Buhari presents N8.612tr 2018 budget estimates to National Assembly …Benchmarks crude oil sale at $45pb
President Muhammadu Buhari Tuesday in Abuja, presented the Federal Government’s budget proposal of N8.612 trillion to a joint session of the National Assembly comprising the Senate and House of Representatives, which it tagged budget of consolidation, in which it benchmarks crude oil price at$45 per barrel.
This represents about 30 per cent increase when compared to the N7.4 trillion figures budgeted for 2017.
Recall that there were apprehensions that the legislators were poised for a show down with the President and might use the occasion of the budget presentation to embarrass him over what they termed the poor implementation of the 2017 budget, which the executive arm of government plans to implement only to the tune of 40 per cent.
Details show that while, the government is projecting a total expenditure of N8.612, it projects a total of N6.607 trillion actual incomes, which amounts to N2.6 trillion deficits, which would be financed partly by new borrowings estimated at N1.699 trillion, out of which 50 per cent will be sourced from external sources while the balance will be sourced locally.
Similarly, the N306 billion balance of the deficit is expected to be financed from proceeds of privatisation of some non-oil assets by the Bureau of Public Enterprises BPE.
However the President of Senate, Dr. Bukola Saraki and Speaker of House of Representatives, Yakubu Dogara have warned that the National Assembly would no longer tolerate selective budget implementation as is being experienced with the 2017 budget.
Other details of the budget estimate show that in addition to benchmarking crude oil price at $45 per barrel; the government is projecting an oil production output of 2.3 million barrels per day, including condensates; an exchange rate of N305 to the United States dollar, a real Gross Domestic Product GDP growth of 3.5 per cent and an inflation rate of 12.4 per cent over the next one year.
President Buhari told the legislators that in line with the government’s drive towards diversification of its revenue base, non-oil revenues will account for a larger share of total revenues, thus projecting oil revenues of N2.442 trillion and non-oil as well as other revenue amounting to N4.165 trillion.
He said: “The 2018 budget proposals are for a budget of consolidation. Our principal objective will be to reinforce and build on our recent accomplishments. Specifically, we will sustain the reflationary policies of our past two budgets. In this regard, the key parameters and assumptions for the 2018 budget are as set out in the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP)”.
“Based on the above fiscal assumptions and parameters, total federally-collectible revenue for 2018 is estimated at N11.983 trillion. Thus, the three tiers of government shall receive about 12 per cent more revenues in 2018 than the 2017 estimate”
On the other hand, the government is projecting a total expenditure of N8.612 trillion, which represents a marginal increase of 16 per cent above the 2017 budget figures estimate.
The government is also projecting a 30.8 per cent (or N2.652 trillion) of aggregate expenditure, inclusive of capital in statutory transfers) has been allocated to capital budget.
“We expect our fiscal operations to result in a deficit of N2.005 trillion or 1.77 per cent of GDP. This reduction is in line with our plans under the Economic Recovery and Growth Plan ERGP, to progressively reduce deficit and borrowings”, the President said
According to him, the proposed N8.612 trillion for 2018 aggregate expenditure will comprise recurrent expenditure of N3.494 trillion, debt servicing of N2.014 trillion and statutory transfers of about N456 billion;
Others include Sinking Fund of N220 billion, part of which is to retire maturing bond to Local Contractors,, capital expenditure of N2.428 trillion, which excludes the capital component of statutory transfers, among others.
While reviewing the performance of the economy so far, the President noted that despite the downturn in oil prices and the nation’s challenging economic circumstances, his administration has been able to invest an unprecedented sum of over N1.2 trillion in capital projects through the 2016 Budget.
This, according to him, is the highest ever in the history of the country, which he further argued is a clear demonstration of the administration’s commitment to consolidate on its economic diversification reforms and lay a stronger foundation for future growth and development.
He also said: “Our Sovereign Wealth Fund, which was established in 2011 with $1 billion, did not receive additional investment for 4 years when oil prices were as high as US$120 per barrel. However, despite record low oil prices, this administration was able to invest an additional $500 million into the fund. This further demonstrates that in our struggle to have a stable and secure nation today, we have not, and will not; lose sight of the need to lay a solid foundation for the future prosperity of successive generations.
“We have asked the Sovereign Wealth Fund to look inwards and invest locally. Some of the successes we are seeing today in the agricultural sector are driven by this new investment approach by the Nigeria Sovereign Investment Authority NSIA. The NSIA also has a very strong pipeline of local investments that will support our inclusive and diversified economic growth plan”.