…presents N7.288trn estimate for 2017
…suspends joint venture operations
President Muhammadu Buhari, yesterday, presented a budget of N7.288 trillion for 2017 fiscal year to the joint session of the National Assembly. This was as the President the Senate, Dr. Bukola Saraki, made it clear that budget is only an estimate, which the National Assembly has the final constitutional powers to determine its final content.
Presenting what he described as “Budget of Economic Recovery and Growth Plan,” the president said that the 2017 Budget was based on a benchmark crude oil price of $42.5 per barrel; an oil production estimate of 2.2 million barrels per day; and an average exchange rate of N305 to the US dollar.
He said that based on these assumptions, aggregate revenue available to fund the federal budget is N4.94 trillion, noting that this was 28 per cent higher than 2016 fiscal year projections.
He said that oil was projected to contribute N1.985 trillion of this amount. Further details of the budget include: Statutory transfers of N419.02 billion; Debt service of N1.66 trillion; Sinking fund of N177.46 billion to retire certain maturing bonds; Nondebt recurrent expenditure of N2.98 trillion; Capital expenditure of N2.24 trillion (including capital in Statutory Transfers) and Personnel costs at about N1.8 trillion.
Buhari said that the deficit of N2.36 trillion for 2017, which is about 2.18 per cent of GDP, would be financed mainly by borrowing which is projected to be about N2.32 trillion.
According to him, government’s intention is to source N1.067 trillion or about 46% of the borrowing from external sources while N1.254 trillion will be borrowed from the domestic market.
On Statutory Transfers, Buhari noted that the Executive had increased the budgetary allocation to the Judiciary from N70 billion in 2016 to N100 billion, adding that increase in funding was meant to enhance the independence of the judiciary and enable it to perform its functions effectively.
On Recurrent Expenditure, he explained that a significant portion of recurrent expenditure had been provided for the payment of salaries and overheads in institutions that provide critical public services.
The budgeted amounts for these items are: N482.37 billion for the Ministry of Interior; N398.01 billion for Ministry of Education; N325.87 billion for Ministry of Defence; and N252.87 billion for Ministry of Health.
He said key capital spending provisions in the Budget included Power, Works and Housing, N529 billion; Transportation, N262 billion; Special Intervention Programmes, N150 billion; Defence, N140 billion; Water Resources, N85 billion and Industry, Trade and Investment, N81 billion.
Others are Interior, N63 billion; Education, N50 billion; Universal Basic Education Commission, N92 billion; Health, N51 billion; Federal Capital Territory, N37 billion; Niger Delta Ministry, N33 billion and Niger Delta Development Commission, N61 billion.
He said N100 billion had been provided in the Special Intervention Programme as seed money into the N1 trillion Family Homes Fund that would underpin a new social housing programme.
He reassured that his administration would continue to eliminate all non-essential costs to free resources to fund capital expenditure. He said the size of the 2017 capital budget of N2.24 trillion (inclusive of capital in Statutory Transfers), or 30.7 per cent of the total budget, reflected his administration’s determination to spur economic growth.
“These capital provisions are targeted at priority sectors and projects. Specifically, we have maintained substantially higher allocations for infrastructural projects which will have a multiplier effect on productivity, employment and also promote private sector investments into the country,” he said.
The president said this substantial expenditure is expected to stimulate construction activity throughout the country. “Efforts to fast-track the modernisation of our railway system will receive further boost through the allocation of N 213.14 billion as counterpart funding for the Lagos-Kano, Calabar-Lagos, Ajaokuta-Itakpe-Warri railway, and Kaduna-Abuja railway projects.
“In 2016, we invested a lot of time ensuring the paper work is done properly while negotiating the best deal for Nigeria.This took longer than expected, but I am optimistic that these projects will commence in 2017 for all to see,” Buhari assured.
He also said that the 2017 budget retained the allocation of N500 billion to the Special Intervention programme consisting of the Home-grown School Feeding Programme, Government Economic Empowerment programme and N-Power Job Creation Programme.
This, he said, was to provide loans for traders and artisans, Conditional Cash Transfers (CCT) to the poorest families and the new Family Homes Fund, a social housing scheme.
Buhari noted that the Federal Government has implemented about N3.58 trillion out of the N6.08 trillion budgeted for 2016. He said that the implementation of the 2016 Budget was hampered by the low oil prices in the first quarter of 2016, and disruptions in crude oil production, which led to significant shortfalls in projected revenue.
He said this also negatively affected revenue collection by the Federal Inland Revenue Service and the Nigerian Customs Service. “As at September 30, 2016, aggregate revenue in-flow was N2.17 trillion or 25 per cent less than prorated projections. “Similarly, N3.58 trillion had been spent by the same date on both recurrent and capital expenditure.
“This is equivalent to 79 per cent of the prorated full year expenditure estimate of N4.54 trillion as at the end of September 2016. Buhari said that in spite of revenue shortfalls, the amount of N753.6 billion had so far been released for capital expenditure as at the end of October 2016.
In his welcome address, Saraki made it clear that budget is only an estimate, which the National Assembly has the final constitutional powers to determine its final content.
He called on the executive arm of government to work towards ensuring that the 2017 budget truly eased the burden of Nigerians. The President of the Senate said that it was an obvious fact that Nigerians were presently experiencing economic hardship.
According to him, the 8th National Assembly would work with the executive to ensure that it tackled the present economic recession by passing the 11 economic reform laws alongside the 2017 budget.
Saraki said: “Our people must see that the singular pre-occupation of government is the search for solution to the current economic hardship; and the commitment to ease their burden.
“They don’t want to know what political parties we belong, what language we speak or how we worship God. They have trusted their fate into our hands, and they need us now more than ever, to justify the trust that they have reposed on us.
“The people of Nigeria will pardon us if we do some things wrong. But they will not forgive us if we do nothing. And that is why, Mr. President, the two chambers have taken a position that whatever may be our differences, or opinions on issues of the economy, we will all work with one common purpose for this reason.
“The National Assembly on its part listed and prioritised 11 economic reform bills for passage.
We intend to get these bills ready alongside the 2017 Appropriation bill. We believe that the core elements of these bills will aid the Executive in mobilising the required private capital into the general economy, but especially the infrastructure market.”
On when the National Assembly would pass the budget, the Chairman of the Senate Committee on Appropriations, Danjuma Goje, said that the committee would come up with a timetable to that effect.
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