…As PMB Presents N8.6trn 2018 Budget To NASS
BY AHURAKA ISAH, SOLOMON AYADO, Kauthar Anumba-Khaleel and Adebiyi Adedapo, Abuja
President Muhammadu Buhari yesterday presented budget estimates of N8.612 trillion for the 2018 fiscal year to a joint session of the National Assembly.
Buhari listed key capital spending allocations in the 2018 budget, with Power, Works and Housing getting the lion’s share of N555.88 billion.
Transportation is to get N263.10 billion, while Special Intervention Programmes will get N150.00 billion.
Others are Defence, N145.00 billion; Agriculture and Rural Development; N118.98 billion; Water Resources, N95.11 billion; Industry, Trade and Investment, N82.92 billion; Interior, N63.26 billion and Education, N61.73 billion
Buhari noted that the Universal Basic Education Commission will take N109.06 billion, Health will get N71.11 billion, and the Federal Capital Territory is to get N40.30 billion, while Zonal Intervention Projects will get N100.00 billion.
Also in the 2018 budget proposal, the North East Intervention Fund has been allocated N45.00 billion, just as the Niger Delta Ministry gets N53.89 billion, while the Niger Delta Development Commission gets N71.20 billion.
The president told the lawmakers that the 2018 budget is premised on assumptions and parameters to include oil benchmark of $45 per barrel, oil production estimate of 2.3 million barrels per day, exchange rate of N305/$ for 2018, Real GDP growth of 3.5 per cent and inflation rate of 12.4 per cent.
He also expressed belief that 2018 will be a year of better outcomes by all accounts.
Speaking during the budget presentation at the Green Chamber of the National Assembly complex, Buhari noted that the proposed N8.612 trillion of 2018 aggregate expenditure comprises recurrent costs of N3.494 trillion, debt service of N2.014 trillion, statutory transfers of about N456 billion and Sinking Fund of N220 billion (to retire maturing bond to local contractors); as well as capital expenditure of n2.652 trillion which is 30.8% of the entire budget.
On revenues, Buhari said“The total federally-collectible revenue is estimated at N11.983 trillion Naira in 2018. Thus, the three tiers of Government shall receive about 12 percent more revenues in 2018 than the 2017 estimate.
“Of the amount, the sum of 6.387 trillion Naira is expected to be realised from oil and gas sources. Total receipts from the non-oil sector are projected at N5.597 trillion Naira”.
He, however, disclosed that federal government’s estimated total revenue is N6.607 trillion naira in 2018, which is about 30 per cent more than the 2017 target.
“As we pursue our goal of revenue diversification, non-oil revenues will become a larger share of total revenues”, Buhari assured, just as he further disclosed that in 2018, the federal government expects to generate N2.442 trillion as revenue from the oil sector, while it expects N4.165 from non-oil as well as other revenues.
He listed the non-oil and other revenue sources of N4.165trillion to include several items like Share of Companies Income Tax (CIT) of N794.7 billion, share of Value Added Tax (VAT) of N207.9 billion, Customs & Excise Receipts of N324.9 billion, FGN Independently Generated Revenues (IGR) of N847.9 billion, FGN’s Share of Tax Amnesty Income of N87.8 billion and various recoveries of N512.4 billion, N710 billion as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of N678.4 billion.
“It is expected that our fiscal operations will result in a deficit of 2.005 trillion Naira or 1.77 percent of GDP.
“This reduction is in line with our plans under the ERGP to progressively reduce deficit and borrowings” he noted.
On how to finance the budget, Buhari said, “We plan to finance the deficit partly by new borrowings estimated at N1.699 trillion Naira. Fifty percent of this borrowing will be sourced externally, whilst the balance will be sourced domestically”.
The president also provided explanations on how his government intends to manage the nation’s debt.
His words: “We are closely monitoring our debt service to revenue ratio. We shall address this ratio through our non-oil revenue-generation drive and restructuring of the existing debt portfolio. Presently, domestic debt accounts for about 79 percent of the total debt.
“Our medium-term strategy is to reduce the proportion of our domestic debt to 60% by the end of 2019 and increase external debt to 40 percent. It is noteworthy that rebalancing our debt portfolio will enhance private sector access to domestic credit.
