $49.8 billion that was put on the table is not the right number. We are now at the 10.8 billion. And the next stage is to ensure that we sit down and look at this number to ensure that whatever funds of this belong to the Federation Account are paid in. I think headlines will not bring money into the Federation Account. It is our job in the Ministry of Finance to make sure that every naira owed the Federation comes into the coffers. And that is why the hard and unglamorous work of sitting down and looking at the numbers in reconciling with the NNPC is underway as we speak.

So I want to make clear that any statements made about the disposition of these monies prior to the completion of the reconciliation exercise, I think it’s premature – on all sides, whether it’s from the Central Bank, the Ministry of Finance, or the NNPC. We need to finish the hard work. Where these monies have been spent we need to see the justification very clearly with supporting evidence that they’ve been spent. And where that does not exist, the monies need to be remitted to the Federation Account. This is what we stand for and this is why we are insistent that we focus on what is the hard work to be done. And we will be accountable for managing the government’s finances that come into the coffers of the Federal Ministry of Finance, of the treasury. And we want to one more time reassure everyone that our job is ensure that we get hold of every naira that belongs to the Federation Account.

Now, on non-oil revenues, in recent months also, our non-oil revenues have also decreased due to our recent fiscal policies and to some extent due to some goods being smuggled across our borders. For instance rice, the policies that we put in place – the fiscal policies we put in place to protect the rice industry – have worked but have also led to some unforeseen side effects in terms of increase in smuggling. And we are looking at that to look at these policies and review them to a point where they work better for the benefit of the economy. But I want to say that we are looking at our non-oil sector too. It’s not just oil; we must not be fixated only on oil. And in that regard, we are working very hard. The Federal Inland Revenue Service is working hard to improve on the good job that it has already been doing and has engaged international consultants to help us further boost our non-oil revenue performance. And with the capacity building they are giving and the support, the FIRS, and later on working also with Nigerian consultants, will be able to carry on this work and make sure that our non-oil revenue performance also increases.

Let me end this section of the remarks by assuring Nigerians that on all these issues the Federal Ministry of Finance is pushing hard in the right direction; keeping its focus on trying to correct where it can, the imbalances that exist and pointing out where there are issues sometimes beyond its own capability to solve alone and where it will need the help of the Nigerian public and the legislature. Some of these issues cannot be solved alone. We must come together to grasp them and to move on. On the revenue side we pledge to continue working hard to plug leakages and to boost both oil and non-oil revenues.

Now let me turn to the global economic environment and address the budget. The proposed 2014 budget is being presented to you today; prepared against the backdrop of a fragile global economic recovery and uncertain outlook for the global economy. The advanced economies are growing again for which we pleased, albeit at a slow pace. And emerging market economies face the double challenge of slowing growth and tighter fiscal conditions especially with the anticipated tapering or quantitative easing by the US Federal Reserve bank. Overall, 2013 global growth was weak with the preliminary estimate of 2.9% growth for the world economy.

Why do all these things matter to us? It matters because Nigeria is well integrated into the global economy. And so we must remain vigilant about developments that happen internationally. The USA and Europe together account for nearly 54% of our export while the BRICS economies: Brazil, Russia, India, China and South Africa also take up nearly 26% of our total export. We’ll therefore need to manage our domestic affairs prudently in the light of the continued global uncertainty and weakness in growth. Added to these dynamics is the changing International Natural Resources Map. The discovery of shale oil and gas in the US as well as the increased oil and gas output from new oil producers suggest that we have to be vigilant about lower demand for Nigeria’s crude in the near future. And I commend you all to look at the map that is coming up on the screen. Just taking Africa, you see a dynamic and changing oil map and what has become, or is potential competition. We have 1975, the next one, look at what it looks like in 1985, in 1995, in 2005 and in 2015. You can see that virtually every country in Africa is becoming an oil and gas producer. And we put question mark for 2025. We will not be surprised if by 2025 every country on the continent is red because they have huge oil and gas deposits. So we as Nigerians have to wake up. It’s not just what is happening in the US with shale gas and oil where the US is now becoming self-sufficient and we’ve seen a drastic decrease in the demand for our oil; luckily made up by demand by the BRICS, particularly, India has taken up that space. But we’ve seen in Africa what is happening.

