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The Conduct of Fiscal Policy
Fiscal Policy 1999
The main policy focus of the 1999 federal budget was to establish and strengthen the framework for public sector intervention in the economy. The measures introduced were designed towards establishing the institutional, legal and regulatory framework and policy reforms necessary for economic growth and diversification, enhancing efforts at capacity building and utilization, reducing the level of unemployment, expanding the revenue base of government, and developing and rehabilitating physical infrastructures for investments and economic activity. Owing to revenue shortfalls in the preceding year from drops in oil prices, fiscal policy was geared towards promoting greater budgetary discipline. Accordingly, the total estimated revenue for the year was N 667.7 billion of which oil revenue was estimated at N 453.7 billion, and non-oil revenue, N 214 billion. The projected expenditures were: capital expenditure, N 88 billion; recurrent expenditure, N 211 billion; domestic debt service, N40 billion; and external debt service, N129 billion. The budgeted deficit was N34.1 billion representing 1.05% of the GDP.
The total federally collected revenue for the year was N 949.188 billion made up N 724.422 billion as oil revenue and non-oil revenue, N224. 765 billion. Revenue accruing to the Federation Account was N 576.801 billion; and the Federal Government retained revenue was N 662.585 billion. Total expenditure by the government amounted to N 947.690 billion of which N449. 662.4 billion (47.4%) was recurrent while N 498. 028 billion was capital expenditure. The fiscal operations resulted in a current account surplus of N 212.923 billion representing 6.3% of GDP. However there was an overall deficit of N285.105 billion or 8.4% of GDP, which was mostly financed by borrowing from domestic economy and the banking system.