FINANCE Minister Ngozi Okonjo-Iweala stepped in yesterday to calm frayed nerves, following reports that the government may have removed fuel subsidy.<\/span><\/p>\n The co-ordinating Minister of the Economy said the subsidy, which the government said hit N1.3 trillion this year, was intact.<\/span><\/p>\n \u201cThe President is consulting widely. He makes the final decision. He is talking to stakeholders all over the country and at the appropriate time he will make the decision,\u201d Dr Okonjo-Iweala said in Abuja.\u00a0<\/span><\/p>\n The removal of oil subsidy, she said, \u201ctouches everyone and you must allow the process\u201d. \u201cThe President is consulting extensively, meeting with youth groups, labour, students, religious leaders all over the country. We are involved in those meetings. He has touched base with different segments of the country, but we will give him the respect to make the decision he wants to make,\u201d the minister said, declining further comments on the issue.\u00a0<\/span><\/p>\n She was explaining the 2011 budget to reporters.\u00a0<\/span><\/p>\n According to Mrs Okonjo-Iweala, the government borrowed N852 billion this year. It plans to reduce this to about N794 billion next year. \u201cWe will keep bringing it down,\u201d she said.<\/span><\/p>\n The minister spoke also on budget implementation, saying \u201cgiven that short time, is at a reasonable pace\u201d.<\/span><\/p>\n Of the N1.14 trillion budgeted for capital expenditure this year, N830 billion has been released and \u201cwe have about 60 per cent execution of the N830 billion\u201d, she said. \u201cGiven the time frame, we believe implementation of the 2011 budget has not been unreasonable as, of this total released, we should have about 70 per cent execution by the end of this month.\u201d<\/span><\/p>\n On the financing of the 2012 budget deficit, Mrs. Okonjo-Iweala said the government has \u201ca series of sources; the first is, we will make sure domestic debt is sustainable\u201d. \u201cWe do not want to rack up debts that we cannot pay. We will do some borrowing, but we want it to come down.\u201d<\/span><\/p>\n Another avenue that the government hopes to explore to finance the 2012 deficit is the privatisation proceeds.<\/span><\/p>\n \u201cWe are looking at signature bonuses; these are the usual ways of financing the budget,\u201d she said.<\/span><\/p>\n When asked why so much money was voted for security in the 2012 budget, the minister replied: \u201cWhen resources go into security, it does not mean we abandon other areas. The challenge we have in this country is to make sure that our security apparatuses have the resources they need to be able to respond and at the same time to go deeper into the issue and ensure the inclusiveness of the growth of our economy.\u201d\u00a0<\/span><\/p>\n The N921.91 billion voted for security in 2012, she said, \u201cis the budget of the security agencies that deal with security, defence, Police Service Commission and formations, National Security Adviser\u2019s Office and the Ministry of Interior. That is why the budget is big because we have added them all together, but other areas have not been abandoned.\u201d<\/span><\/p>\n Budget 2012, Mrs Okonjo-Iweala said, is not only looking at the expenditure side of the budget and looking at a manageable fiscal deficit of 2.77% of GDP, \u201cbut we are also looking at the revenue side by taking measures to improve internally generated revenue collection; corporate tax collection and block leakages within the system\u201d.\u00a0<\/span><\/p>\n The government \u201cwill be auditing the parastatals that generate revenue one after the other. \u201cThey already have a letter to this effect.\u201d<\/span><\/p>\n On corporate tax collection, the minister said the government has about N170 billion outstanding \u201cand we are negotiating with the various culprits who have questions or issues to get agreement on that amount of money being remitted to the budget as well\u201d.<\/span><\/p>\n The government, she stressed, will focus on reducing waste and inefficiency within the system to cut down on recurrent expenditure.\u00a0<\/span><\/p>\n On the huge recurrent expenditure budgeted yearly, the minister noted that \u201cthere are different categories of recurrent expenditure; one is personnel, which takes up our budget in this country, its human \u00a0being, its personnel, its people working in the civil service \u00a0and that is by far and away where the money goes\u201d.<\/span><\/p>\n In the 2012 budget, the personnel cost for Ministries, Departments and Agencies, Mrs Okonjo-Iweala said, is 35 per cent, which is the larger part in that recurrent portion, whereas the overhead portion is just five per cent for MDAs.<\/span><\/p>\n The government, she said, \u201cwill find ways and means in a rational manner by reducing waste and duplication.\u201d \u201cThat is the natural place to start and trying to plug leakages. Biometric exercise alone brings down cost without hurting anybody. Before we take any drastic action, we will also look at how to streamline agencies so that we don\u2019t duplicate work. When we finish with these two, we can move to other measures, if needed.\u201d\u00a0<\/span><\/p>\n \u201cWe don\u2019t just look at retrenchment; we look at their quality of education, the training we give them and their skills to determine if we have the right kind of skills in the civil service to lead us to the next century. So, we are looking at the quality issue in the civil service as well. It is not that easy to cut personnel cost because you are talking of cutting salaries for workers and their dependents.\u201d\u00a0<\/span><\/p>\n Still on forecast deficit, Okonjo-Iweala maintained that the government does not expect the deficit to change, but rather expects it to remain at 2.77 per cent of GDP. \u201cGiven what is happening around the world, the kind of budget deficit we are proposing is reasonable in terms of fiscal consolidation.\u201d\u00a0<\/span><\/p>\n The minister, however, denied that the 2012 budget is expansionary, arguing: \u201cYes, 2012 budget is slightly higher than 2011, but in real terms, it is not. This is really a tight budget; we are budgeting at a benchmark of $70, bringing it down from the $75 of 2011. This is a very tight budget for us. If you speak to CBN governor, he is one of the happiest persons in town because he agrees with this budget; unless you want us to cut the budget in real terms, which I don\u2019t think any other country does.\u201d<\/span><\/p>\n