I think this is a wakeup call to us to look at the way we develop to really pay attention to the issue of the diversification in the economy. And we need to really work hard on this. This is what President Goodluck Ebele Jonathan has pledged. And if you look at this Transformation Agenda and where we are really laying emphasis you will see that this is the direction in which we are going. But I commend this map to every Nigerian because it should make us reflect and think greatly.

Now ladies and gentlemen, let me talk a little bit about the budget 2013 because the essence of the budget is the outturn in the implementation, because this is how the impact is felt by Nigerians. And Nigerians often say that “Well, we can talk about growth, but what does it mean to me? What does it mean in terms of changes, in delivery of services, in infrastructure, roads and so on?” So we need to talk about the outturn of budget 2013. Talking about the outturn, we want to focus not on the numbers or percentages. You will see I will not talk about the percentages because we don’t want to enter into that debate. We want to enter into the debate of what is actually happening on the ground. And on this, we need to prefix this by saying that the growth and the progress we see in the sectors could not happen without a stable macroeconomic environment. I think the country representative of the IMF alluded to this. We have begun to take this for granted but I think that one of the biggest achievements of the Nigerian economy is this stable macroeconomic environment which enables businesses to plan and the country to have stability. And despite the challenges internationally, the Nigerian economy grew by 6.5% in 2013 driven by growth in the non-oil sectors and this is where it is exciting, it is actually the Non-Oil sectors such as Agriculture, Housing and Construction, Wholesale and Retail Trade, Telecommunications and Creative industries that are driving the growth in our economy.

Inflation has remained now at single digit coming down from 12% at the beginning of the year to 8%. And what does this mean? It doesn’t mean that there is no inflation in the economy, but it’s coming down which has a good impact on the cost of goods and services within the economy. The exchange rate has had its ups and downs but it has been relatively stable. And the increased confidence in our economy by the international community must not be pushed away. This has manifested in so many forms:

In the investment in our Eurobond that was floated, which was four times over-subscribed. 72% of those investing were from the US.
It comes in the recent description of Nigeria as among the countries that are being looked at as the emerging frontier markets that will do well within the next ten years.

The acronym MINT (Mexico, Indonesia, Nigeria and Turkey) is a new term which has nothing to do with us. It’s not our doing. It is other people that are looking at us and saying that in spite of the world acknowledged challenges that we have, Nigeria is considered a pre-eminent country to be among this group of the next frontier markets – provided it does certain things: takes care of its infrastructural deficits, strengthens it governance, and a number of other features. But I want Nigerians to look at this, that whilst other people are looking at us with hope, we cannot ourselves give in to defeat. So what we have been seeing is that we have a basis to build on. And let me start talking about or summarise a few of these because I’ve also got some of my colleagues who will speak on these issues.

Feeling the impact of the government’s policies in 2013, we went into great length in this document of the 50 questions to describe the areas. And if you recall, when Mr. President held his mid-term review, he also went into detail to summarise where those areas were making impact. The first is job creation, the National Bureau of Statistics has calculated the number of jobs created in 2013 in this economy; 1.6 million jobs were created in Agriculture, in Manufacturing, through the government’s own schemes, in Telecoms, in services, in formal and informal sectors. The National Bureau of Statistics has come out with this number. I think this is very good progress. Is it enough? The answer is No, because we are adding more than 2million entrants into the job market each year so we have not yet reached the point at which we can cater for all those coming into the market and then to deal with the stock of those who are already unemployed.

