Reacting to recent debate on the budget proposal in the Senate, the minister, who thanked majority of the senators who, she said, understood the issues at stake, chided a few others who she said made allegations and accusations not based on fact.
In a statement issued on his behalf by her media adviser, Mr Paul C. Nwabuiko, the minister said government was continuous, adding that she had no desire to shirk her responsibilities.
“The effort to personalise these issues on the basis of inaccurate information is unfortunate and must be roundly refuted.
“The first point made by some senators is that she is responsible for the rising recurrent expenditure, which, according to them, rose from 69 per cent in the 2013 budget to 76 per cent in the 2014 budget. This is inaccurate, as shown by recent trend of the government’s recurrent expenditure.
“The fact is that in 2010, the government awarded salary increment of 53 per cent across the board to the public service, which increased the wage bill from N856.9 billion in 2009 to N1.36 trillion in 2010.
“At the time, finances were inadequate to back this award, and the government had to increase domestic borrowing significantly to cover the shortfall. This caused a rise in government’s domestic borrowing, from N524 billion in 2009 to N1.36 trillion in 2010.
“This is also the singular cause of the country’s rising domestic debt profile, from 14.83 per cent of our Gross Domestic Product (GDP) in 2009 to 17.98 per cent of GDP in 2010. The rise in salaries is also reflected by the sharp increase in the recurrent expenditure to 74.4 per cent in 2011,” the statement said.
It further explained that the minister was not in government when these events took place, adding that “President Goodluck Jonathan has focused on reversing this trend with various measures already introduced, leading to a steady decline in recurrent expenditure from 74.4 per cent in 2011 to 71.47 per cent in 2012, and then to 67.5 per cent in 2013.”
The statement further explained that two reasons was responsible for the rise in recurrent expenditure to 74 per cent.
The minister noted that “one, a decline in the budget base, as total expenditure of N4.64 trillion in the proposed 2014 is about a seven per cent decline from the 2013 budget level of N4.98 trillion.
“From a mathematical standpoint, this reduction in the budget base will result in a slight increase in the weight of the recurrent expenditure in the budget, which, in absolute terms, has increased from 2013 levels.”
It also noted that the country was yet to “fully absorb pension’s implications of the 2010 wage increases,” adding that “starting with 2013 budget, this administration commenced tackling the payment of outstanding military pensions and 2014 budget will further address civilian pensions.
“We have been under pressure from many quarters, including senators, to integrate the civilian component of pension, and doing so will further increase the recurrent budget.”
On the issue of excessive borrowing, the statement noted that “the flow of domestic borrowing has actually reduced, from N852 billion in 2011 to N588 billion in 2013, to a borrowing of N572 billion proposed in the 2014 budget. Furthermore, for the first time in the history of our domestic debt, the Finance Minister ensured the repayment of N75 billion of our domestic bonds.
Source: Tribune
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