FG gives breakdown, to finance deficit with N1.6trn loan

…Ministries with lion’s shares:
…Power, Works & Housing – N715bn .Interior- N577bn .Defence- N576bn .Education- N542bn .Health- N356bn
The Federal Government has said that it will borrow N1.643 trillion to finance the shortfall in the N9.12 trillion 2018 Budget, adding that the projected deficit is within threshold stipulated in the Fiscal Responsibility Act (FRA) 2007.

Minister of Budget and National Planning, Senator Udo Udoma, disclosed this on Thursday while giving breakdown of the budget details in Abuja.

The budget, which was signed into law on Wednesday by President Muhammadu Buhari, provides for aggregate expenditure of N9.12 trillion, which is 22.6% higher than the last year’s appropriation.

Udoma said that the budget deficit is to be financed mainly by borrowing N793 billion from domestic sources and N849 billion from foreign sources.

He did not mention either of the sources where the loans would be sourced from, but noted that a total of N306 billion is expected from privatisation and N5 billion from sale of government property to partly finance the deficit.

Udoma said, “We have grown the size of the budget from 4.7 percent in 2015 to 5.9 percent in 2016, 6.7 percent in 2017 and 8 percent in 2018. This is very low compared with South Africa (20.7%) and Ghana (19.2%) as at 2015)”.

The Minister also noted that the ratio of capital spending in total budget increased from 12 percent in 2015 to 30 percent in 2016, 32 percent in 2017 and 32 percent in 2018.

Ministries that have the highest allocation both capital and current expenditures are: Federal Ministry of Power, Works and Housing – N715 billion, Ministry of Interior – N577 billion, Defence – N576 billion, Education – N542 billion and Health – N356 billion.

From N520 billion Statutory Transfer, Niger Delta Development Commission (NDDC) got N115.86 billion, National Judicial Council – N110 billion, Universal Basic Education (UBEC) – N109 billion, Independent National Electoral Commission (INEC) got N45.5 billion, National Assembly – N39.5billion, Public Complaint Commission – N7.48 billion while the National Human Rights Commission received N3.01 billion.

Udoma said that the government plans to continue to spend more on ongoing infrastructure projects that have potentials for job creation and inclusive growth, saying “we will continue to leverage private capital and counterpart funding for the delivery of infrastructure projects.”

He said as with 2016 and 2017 budgets, the 2018 budget has been prepared on the Zero Based Budget (ZBB) Principles.

He said that the government would deploy new technology to improve revenue collection and improve its own enterprise – GOEs’ revenue performance by reviewing their operational efficiency and cost-to-income ratios and generally ensuring they operate in more fiscally responsible manner.

The Minister listed some key projects and initiatives to include: agriculture, defence, education, health, housing, mines and steel development, Niger Delta, power, transport, water resources, and works.

Projects under agriculture and rural development are to cost: N4.2 billion for rural roads and water sanitation programme, over N25.1 billion for promotion and development of value chain across more than 30 different commodities.

Others are N5.30 billion for National Grazing Reserve Development, N3.53 billion for Agricbusiness and market development, N4.08 billion for food and strategic reserves, N2 billion for supply installation and commissioning of water rigs nationwide, N1.13 billion for youths in Agricbusiness.

Others include N2 billion for livelihood improvement family enterprise (LIFE) programme as well as N22.1 billion for veterinary and pest control services and N1.56 billion for extension services.

Transport has N162.28 billion counterpart funding for railway projects including Lagos-Kano, Calabar-Lagos, Ajaokuta-Itakpe-Aladja (Warri), Port Harcourt-Maiduguri, Kano-Katsina-Jibiya-Maradi in Niger Republic.

Regional interventions also has N65 billion for reintegration of transformed ex-militants under the Presidential Amnesty Programme, and N45 billion for federal initiative for North East (pilot counterpart funding contribution).

Also SDGs got N11.3 billion for intervention programmes, and N36.4 billion for other SDGs projects.

A total of N500 billion is set aside for the Federal Government special intervention programme including the home grown school feeding programme, government economic empowerment programme, N-Power job creation programme and the conditional cash transfer.

Special economic zone project under the Ministry of Industry, Trade and Investment got N44.2 billion for ongoing and planned special economic zone project across the geopolitical zones to drive manufacturing export amongst other areas.

The 2018 Budget proposal seeks to continue the reflationary policies of the 2016 and 2017 Budgets which helped put the economy back on the path of growth, the minister said.

Earlier in his remarks, the Director General of Budget Office, Ben Akabueze, said that the Buhari administration placed greater emphasis on explaining the inflows and outflows of funds.

Akabueze added that “we have attempted to make this year’s Citizens Guide to the 2018 budget more user-friendly by using easy -to -read charts and inforgraphics”.

He therefore, urged citizens to participate in the implementation of the budget.