So we are not declaring victory. We are just saying that we now know how many jobs are being created and we know what the gap is and we are making progress in that direction. But I know as a human being that if you create 2 million or 1.6 million jobs and I am not one of those 1.6 million, I am not employed, what does that mean? To me, the government is doing nothing. Isn’t it? That is why you hear people – even though we’ve created 1.6 million jobs – they say “Where are the jobs?” because they themselves may not be employed. The other 1.6 million who are now working will not count for them. But that does not mean that these jobs are not being created. What it has done in making this progress is to encourage us to work even harder and with more determination. If we can do 1.6 million we can do 2 million, we can do 2.5 million. We can do more to take care of those coming in and those going out. We do not accept that we should continue in this unemployment situation. We must address it. We are addressing it and that is what is important for this administration.

On infrastructure, we’ve done a whole lot. I know that our civil society colleagues came to talk about his village; it is still the same phenomenon. If the major road is built and the road to your village still does not work, you are going to feel that this government has not done what it should do. But I think we all need to also have an objective view of what is happening and acknowledge where things have been done and where we need to do more. For roads, we’ve progressed. I received many messages and tweets – and the minister of works is here – with Nigerians who went home for Christmas and who had a smoother journey than they had ever had before. Again does that mean that everything is now done? The answer is No, but we’ve made progress. The Kano-Maduguri road, Abuja-Lokoja, Apapa-Oshodi, Onitsha-Enugu-Port Harcourt, Benin-Ore-Shagamu. For railways, the Lagos-Kano is done and work is progressing on the Port Harcourt-Maiduguri, Abuja-Kaduna, Itakpa-Ajaokuta-Warri. For inland water ways, we’ve dredged about 72Km of the Lower Niger from Baro in Niger state to Warri in Delta state. We’ve completed construction of the Onitsha inland port and the president commissioned it, while the Baro port is nearing completion. As a result we have increased cargo volume on inland water ways from 2.9 million metric tonnes in 2011 to over 5 million metric tonnes in 2013.

In water, we completed construction of nine dams thereby increasing the volume of the nation’s water reservoirs. We have also made progress on major projects such as the South Chad irrigation project, the Bakalori Irrigation Project, the Galma Dam. And overall total irrigable area increased by over 31,000 hectares and increased production of over 400 million metric tonnes. I’m not saying that this is it. I’m saying that we have been implementing and we can actually record specifics of what has been done.

In Aviation we completed the upgrade of 11 airports terminals; we are working on the remaining terminals. In 2013, the Enugu Airport became operational as an international airport with a new terminal under construction. And we commenced work on the construction of three new international airport terminals in Lagos, Kano and Abuja. Since we are all here in Abuja you can see the construction. It has started in the new terminal. I hope all of you have seen it? (Audience reacts) You know the reason I have to check with you is because sometimes when we say something they say, “It’s a lie,” that is why we now have to document everything by video. You will be seeing a video later on that shows you some of these roads; because Nigerians who don’t travel on those roads, who don’t ride the rails, who don’t go on the Inland Water way, who do not pass by the airport will say we are lying. Is that not what they will say? So we have to now begin to show evidence that these things are actually happening because the naysayers would have you believe that with this government that has been working so hard in 2013, the budget has not achieved anything. And on the contrary, we have told you specifics of 2013 achievements. So that is what we want to talk about.

Now in Power, the Minister of Power is here. The proof of the pudding in Power for Nigerians will be when they start getting that Power all the time. Isn’t it? So again we are not saying we are there but we are moving. I’m not going to say much because we have the Minister. But I want to mention that part of the process is that the privatisation of the Power sector had been admitted by administrations ago. Three or four administrations ago had agreed that we have not been capable of managing the power sector. If you are not capable of doing something and you continue to do it what do you get? The same poor results. So three administrations ago, the process of privatising the power sector began, but it was not finished. This administration has finished what was such a difficult process that has taken over a decade to get us from start to completion. In order for us to get results somebody has to complete that process; and that’s what has been done. Now much of the sector is in private hands. And what we are now waiting for, for Nigerians to truly acknowledge the result, is for Power supply to increase appreciably. We have had transition problems and I’m not asking you to come and say that yes we’ve done it. I know that we will do it one day because we’ve taken the right steps.

