Nigeria's FEC approves new fiscal framework for 2012-2015 - An extra-ordinary meeting of Nigeria's Federal Executive Council (FEC) in Abuja, Friday approved a new fiscal framework for the federal government between 2012 to 2015 geared towards “fiscal prudence and consolidation”.

The council, presided over by President Goodluck Jonathan, also approved that the Federal Internal Revenue Service (FIRS) begins an immediate enforcement of the nation’s tax laws that will result in the recovery of about 170 billion naira being owed the nation by individuals and corporate bodies (150 naira = US$ 1).

The council also approved the parameters for the 2012 budget to include extending the medium-term expenditure from the current three years to four years; the Benchmark price for crude oil at US$ 75 a barrel; Daily projected production of crude oil at 2.48 million barrels per day; Gross Domestic Product (GDP) of between 7-8 per cent; and Single digit inflation target.

Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who briefed journalists at the end of the council session along with Information Minister Labaran Maku, the Minister of State for Finance, Dr. Yerima Lawal Ngama, and the Director General of Budget, Dr. Bright Okogu, also announced that the council approved changes in the direction and structure of the national budget.

The changes include reducing the budget deficit to 3 percent and trending down over the next years (2015), reducing the recurrent expenditure from the current level of 74 percent to 72 percent next year and below 70 percent by 2015: an increase of 1.5 percent in spending and driving it to below 70 percent by 2015 and driving borrowing by the federal government from last year’s level of 852 billion naira to below 800 billion naira by 2012.

Okonjo-Iweala said that in arriving at the parameters, the council acknowledged the situation in the global environment because of its impact on the price of oil.

The minister also said that while the government would be focused on containing the expenditure side, “We are also trying to raise revenues. There are leakages within the economy that we are trying to block. We have about 170 billion naira estimated taxes that have not been collected. Of this, 131 billion naira are under discussions now, to make sure that both parties agree that this is what is really owed.'

Pana 17/09/2011