The Minister of Finance, Dr Ngozi Okonjo-Iweala, has attributed the high recurrent expenditure in the 2014 budget to increasing wage bill of workers and political office holders.
Also responsible for the huge expenditure profile, according to Okonjo-Iweala, is awards and incentives, which the Federal Government often gave to deserving Nigerians.
Okonjo-Iweala, who is also the Coordinating Minister for the Economy, made this known at the Public Presentation of the 2014 budget in Abuja last Monday.
She said that the situation had remained a major challenge to the economy and had led to the reduction in the funds available for capital projects.
“We worked hard to reduce this ratio from 74.4 per cent in 2011 to 71.5 per cent in 2012 and further to 67.5 per cent in 2013, but it has risen again to 74 per cent in 2014,” she said.
The minister said that stringent action needed to be taken to halt the trend, and stressed the need for Nigerians to make tough choices about the national budget structure.
Reports says that personnel cost rose from N1.72 trillion in 2013 to N1.72 trillion in the 2014 budget estimate.
Okonjo-Iweala said that in addition to the high wage, there were pension arrears, which needed to be incorporated in budgets in the future.
She cautioned that the size of expenditure on salaries would increase further if action was not taken to address the trend.
According to her, it is important to strike a balance between a growing wage bill for the public sector and investing more on infrastructure.
She decried the non-implementation of the Steve Oronsaye Committee’s Report on review of public service, saying: “We have had difficulty in streamlining redundant agencies because most of them are underpinned by law.
“We are, therefore, looking to the National Assembly to assist us in reviewing and repealing these laws to enable us rationalise some of these duplicating agencies.”
On the contentious 10.8 billion dollars oil revenue, Okonjo-Iweala said that her ministry had played its part by bringing all parties involved to the table to discuss the funds that should be remitted to the government.
“The next stage of this discussion is to ensure that these funds are paid into the Federation Account. Unfortunately, newspaper headlines will not bring money into the government coffers.
“What will actually bring money is the hard work of completing the reconciliation exercises to find out what NNPC has spent on its operations and what has to be remitted to the treasury,” she said.
She assured that the ministry of finance would continue to stand for accountability and ensure that monies that belong to the treasury were paid or accounted for.
On the non-oil revenue of the economy, she attributed recorded drop in the collection to the recent fiscal policies and smuggling of goods across the nation’s borders.
The minister, however, said that a review of the fiscal policy was ongoing and tasked the Nigeria Customs and the Immigration to increase their surveillance at the borders.
She added that the Federal Inland Revenue Services was collaborating with international agencies on ways to boost the non-oil revenue performance.