On Communications Technology, we have constructed 500km of fibre optic cable to rural areas and a total of 266 Public Access Venues were established in 2013. We’ve also deployed a fibre optic high speed internet network to connect 27 Federal Universities and provided computing facilities for 74 tertiary institutions and 218 public schools across the country. Finally, we’ve established innovation centres to support entrepreneurs in the ICT sector and we launched a 15 million dollar venture capital fund for ICT businesses to encourage our young people.

In Industry, Trade and Investments in 2013 we launched the Industrial Revolution Plan. It’s a strategic plan for Nigeria’s industrialisation. Nigeria has been billed by the UN conference on Trade and Development (UNCTAD) not by us – please check their tables – as the number one destination in Africa for investment attracting over 7 billion in investments; and as one of the most profitable countries to invest in on the continent. Again these are not made up by us; it’s United Nations statistics. That is why statistics is important, both those done externally and internally for us to look at the facts not the sentiments.

Some of the important investments that have come include 250 million dollars investment by Procter and Gamble in Ogun State in a new factory; 40 million dollars in Agriculture project by Dominion Farms in Taraba State; 1.2 billion dollars in fertilisers and petrochemicals by Indorama in Rivers State; a $200 million Steel Plant by CAM industries, our own indigenous steel plant in Ilorin; a 9 billion dollar investment in petrochemicals and refinery by the Dangote Group – and I could go on and on. Again I have cited specific examples of both international and local companies because people say, “Well, it’s all figures, where are they?” so that we can know that it is real. And you can visit those places to see whether those factories and those companies exist or not. These industries that are investing are creating jobs and that is what we want to encourage. That job creation exercise is linked to this drive for both domestic and foreign investments. The government has also successfully negotiated a strong common external tariff agreement with our ECOWAS partners starting 2015 which will enable us to protect our strategic industries where necessary.

As a result of our backward integration policies that I spoke about and the incentives that we’ve given, Nigeria used to import virtually all its cement requirements up to 2002. I’m sure that many Nigerians still have the memory of loads of ships loaded with cement, some of them with sand in the guise of cement. Isn’t it? We were importing everything. The government gave incentives to these cement industries. We gave waivers and exemptions to enable them integrate backwards so that we can produce our own cement because we have all the raw materials. Where do we stand today? In 2002 we were producing 2 million metric tonnes – very far from our demand. Today, we are producing 28.5 million metric tonnes against a demand for 18 to 19 million metric tonnes. What does that mean? Nigeria has now become a net exporter of cement.

In the Oil and Gas industry, work was completed in 2013 on 136 km of gas pipeline from Oben to Geregu; the 31 km pipeline from Itoki to Olorunsogo and the acquisition of 250 square kilometres of 3D-seismic data for the Chad basin. The government also initiated in 2013 the Ogidigben Gas Industrialisation project which will lead to a petrochemicals complex in Delta State.

In Agriculture, a lot has happened. And this morning I think that we are launching the next season of dry season farming for Agriculture. An estimated 4.2 million farmers received subsidised inputs via the government’s growth enhancement scheme. And we can see from the impact of what has been done with farmers in trying to increase the access of farmers to inputs from 11% which we used to have before to 2 or 3 times that, that the impact on our food production, particularly rice, has gone up. We produced 1.1 million metric tonnes of rice in 2013 – that we have not produced before – of dry season rice. And we are launching a strong effort in our Agricultural sector to attract 750,000 young Nigerians to become Agricultural entrepreneurs. The Minister of Agriculture calls them Nagropreneurs who will handle agriculture as a business. We’ve set up a fund in the Agricultural sector; it’s called FAFIN that has attracted the German agency KFW. And we have about upwards of 25 plus million dollars. And we are aiming for a hundred in order to support these agricultural entrepreneurs so that they can invest, expand jobs for themselves and their colleagues and their fellow citizens and increase food production in this country. Our aim is that by 2015, we will be self-sufficient in many of the food items which we import.

