Daniel Idonor, Abuja

Minister of Finance, Mrs. Nenadi Esther Usman explained that the amount was equal to that of 2006, which has reached 40 per cent implementation with the release of the first and second quarter capital allocations.

The minister and the director-general of budget, Mr. Bode Agusto, stated these while briefing State House Correspondents at the end of the weekly FEC meeting.

They said the bulk of the proposal would be spent on education, health, power, works and water sectors, while more funds would be made available to ministries, departments and agencies.

Speaking further on the 2007 budget that is expected to be passed to the National Assembly by the end of September, Mrs Usman said: "We do not foresee any more increase in the budgeted figures. We still believe that we will keep it at about N1.9 trillion. It is basically so because there are some expenditures which we incurred this year which are of a one-off kind. So, next year we would not have such expenditure".

Meanwhile, the Director –General of Budget Mr. Agusto had while analyzing the 2007 budget proposal, stated that "…we are talking about aggregate spending by the Federal Government of Nigeria of N1.9 trillion. It is actually a one per cent increase on a year and year basis. But, if you look at the breakdown by the major expenditure heads, you have about N100 billion in 33 transfers. We have a little bit over N200 billion in debt service that is largely domestic and N1.6 trillion for the ministries, departments and agencies to spend."

According to him, there has been no material growth on a year by year basis because there are some major expenditure that we incurred in 2006 that is not going to be repeated in 2007 and these are the Independent National Electoral Commission (INEC) because the bulk of the spending for the 2007 elections is this year.

"Second is the National Population Commission (NPC) because census has already held this year. Thirdly, we have contractors that we are spending N27 billion to clear their arrears. And lastly, we have the petroleum subsidy of N75 billion this year and the level of subsidy is not likely to be as high as that of next year. So, all these will lead to healthy increases to what the ministries, departments and agencies will spend," he said.

"The major ministries that are receiving the bulk of the money will be education, health, power, works and water. We are also looking at a deficit of not less than one per cent of the GDP next year", he added.

In the fiscal strategy paper for 2007 that is expected to be passed to the National Assembly next week, the Council approved a total of N230 billion for debt services with servicing of the nation’s foreign debts taking N80 billion and the domestic debts taking the remaining amount of N150 billion.

The Director-General who did not however say whether there would be increase in the price of petroleum products, stated that "you remember that the President promised that for the whole of 2006 there would be no increase in the pump price of gasoline and other products. You will also notice that the price of crude has been going up as much as $70 per barrel. So, clearly there will be need to make some adjustments but again, it is left to the President to decide the level of adjustments he wants to make".

While, reviewing the 2006 budget, Agusto said that "for 2006, the Appropriation Act authorized an aggregate spending of N1.9 trillion for the Federal Government and this is made up of Statutory transfers of N92 billion, debt service of N290 billion and expenditures of the Ministries, departments and agencies stood at N1.5 trillion".

Speaking on the physical strategy paper, the Minister of Finance said that "the aim and the objective of having this physical strategy paper in place is just to ensure that our planned spending is set at a very prudent and sustainable level and that this planned spending is consistent with our overall physical objective which we have tried to carry along from the last few years".

The D-G Budget, had while disclosing how far preparations have gone into the 2007 budget, stated that "we have had informal discussions with the members of the Appropriations Committee of the National Assembly and we will formally transmit the document of the Physical strategy Paper before the end of this week. And we will also begin to talk with the Organised Private Sector, civil society about the budget. The ministries, departments and agencies have also been advised of their expenditures".

The Council also approved the payment of N75 billion to about 300,000 pensioners nationwide who will be paid Federal Government bonds through four unidentified banks that would convert the bonds into cash for the pensioners.