Published On: Tue, Nov 7th, 2017

Buhari Vows To Consolidate Economy In 2018, Laments Revenue Losses In 2017

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…Debt Servicing, Deficit Financing Take Chunk Of N8.612trillion 2018 Budget

President Muhammadu Buhari said on Tuesday that aggregate expenditure of N8.612trillion proposal in 2018 budget would consolidate on the achievements of previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020.

Mr. Buhari presented the budget to the joint session of the National Assembly in Abuja assuring of his administrations determination to address the nation’s economic problems.

Breakdown of the budget shows that N2.652 trillion representing 30.8 percent of the budget is allocated as capital expenditure while N3.494 trillion is budgeted for recurrent.

The Power, Works and Housing subsectors take the highest capital project of N555.88 billion.

The president listed some projects which will be executed under this sector in 2018 to include the Mambilla hydro power project and the National Housing Programme.

Transportation sector comes second with a projected allocation of N263.10 billion for capital projects.

Out of aggregate expenditure of N8.612trillion proposed as 2018 budget profile by President Muhammadu Buhari before the joint session of the National Assembly yesterday, N2.014trillion is set aside for debt servicing aside N2.005trillion deficit in the budget to be financed by external borrowing and proceeds from privatized government establishments.

Other highlights of the budget christened by the President as budget of consolidation are N3.494trillion earmarked for recurrent expenditure, N2.652trillion for capital expenditure, N456billion for statutory transfer.

The budgetary proposals according to the President are based on key parameters such as $45 per barrel oil price benchmark, projected oil production of 2.3m barrels per day, exchange rate of N305 to a US dollar, Real GDP growth of 3.5 percent; and   Inflation Rate of 12.4 percent.

President Buhari explained further that a total sum of   N11.983 trillion  is estimated to be the total collectible revenues for the federation in the fiscal year out of which  the sum of N6.387 trillion is expected to be realised from oil and gas sources, while total  receipts from the non-oil sector are projected at N 5.597 trillion .

Specifically President Buhari in the budget presentation, stated that the total estimated revenue for the federal government in the projected N8.612 trillion 2018 budget   is N6.607 trillion which according to him is about 30 percent more than the 2017 target.

“As we pursue our goal of revenue diversification, non-oil revenues will become a larger share of total revenues. In 2018, we project oil revenues of 2.442 trillion Naira, and non-oil as well as other revenues of  N4.165 trillion .

“Non-oil and other revenue sources of 4.165 trillion Naira, include several items including: Share of Companies Income Tax (CIT) of 794.7 billion Naira, share of Value Added Tax (VAT) of 207.9 billion Naira, Customs & Excise Receipts of 324.9 billion Naira, FGN Independently Generated Revenues (IGR) of 847.9 billion Naira, FGN’s Share of Tax Amnesty Income of 87.8 billion Naira, and various recoveries of 512.4 billion Naira, 710 billion Naira as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of 678.4 billion Naira”, he explained.

He however lamented heavy revenue losses in the 2017 budget proposals which according to him, impacted very negatively on the budget implementation.

According to him, N605.8billion projected as independent revenue for the budget, only N155.4billion was realized as at September this year indicating 74% shortfall.

The consolidation profile of the 2018 budget according to him is hinged on its projected capital expenditure which is 30.8% of the entire budget estimates.

He said: “To consolidate on the momentum of the 2017 Budget’s implementation, many ongoing capital projects have been provided for in the 2018 Budget. This is in line with our commitment to appropriately fund ongoing capital projects to completion.

“By allocating 30.8 percent of the 2018 Budget to capital expenditure, the Federal Government is also demonstrating its strong commitment to investing in critical infrastructure capable of spurring growth and creating jobs in the Nigerian economy”.

He added that   Key capital spending allocations in the 2018 Budget include:  Power, Works and Housing: N555.88 billion; Transportation: N263.10 billion; Special Intervention Programmes: N150.00 billion;   Defence: N145.00 billion;   Agriculture and Rural Development N118.98 billion.

Others are Water Resources: N95.11 billion; Industry, Trade and Investment: N82.92 billion; Interior: N63.26 billion; Education N61.73 billion;  Universal Basic Education Commission: N109.06 billion;  Health: N71.11 billion;  Federal Capital Territory: N40.30 billion.

The rest are,   Zonal Intervention Projects N100.00 billion; North East Intervention Fund N45.00 billion; Niger Delta Ministry: N53.89 billion; and Niger Delta Development Commission: N71.20 billion etc.

Other critical allocations projected in the budget are N500billion for social intervention programme,    N9.8 billion for the Mambilla hydro power project, including N8.5 billion as counterpart funding; N12 billion counterpart funding for earmarked transmission lines and substations; N35.41 billion for the National Housing Programme; N10.00 billion for the 2nd Niger Bridge; and  about  N300 billion for the construction and rehabilitation of the strategic roads .

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