On health, the Saving One Million Lives programme has recruited 11,300 frontline workers who were deployed to under-served communities across the country. And we’ve reached over 10,000 women and children with conditional cash transfer programmes. The Type-3 Wild Polio virus has been contained in 2013 with no recorded transmissions for more than one year and Guinea worm that previously affected the lives of over 800,000 Nigerians yearly has been totally eradicated.

In education, we have a long way to go but we paid attention to out-of-school children (where Nigeria has one of one the larger out-of-school children population in the world) trying to cater for them through the construction of 125 Almajiri schools and other facilities. We also looked at tertiary education. We added 3 new federal Universities, libraries, technical schools, science centres. I could go on. I don’t want to go through them all but we’ve made a considerable effort. But we acknowledge that we need to strengthen, better finance and restructure our education sector for a stronger Nigeria of the future that has the skills it needs to drive this economy.

In sports, the Administration took concrete steps to restore the glory of Nigerian sports in 2013. The President made it a cardinal point and he succeeded, and we gave the financial backing to do that. In 2013, our sports men and women continued to make us proud. They won the Under-17 World cup – the Golden Eaglets – in case you’ve forgotten. The Super Eagles won the African Nations Cup. And we know that the Eagles will make us proud again in 2014 World Cup Finals. Now, you might say sport is not part of the economy; not true, it is a huge part of the economy. And if you see in advanced countries what is happening? Why do they have all these clubs that many of us here pay money to watch or to bet on? It’s a huge driver in the economy and a huge driver of jobs creation. And the President has said that we must make sports a big part of our diversification agenda and Transformation Agenda.

For the Creative Industries, we didn’t want to interfere, because creative industries are doing well by themselves. But we saw there are ways and opportunities we could support with capacity building, distribution issues; and the President launched a N3 billion grant programme to support Nollywood. About a billion of that has been disbursed to support various capacity building programmes and we will continue in 2014 with this programme.

On Women Empowerment, the Minister of Women Affairs is here and she will say more. But I just want to talk about one programme which she has spearheaded with us in the Ministry of Finance. To empower girls and women we did something that is unusual which is to engender our budget. That is to try to make empowerment of women something real within the budget, something mainstream; and we began a pilot programme with the help of DFID, the UK agency. We’ve been able to mainstream an innovative approach to empowering women. We are calling it Growing Girls and Women in Nigeria (GWIN). And I want to thank the DFID for the work and the support they gave in this. What did we do? We asked several Ministries, Pilot Ministries if they will specifically identify results that would empower women, they will get additional budget and Mr. President announced it in 2013. I just want to tell you we have some results.

In Agriculture, the Ministry of Agriculture has trained over 2000 young women across the country in Agricultural methods and provided them with farming starter kits for fishery, snail keeping, cassava, rice and animal rearing. In health, the Ministry of Health has undertaken about 2000 repairs of VVF which is a condition that many young women in this country suffer from due to child birth. And they’ve done these repairs on women in various national centres across the country and brought a smile on the faces of 2000 young women who would otherwise not have had access to this. In the Ministry of Works, FERMA has specifically targeted and rehabilitated several roads that are market access important roads for women who are undertaking trade. Just to mention three areas – there are many more but we don’t have time.

Ladies and gentlemen, in 2013 we have realised all these achievements despite revenue shortfalls which resulted largely from oil production shocks arising from oil pipeline vandalism and oil thefts. But we’ve managed to implement the budget and meet our obligations on the wage bill, the debt service bill, overhead expenditures and in addition we released over a trillion in capital expenditure of which 646.8 billion was expended as at the end of 2013 to accomplish these things we have accomplished including support to those we did by policy measures.

The implementation of the 2013 SURE-P budget also progressed well with about 180 billion or 66% of the SURE-P budget expended on various programmes and projects out of the 2013 SURE-P budget of N273.5 billion. So this will give you – and as you’ll see later in pictures – a good grasp that in 2013 this Administration was working and achieving results.

Now let me move to the 2014 budget. Distinguished ladies and gentlemen, the primary purpose of this gathering is to consider the 2014 budget proposal and estimates, which I have the honour to present here today.

