N8.612trn Budget: Power, Agric, Education get lion’s share

President Muhammadu Buhari on Tuesday presented a budget estimate of N8.612 trillion for the 2018 fiscal year.

The president, who presented the budget to the joint session of the National assembly in Abuja, predicated it on N2.005 trillion deficit, which he said, would be financed by a foreign loan of N1.699trn.

The 2018 budget represents an increase of 16 per cent above the N7.45trn budgeted in the outgoing year, 2017.

Buhari, in his presentation, said that the budget would be predicated on an oil benchmark of $45 per barrel, with oil projection of 2.3million bp/d.

The president said that 50 per cent of the borrowing would be sourced externally, while the balance would be sourced domestically.

He said also that the balance of the deficit of N306bn would be financed from proceeds of privatisation of some non-oil assets by the Bureau of Public Enterprises (BPE).

The 2018 budget is also to run on an exchange rate at N305 to one US dollar‎ and GDP to growth ratio of 3.5 per cent.

According to the President, the total expenditure for the budget in the next year’s fiscal year stands at N2.652trn, representing 30.8 per cent of aggregate expenditure, which includes capital in Statutory Transfers.

The President, while presenting the budget, tagged: “The Budget of Consolidation,” the highest since Nigeria returned to democratic rule, was optimistic of its quick passage by the national Assembly.

The Daily Times recalls that the 2017 budget was tagged: ‘Budget of Growth and Economic Recovery.’

A breakdown of the 2018 Appropriation Bill indicates that recurrent expenditure stands at N3.494trn; while the sum of N2.014trn would be set aside for debt servicing.

However, Statutory Transfers stands at N456 bn, while sinking Fund of N220bn is earmarked for retiring maturing bond to local contractors.

President Buhari also proposed estimated total revenue of N6.607trn for the budget, 30 percent more than the 2017 target, promising that the non oil revenue would be larger than that expected from oil in 2018.

According to him, while the sum of N2.442trn will come from oil revenues, non-oil, as well as other revenues will fetch the government the sum of N4.165trn.

The president said based on the fiscal assumptions and parameters in the next year’s budget, total federally-collectible revenue is estimated at N11.983trn, indicating that in 2018, the three tiers of the government would receive about 12 percent more revenues than the 2017 estimate.

According to him, of the amount, the sum of N6.387trn is expected to be realised from oil and gas sources, just as total receipts from the non-oil sector are projected at N5.597trn.

He said the non-oil and other revenue sources of N4.165trn, include several items including: Share of Companies Income Tax (CIT) of N794.7bn, share of Value Added Tax (VAT) of N207.9bn, Customs & Excise Receipts of N324.9bn, FGN Independently Generated Revenues (IGR) of N847.9bn, FGN’s Share of Tax Amnesty Income of N87.8bn, and various recoveries of N512.4bn, N710bn as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of N678.4bn.

The government allocated 30.8 per cent of the 2018 Budget to capital expenditure, as the president said his government would demonstrate strong commitment to investing in critical infrastructure capable of spurring growth and creating jobs in the Nigerian economy.

Allocation of capital expenditure to Ministries and Departments, according to the President, include: Power, Works and Housing: N555.88 billion; Transportation: N263.10bn;

Special Intervention Programmes: N150.00bn;

Defence: N145.00bn; Agriculture and Rural Development N118.98bn; Water Resources: N95.11bn; Industry, Trade and Investment: N82.92bn; Interior: N63.26bn; Education N61.73bn; Universal Basic Education Commission: N109.06bn; Health: N71.11bn;

Federal Capital Territory: N40.30bn;

Zonal Intervention Projects N100.00bn;

North East Intervention Fund N45.00bn;

Niger Delta Ministry: N53.89bn; and

Niger Delta Development Commission: N71.20 bn.

Harping on the alternative source of revenue generation, Buhari expressed dismay on the low performance of the tax regime in Nigeria, noting that the country’s tax-to-GDP ratio stood about 6% one of the lowest in the world, just as he promised improvement in the next years fiscal plans.