“In addition, annual debt service costs will reduce as external debts are serviced at lower rates and repaid over a longer period than domestic debt”.
2018 Budget Implementation Will Define This Administration – Saraki
Senate President Bukola Saraki yesterday told President Buhari that the ball was on his court in respect of the 2018 budget implementation, saying the outcome will be the defining element of his administration.
Saraki urged the president to employ greater policy coordination, reform prioritisation as well as passed economic bills to implement the 2018 budget more than before in order to record high percentage of success.
He also implored President Buhari to plug leakages in federal government’s revenue generating agencies, which he said have over N40 trillion accruable to the consolidated federation account.
According to the Senate president, it is worrisome that these agencies are just remitting N400 billion as revenue to the consolidated federation account.
He observed that the executive has no use forwarding deficit budget bill or even planning to borrow to finance the nation’s budget.
Saraki said, “It is pertinent to note that the implementation of the 2018 Budget – how it is implemented – will be a defining element of this Administration. We must therefore continue to work together to steady the ship of this recovery.
“Revenue from taxes as well as independent revenues from State Owned Enterprises must be taken seriously. If the budget is to be funded, we cannot afford to turn a blind eye to revenue under-performance.
“While there is a need to review extant laws guiding the operation of some Government enterprises, I would urge for more determined effort on the part of the Executive, to plug leakages. This sector alone accounts for over 40 trillion naira in valuation, of which less than 400 billion naira is remitted as revenue to the Consolidated Federation Account.
“This is not acceptable. We need to vigorously address this area”. While Saraki expressed joy for President Buhari’s healthy and rejuvenated or good physical shape, he added that his recovery coincided with country’s economic recovery.
Saraki thanked members of the National Assembly for putting the country first and resisting the urge to play politics, while President Buhari was away in London on medical vacation.
He described as a welcome development the presentation of the 2018 budget before December, even as he commended the executive on the exit of Nigeria from recession.
He continued: Without doubt, this recovery benefitted from greater policy coordination, reform prioritization and passage of economic bills, but more importantly, the resilience of the Nigerian people.
“As the country gradually recovers, it is important to reset the fundamentals that drive our economy – so we do not slide back into recession. We must reassess the relationship between oil and our economy.
“Oil prices are gradually inching up, but that is no reason for complacency in our diversification drive. We must grow our economy away from oil – as well as the need to increase non-oil revenue generation and collection”.
Saraki further urged the president to direct federal government parastatals and agencies to submit their budgets along the 2018 budget, just as he asked him to punish those agencies that fail to do so by denying them access to capital expenditure unless the budget is passed.
He added: “Further to the area of increasing independent revenue, there is the need to review agreements that government has signed with some private sector service providers. Many of these agreements are biased, and clearly, not in the interest of the country.
“We appreciate the need to spend, Mr. President. However, we must ensure that our borrowing is targeted at productive projects that will stimulate the economy. We must ensure real value-for-money in projects funded by borrowing, and make doubly sure that the projects are not overpriced.
“To ensure consistency in government’s economic programmes and tax policies, we will be requiring that the submission of the 2018 Budget – and budget submissions going forward – be accompanied by a Finance Bill.
‘’This bill – which should clearly detail the imposition, alteration or regulation of taxes such as the proposed tax on luxury items and excise taxes, among others – will put the financial proposals of government into effect”
Speaking on the plight of Nigerians, Saraki said, “As we are all aware, many businesses were adversely affected by the recession; many lost their means of livelihood. As the country emerges from that period of uncertainty, the question on the lips of many Nigerians has been this: How does the recovery translate into tangible economic benefits for me?
“We must remember that the real gains must be felt on a personal level by the individual, for economic recovery to have meaning. People are seeking to get back to work but cannot find jobs. Entrepreneurs want to restart their businesses but are finding it difficult to access the needed capital. As for our farmers, the last thing they want is for produce to go to waste because people cannot afford to buy.
“Looking around today, we see that many of our undergraduates are apprehensive about their graduation day; and our National Youth Corps members are not looking forward to the end of the service year, for fear of being tagged ‘unemployed”.