It is built on the pillars of macroeconomic stability, structural reforms, governance and institutions. But above all, it is built on trying to deliver to Nigerians what will make impact to them. So let us not say that we are engaging in very high language. Sometimes when we use some of these words – structural reforms, macroeconomic stability – that is when people say this is so much grammar. Let’s put the grammar aside.

The 2014 budget has policies and proposals which will create more jobs for Nigerians than we created in 2013 and will also enable us to attend much better to those at the bottom end of the ladder in our society. That, in plain English language, is what I am trying to say today. We want to build a Nigeria and a shared future which we can be proud of. And we are laying the foundation brick by brick.

Now in preparing this budget, we’ve been guided by two main considerations. First, the appreciation of what is happening globally that I spoke about earlier, also we’ve been guided by the need to maintain a prudent approach to estimating revenues in 2014 so as to cushion possible fiscal shocks that may arise; also the capital spending proposal. And you know we are not happy, you are not happy that we don’t have more capital. But we have also seen that even the capital we have, if we deploy it to the key priorities of this country, it can yield more results than you would expect. And that is what we have done – to deploy the capital to the key areas of infrastructure both human and physical and also to the security of the country.

The overall story is that: yes we can have fiscal consolidation and a prudent budget but we can also unleash growth by targeting the resources we have to unlock those areas that are proving to be constraints in the economy. So in tandem with these, the budget is underpinned by the following parameters: oil production of 2.388 million barrels per day compared to 2.56 million barrels per day in 2013, bench mark oil price of $77.5 per barrel, projected real GDP growth of 6.75% and an average exchange rate of N160 to the dollar.

Based on these assumptions, the 2014 budget envisages a net federally collectible revenue of N7.5 trillion. Of this, N3.73 trillion is projected to fund the federal government’s budgets – representing about 9% reduction from the N4.1 trillion for 2013. A total expenditure of N4.642 trillion representing a decline of about 7% from the 2013 budget of N4.98 trillion is proposed for the 2014 budget. This is made up of various categories: N399 billion for statutory transfers, N712 billion for Debt Service, N2.41 trillion for recurrent (non-debt) expenditure and N1.245 trillion for capital expenditure.

Key allocations, we will hand to you but we want to mention some. Federal Ministry of education including UBEC and TETFUND N655 billion, Defence N340 billion, Police Affairs and Police Service Commission N301 billion, Health N262 billion, Works N128 billion, Power N102 billion, Agriculture N66 billion. And there are other allocations which we can also share with you. These amounts also leverage additional resources from the donor community which add to our ability to implement the budget.

The sum of N268.3 billion made up of Federal Government’s share of savings from the partial removal of subsidy on fuel of N180 billion augmented by the 2013 projected unspent balances is proposed for the 2014 SURE-P budget. This amount will be used to make further progress in the provision of social safety net schemes and to boost the development of critical infrastructure projects. So we also need to remember that in the SURE-P we are also boosting the capital expenditure and the expenditure on social safety nets with an additional N268.3 billion. The Federal Government’s Aggregate Spending in 2014 is estimated to rise to N4.91 trillion of which a total of 1.53 trillion is for capital expenditure when the 268.3 billion for the SURE-P programme is added. Coming on the back of the downward projection for the revenue estimate for 2014, the fiscal deficit is projected to rise marginally to about 1.9% of GDP in the 2014 budget compared to 1.85% in 2013 which is still keeping a very tight and prudent budget and in consonance with the fiscal responsibility law which enjoins us to keep the budget deficit below 3% of GDP.

Now, the priority areas of the budget: It will continue to place emphasis on critical sectors of the economy such as the ones that I have already described for 2013. Education, health, roads, rail, power and aviation continue to be given priority. That is, our infrastructure is of paramount importance to us and to Nigerians. And to supplement Government’s effort the Private Sector will be brought in through Public-Private Partnerships. We have to work hard on this because we acknowledge that government funding alone will not be able to deliver all the benefits and services in infrastructure that we need for this country. We are also exploring, of course, and managing to get through approval from the National Assembly, of concessional credits from our partners which will enable us implement some of these areas in infrastructure, education and health.