To ensure such improvement, the president said his government has been stepping up efforts to ensure that all taxable Nigerians comply with the legal requirement to declare income from all sources and remit taxes due to the appropriate authorities.

He said, “We have introduced the Voluntary Assets and Income Declaration Scheme (VAIDS) on the 1st of July, 2017. The Scheme provides non-compliant taxpayers with a nine-month window to regularise their tax status relating to historical periods. In return, overdue interest and penalties will be forgiven.

“In addition, no investigations or criminal charges will be brought against participating taxpayers. We expect that this Scheme will widen the tax net for both the Federal and state governments. I am therefore, asking all Nigerians to seize this opportunity and do right thing. Let us not shy away from our duty to build a better Nigeria.

The president also promised to put more attention on development of infrastructure across the country, recalling that his government had started paying the backlog of debt owed contractors, which he said ran into trillions of naira, and would continue to do so.

Listing his achievements on infrastructure projects in the current fiscal year, Buhari said, “At the outset of this Administration in 2015, the Abuja Metro-Rail Project, which began in 2007, was only 50% completed, after 8 years. Today, in just 18 months, we have pushed the project to 98% completion. This was achieved as the Nigerian Government was diligently able to meet its counterpart funding obligations for the Chinese loans.”

He also said that, “We have also continued work on key strategic Roads. Over 766 kilometres of roads were constructed or rehabilitated across the country in 2017. For instance, work is at various stages of completion on these strategic roads with immense socio-economic benefits:

*Rehabilitation of Ilorin-Jebba-Mokwa-Birnin-Gwari-Kaduna Road;

Dualization of Oyo-Ogbomosho-Ilorin Road; Rehabilitation of Gombe-Numan-Yola Road; Dualization of Kano-Maiduguri Road; Rehabilitation of Sokoto-Tambuwal-Jega Road and Kotangora-Makera Road that transverse Sokoto, Kebbi and Niger States; Rehabilitation and Reconstruction of Enugu-Port-Harcourt Road; and Rehabilitation of Enugu-Onitsha Dual Carriageway Road.”

Others, according to the president, include, rehabilitation of Aleshi-Ugep Road and the Iyamoyun-Ugep Section in Cross River State; rehabilitation, reconstruction and Expansion of Lagos-Ibadan Dual Carriageway Road; construction of Loko-Oweto Bridge over River Benue in Nasarawa and Benue States; and construction Gokanni Bridge along Tegina-Mokwa-Jebba Road in Niger State.

On development of rail system, the president said his government has kick-started the abandoned Itakpe-Ajaokuta-Warri Rail Line, and recalled that it had been ongoing for over 17 years.

He said, “We had to take some drastic measures; but I am pleased to announce that work is ongoing; and we expect to commission this service by September 2018. This service will start with 7 standard gauge coaches.

“The situation at the Apapa Port complex is a top priority for this administration. The delays are due to congestion and their adverse impact on business operations and costs is a key concern to our government. We are partnering with the private sector to fix the road. We shall do the right thing considering. We will not cut corners.

“In addition to the road, we have also commenced the extension of the Lagos-Ibadan Standard Gauge Rail Line to connect Apapa and Tin Can Port Complexes. This project will significantly ease the congestion at the ports and enhance both export and import operations. This project shall be completed by December 2018. Already, working with the private sector, we have repaired the Apapa Port Narrow Gauge Line which is currently being used to evacuate goods from the port, thereby easing congestion.

Interestingly, both the leadership of the National Assembly, Senate President, Dr. Bukola Saraki and Speaker, House of Representatives, Hon. Yakubu Dogra have lauded the president for early presentation of the budget.

Saraki has commended Buhari for the presentation, vowing that the Senate would work with the House of Representatives, while making sacrifices to make the budget work this time.

He expressed delight that Nigeria was able to overcome the economic recession that gripped the country some months back just as he alluded to efforts by the National Assembly through economic reform bills as part the factors that aided the government to exit the recession.

But Saraki warned the government not to relent in setting parameters for consolidating of the national economy, while also resetting the fundamental parameters of the economy meant to stave off recession and prevent its return.

