RECENTLY, the Ondo State Ministry of Economic Planning and Budget unveiled a three-year Medium Term Expenditure Framework (MTEF) for the state.
ACCORDING to the Commissioner, Pastor Emmanuel Igbasan, the agenda is to run from 2019 to 2021.
THE initiative follows the Fiscal Responsibility Bill of 2019, which is a radical departure from incremental budgeting to the multi-year framework.
THE plan is to ensure transparency and inclusiveness in governance while allowing for an anticipated inflow and outflow of state resources to relevant stakeholders.
WITH the framework, it is hoped that an allocation of resources for optimum benefit of the citizenry will be achieved.
Igbasan said the idea is for the citizens to see the budget as a mechanism to show what the people want the government to do for them, and not what the government intends to do for the people.
THE Medium Term Expenditure Framework is designed to provide more scope than what the annual budget can afford.
INTERNATIONAL organizations such as the World Bank, the International Monetary Fund(IMF) and the African Development Bank (ADB) use the MTEF annually as a fiscal policy.
NIGERIA had adopted the framework since Dr. Ngozi Okonjo -Iweala became the Federal Minister of Finance.
IT is usually a three-year planning tool that produces the aggregate resource envelope available to government and the allocation of these resources to meet its economic, social and development objectives and priorities.
IT also entails the strategies on a sectorial basis, as well as highlights key assumptions behind revenue projections, expenditure framework and fiscal targets over the planned period.
AS for the Ondo State model, it is in line with the philosophy and aspirations of the present administration’s 5-point agenda.
IN other words, the 2019-2021 fiscal strategy budget is tailored towards the strategic Development and Policy Implementation document (Blueprint to Progress) and MTSS document of the five pilot sub -sectors.
IT focuses on rebuilding the state’s economy through massive mobilization of independent revenue, as well as prioritized investment on infrastructural facilities and agriculture related activities.
ITS key targets are to diversify the state’s economy and reduce its over- reliance on the federal allocation by at least a factor of three.
IT aims to increase Capital/Recurrent ratio as well as ensuring a sustainable debt climate with appropriate level of public sector borrowing.
THE fiscal framework was determined using various interactive forecast methods such as 2-year Moving Average, 4-year Weighted Moving Average etc.
THE HOPE commends the initiative of government, as the framework will allow input of the citizenry on what they expect from the government.
THE aim of substantially reducing dependence on the Federation Account is particularly heartwarming, considering the fact that the Federation Account constitutes an inordinate portion of the state’s revenue.
ANY short fall from the Federation Account, particularly due to a fall in the price of crude oil, means the state cannot meets its target.
SINCE agriculture remains a time- proven way through which the state can generate revenue, we feel it is appropriate for the MTEF document to see the sector as a way to increase revenues.
AN increase in the Capital/Recurrent expenditure ratio will allow citizens of the state to have more and better infrastructural facilities.
UNFORTUNATELY, we are quick to note that MTEF on the federal level has been besetted with problems, because figures based on expected output from crude oil sales have been faulty.
IN other words, the state government has to evolve quick-win strategies designed to gain revenue in order to reduce expectations over crude oil sales.
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