On Housing and Construction, this is a primary and key area of focus that we have now launched in 2014 as a centre of government policy and of the Transformation Agenda. This was launched by Mr President just on Thursday last week. The Administration is fully aware that investing in the housing sector in Nigeria will address several issues. One is the social need for families to have a roof over their heads. We need to address it, we need to begin that journey to multiply the availability of housing both on the mass housing end for the lower income people in our population as well as the low and middle income. And that is what we launched.

On Thursday, Mr. President launched this. We know that there is no family that still lives without wanting a roof over its head. And this is a very critical factor that we have to date not paid as much attention to. This Administration has launched an effort. We know that a booming Housing Industry will also create jobs. From various studies, we know that every new home can create at least 5.62 direct jobs and 2.48 indirect jobs through housing related expenditures. So this is a sector that should give us that handle on improving job creation within the economy and to give our young people hope. Young people in this country need to know that they will grow up in future in a country where they will be able to access housing, they will be able to access a mortgage to be able to have a roof over their heads or participate in a rent-to-own or lease-to-own scheme where at the end of twenty years they will be able to pay off and have a home of their own. So this is a cardinal policy of 2014 for this administration.

I am happy to say that the Nigerian Mortgage Refinance Corporation which was launched, the guarantee scheme to allow access for lower income people, the effort at mass housing launched with the Ministry of Housing and Lands – all these are kicking in this year. Let me also comment here and illustrate what we said earlier that when you look at the capital budget of the Ministry of Housing, you will see a budgeted amount of 12.9 billion. And when somebody looks at this, they will say, “What is this? How are they saying that they are going to create jobs with just this amount?” But that’s missing the point. I’m illustrating what I said before that through government’s supportive policies for this sector we are going to catalyse eight times more in the beginning than this budget you see here for housing by supporting the private sector to be the deliverer and creator of jobs. The Nigerian Mortgage Refinance Institution will have $250 million that it can work with – perhaps about N50 billion. It will float bonds for another N50 billion. That’s already almost N100 billion in capitalisation. Compare that to the N12.9 billion which we see in the budget. So when we look at these numbers, let’s not get fixated that this is the only thing. No, these are catalysts to bigger government policies that liberate more resources and create jobs. And that is why this budget is a budget for job creation and inclusive growth.

In Agriculture, we continue to focus on this sectoral initiative as I mentioned before. We plan to attract 750,000 young Nigerians to be Nagropreneurs. We are establishing this FAFIN fund of a $100 million starting from 25 to 100 million. We will focus on SMEs – Small and Medium Enterprises – and boost manufacturing in these SMEs by implementing the Nigerian Enterprise Development Programme (NEDEP) to help SMEs with business development support, provision of access to finance and training. This will support again our young people who are involved in the SMEs sector.

We are planning in 2014 as part of government policy the establishment of a Wholesale Development Finance Institution. What do we mean by this? If you look at our economy, you’ll find that business people do not have access to medium to long-term money. They are borrowing short-term; 12 months, 3 months and sometimes 3 years to invest in enterprises that require 5, 7 and 10 years. How can you then make progress in this economy? How can we sustain it if people cannot find long-term finance? A cardinal policy of this government is the establishment of this Wholesale Development Financial Institution to bring in medium to long-term tenor money; 10 to 15 years money into this economy. Just as we now launched the Mortgage Refinance Institution, we expect that by the end of this year we will also plug another institutional gap in the economy by launching this. And this again will lead to more job creation for Nigerians. It will help us create those jobs that will help those at the bottom end of the ladder. This is an important point of our policy.

In Infrastructure, we are going to continue along the lines of roads, power, works, bridges; we will deliver on all this. I will not say much here because I have two of my colleagues who will say a bit more about this. We will continue with our programme on the Creative Arts to ensure that Nollywood continues to create jobs. For those who don’t know, they’ve created 200,000 direct jobs and according to World Bank estimates, about a million indirect jobs. So if we can just support them in those areas where there are gaps they will continue to create more jobs for our young people.