He emphasised the need for the government to focus attention on revenue from taxes as well as independent revenues from State Owned Enterprises adding, “If the budget is to be funded, we cannot afford to turn a blind eye to revenue under-performance.

Saraki also admonished the government of President Buhari to always ensure that borrowing to fund the 2018 budget is targeted at productive projects which according to him would stimulate the growth of the economy.

He said, “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”.

Dogara congratulates the president for leading Nigeria out of recession

In his own comment, Dogara also commended Buhari for early presentation of the budget. He said there is no national challenge that Nigeria cannot overcome if the executive and legislature work together.

The Speaker also commended members of the National Assembly for displaying true leadership qualities, patriotism and a sense of national purpose by providing a peaceful environment for the Buhari to deliver his budget address amidst a hazy relationship between the two arms.

Dogara spoke while delivering remarks at the occasion of the presentation of the 2018 Budget estimates by the president at the National Assembly.

He said the Constitution already makes it clear that the three arms of government must work hand in hand on any major national issue, adding that failure to do so would mean that progress suffers.

He said, “This is the way we must go as our Constitutional Order is organsed 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.

“To our colleagues, members of the Senate and House of Representatives, I salute your patriotism and sense of national purpose in providing the peaceful enabling environment for Mr. President to deliver his Budget Address.

“The success of this event separates us as true Leaders who in the midst of a hazy Executive – Legislative relationship elected not to turn on ourselves but to turn to each other in the very interest of our constituents and national progress.”

He, however, acknowledged that the newly appointed Secretary to the Government of the Federation, Mr. Boss Mustapha, who, in an unprecedented move, visited the leadership of both Houses of the National Assembly to canvass support for government policies and to strengthen the often strained Executive – Legislative relations.

Going further, he thanked the president for “competently and graciously fulfilling his constitutional obligation of presenting the estimates of receipts and expenditure proposed for the next financial year for the Federal Republic of Nigeria to the National Assembly”, the Vice President and his entire cabinet, particularly, the Hon. Minister of Budget and National Planning, Senator Udoma O. Udoma and the Honourable Minister of Finance, Mrs. Kemi Adeosun.

The Speaker also saluted all Heads of MDAS, Service Chiefs, leaders of political parties, most especially Chief John Oyegun, Chairman of the ruling party , APC, captains of industry, and distinguished elder statesmen and personalities present at the event.

He also commended the Clerk to the National Assembly, Mr. Ataba Sani-Omolori, and the entire bureaucracy of the National Assembly and all those that provided support services including the Media, Security agencies and other unseen hands for their contribution to making the event a success.

But Dogara has warned that the poor consultations with the National Assembly by Federal Ministries, Department and Agencies (MDAs) may lead to the delay of the 2018 Appropriation Bill.

Dogara declared that there was inadequate consultations between the MDAs and the various over- sighting committees of the National Assembly in preparing the 2018 budget, asserting that he hopes the poor consultations does not lead to delay in the consideration and passage of the budget.

The speaker however, commended Buhari for releasing over N5trn out of the former N7.4trn budgeted for 2016, saying that this was made possible because the execution of the budget was allowed to run 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.

“As legislators, what agitate us is the prospect 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 the 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 cap the release of our national potentials,” he stated.

The speaker therefore called for a redoubling of efforts by the executive in implementing the 2017 budget or alternatively rolling over majority of the projects in the 2017 budget to 2018.

According to Dogara, there is “no need to remind us that fiscal indiscipline is as grievous a problem as corruption which this government is busy eliminating.”

Furthermore, the speaker praised the Buhari’s administration for leading the country out of recession but cautioned that even though recession has technically ended, most Nigerian families are still struggling economically.

“As a government, we must do all within our powers to hasten their long night of panic and fear into a glorious morning. We must never allow this nation to slide into recession, not now, not ever again.

“We cannot, therefore, discountenance policy consistency and synergy between all stakeholders, if we must sustain economic growth and development, going forward.

“Mr. president, I urge that you take no prisoners in the implementation of your well crafted and thought-out economic recovery and growth plan, which you launched in January 2017,” he added.