Don’t Dump 2017 Budget, Dogara Tells FG
On his part, Speaker of the House of Representatives, Yakubu Dogara, called on the executive arm of government to press on with its efforts at implementing 2017 budget, saying its fiscal targets must be enforced and the provisions complied with as approved by the National Assembly.
Dogara also expressed hope that the passage of the 2018 budget does not suffer delays that may be occasioned by inadequate consultations between Ministries, Departments and Agencies (MDAs) and over-sighting committees of the National Assembly.
In his remarks during the presentation of the 2018 budget estimates by President Buhari at the National Assembly, the Speaker also called for policy consistency for a more sustainable economic growth.
He said, “Mr. President, as legislators, what agitates us is the prospects of totally abandoning the 2017 Budget and the dire consequences of doing so. The questions that must be answered include whether we have effectively enforced 2017 fiscal targets and whether managers have complied with the budget as authorized by the legislature.
“Our experience with the implementation of the 2016 Budget amply demonstrates that obeying our Appropriation Laws maximizes the release of our potentials while violating the Appropriation Laws caps the release of our national potentials.
“This means that we have to redouble our efforts in implementing the 2017 Budget, if we must retire it in January or at the very least rollover most of the projects in 2017 budget to 2018. No need to remind us that fiscal indiscipline is as grievous as corruption which this government is busy eliminating”.
On the preparation of the budget, Dogara said, “Once again, let me place it on record that the 2018 Budget preparations suffer from inadequate consultations between the MDAS and various over- sighting Committees of the National Assembly.
“Consequently, one can only hope and pray that it does not lead to delay in consideration and passage of the Budget”.
He also lauded President Buhari for executing the 2016 budget in line with the provisions of section 318 of the constitution, which requires the budget to last for 12 months.
According to him, this helped the executive to report an accomplishment of over N5 trillion expenditure out of the N7.4 trillion budgeted for 2016, an unprecedented record by all standards, made possible only because the execution of the budget was allowed to last for 12 months.
“That is what the National Assembly has always called for in line with the original intent of the framers of our constitution”, he added.
Speaking further, Dogara asserted that there is no national challenge that Nigeria cannot overcome if the executive and legislature work together, noting that failure to do so only hinders progress.
While commending lawmakers for displaying true leadership qualities, patriotism and a sense of national purpose by providing a peaceful environment for President Buhari to deliver his budget address, amidst a hazy relationship between the two arms, Dogara also acknowledged the newly appointed Secretary to the Government of the Federation, Mr. Boss Mustapha, for visiting the leadership of both Houses of the National Assembly to canvass support for government policies and to strengthen the often “strained Executive-Legislative relations”.
He continued: “This is the way we must go as our constitutional order is organed in a way that deliberately denies any of the three arms the strength to go at it alone on any major national issue. Where that has happened, it’s progress that suffers. That reminds us of the adage that says, ‘If you want to go fast, go alone but if you want to go far, go together.
“Examples abound on how fast but not far, the Executive have gone on some national issues where they have decided to go alone. There is no national challenge we cannot overcome if we work together”.
Meanwhile, experts have said the implementation of the budget budget vis-a-vis delivering on the nation’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020 will be dependent on key factors.
Some of them who expressed their views on the 2018 appropriation bill said President Buhari would need to bring on board real technocrats who share his vision in the key sectors of the economy to realise his plan for the 2018 fiscal year.
They raised the concern that some of the appointees in the president’s cabinet lack the capacity to successfully implement the budget.
An economic expert, Dr. Tayo Bello, said, “My fear is that the President does not have energetic, dynamic and capable cabinet that can drive implementation of this budget.
“If he (Buhari) refuses to change or reshuffle his cabinet, what happened to previous budgets of this administration will happen to this one; I can assure you”.
Beyond that, Dr. Bello also expressed concern that some politicians in the administration would possibly divert a considerable part of the budget to fund the 2019 political campaigns, thereby creating doubt about proper implementation of the budget.
Although they expressed pessimism that the proposed budget will not make significant impact, the experts urged the federal government to give paramount attention to infrastructure development, especially road construction and power (particularly renewable energy) in 2018.
The experts said the monetary authorities still need to make clarity in foreign-exchange policy, fiscal policy and incentives for investors to attract the needed investments.