Now as I head towards the end of my presentation, let me make a very important point on the issue of Social Safety Nets. What are these? Social safety net is what government put in place to help with the welfare of citizens at the bottom end of the ladder who cannot access any jobs or resources. Now in the country, we do not have a comprehensive social safety net but we have experimented with different things. I mentioned conditional cash transfers for pregnant women, conditional cash transfers to get girls into school, community development programmes supported by the World Bank, the ADB and other institutions. And what we are trying to do now is that starting in this 2014 we are going to sit down with the help of our partners, particularly the World Bank, but also other development agencies: DFID, the African Development Bank, the EU; to work on this issue of Social Safety Net to see if we can come up with a comprehensive system that can spread the benefits of things that are already working and give poor Nigerians a cushion within this economy. So we will begin work on this in February. We hope that by the end of 2014 we will have a system which we can put in place.

We are continuing with our efforts to reduce the cost of governance. Specific measures to be taken in line with Mr President’s directive include holding the training of MDAs and Parastatals Personnel in Nigeria including constraining or slimming down the expenditures that we spend on overseas training in all our agencies. The number of overseas trips by government officials will also be slimmed down, whilst the size of delegations accompanying key government officials on foreign trips will also be reduced. Mr President’s office has already started this by trimming down considerably the size of the delegations that accompany him as his last trip to Cote d'Ivoire shows. The head of service and the DG budget have been mandated to develop new guidelines that will address this issue of foreign travel and incessant training within our Administration. We anticipate to save about N3 billion from the introduction of this new policy.

To further reduce the cost of governance, we have also introduced all the systems, electronic platforms which we’ve talked about. We’ve started; we’ve been implementing them for a couple of years. The Accountant General is here who with the DG budget has been managing this.

We hope to complete in 2014 the installation of the treasury single account, the Government Integrated Financial Management System (GIFMIS) and the Integrated Payroll and Personnel Information System (IPPIS). I hasten to say that with the installation of three electronic platforms at once to modernise our finances we have of course experienced glitches; and these glitches have come sometimes when information is not accepted by the system and rejected. So you will see some places where individuals did not get their salary on time because they were thrown out by GIFMIS or something else happened with the IPPIS. We’ve been correcting this and overall we have a high rate of satisfactory implementation now but there are still these glitches that we need to plug. We intend in 2014 to complete the introduction of these platforms.

Lastly, the security of lives and property of all Nigerians will continue to be a top priority of this government and in collaboration with our development partners we’ll also launch an initiative to cushion the Northeast of the country from where the minister of State comes – he’s from Yobe. We recognise the particular issue of the Northeast and with the development partners we are planning an initiative, N5 billion intervention programme that we’ll scale up. We just want to start in those areas in which we can work and to restore hope for the people living in the Northeast by rehabilitating local schools and health clinics, providing additional assistance to farmers and helping to restore their livelihoods community by community.

Distinguished ladies and gentlemen, I’m concluding. Nigeria has made a lot of progress in recent years. I’m pleased to reiterate that the 2014 budget is designed to sustain and consolidate the gains that we have been recording. I have tried through this speech to answer many questions and expose many details that Nigerians are curious to learn about. We have produced all documents that will enable our public to know more about this budget. The budget itself is loaded on the budget website which we all have: www.budgetoffice.gov.ng.

You can get access to the details of the budget; you can also get the interpretation of the budget. Our budget as I’ve said is one of the most transparent budgets because it gives you details and this should be seen as a plus for the country.

Ladies and gentlemen, I want to thank you all for listening to me so patiently. I’m sorry that I took so long, but we are often accused of not giving enough information. And so I’ve given you a surfeit of information and we have still more. I want to thank you for being here, thank my colleagues and thank my Budget Office and Finance Office Staff.

Ladies and gentlemen, I give you the 2014 budget estimates of Nigeria.

Thank you.

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