Power, Works, Housing Get Lion’s Share As PMB Presents N8.6trn 2018 Budget To NASS

* …As PMB Presents N8.6trn 2018 Budget To NASS 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”.]]>