By Emeka Anaeto, Business Editor & Emma Uah, Abuja Bureau Chief
There were indications that the 2017 budget passed last week by the National Assembly will run into the first half of 2018, the third consecutive time the budget year would be spilling over two fiscal years.
Recall that 2015 budget spilled over into 2016 forcing the government to begin implementation even before the Appropriation Bill was passed into law and ahead of the Presidential assent.
Similarly, that of 2016 budget was run officially up till May, 05, 2017 when it formally expired and closed, and to avoid grounding the wheels of governance, the Federal Government had to resort to the provisional 25 per cent recurrent expenditure allocations in the 2017 budget ahead of its passage by the National Assembly and Presidential assent.
But a senior official at the Finance Ministry told Vanguard that the ministry is already working on a template that is aimed at ending such spill-overs in the 2018 budget, indicating that next year would witness two budgets running side-by-side.
Speaking at the backdrop of complaints from the private sector on the level of implementation that the 2017 budget would achieve given that the year is half gone, the Finance Ministry source explained that while the current budget (2017) will run its full course into half of 2018, depending on when Presidential assent is received, the budgetory process would be re-jigged for 2018 budget to redress the abnormally.
Already, he hinted that the relevant ministry (Budget and Planning) and departments have been directed to begin work on the said process re-jigging.
But he also expressed discomfort with the National Assembly’s role in the process describing it is political and a major concern in the ministry.
Meanwhile, there were indications that contrary to the impression in public perception, the 2017 budget as passed by the National Assembly did not have any major disagreement with the executive positions, as feelers in the executive arm indicated some level of gentleman understanding with the legislature to effect some changes in the figures.
Vanguard learnt that the N144 billion additional vote provided by the National Assembly, which represented about 2.0 per cent mark up on the original figure submitted by the President Mohammadu Buhari in December last year were to provide for some issues omitted by the executive while addressing some political grievances.
A source in the Finance Ministry told Vanguard, however, that the additional N10 billion for the National Assembly was a trade off for those additional money the executive requested for during the budget scrutiny at the Committee level.
Consequently, it was agreed between the two arms of government to provide the funding for the additional money through mark up in oil price benchmark to USD44.5, up from USD42.5 presented by President Buhari.
The Finance Ministry official who did not see any issue in the additional provisions said they expect the budget to be assented to by the Acting President, Prof Yemi Osinbajo, immediately it is received from the National Assembly.
In his words: “There is no need for any controversy in the budget document as it was getting too far into the year. We believe the adjustment by the National Assembly is not so significant to warrant any further delay.
How FG’s 2017 budget compares with 2016 budget
Though the 2017 Budget of N7.44 trillion as passed by the National Assembly is about N1.381 trillion above the 2016 budget of the federal government, when inflation is factored in the real margin is about 3.0 per cent.
The revenue projection N4.94 trillion in the current budget was about N1. 09 trillion above the 2016 estimated revenue of N3.855 trillion. Again, this increased figure was mainly due to higher exchange rate as 2017 was based on N305/USD as against N199/USD in 2016 budget.
Recurrent (non-debt) increased from N2.646 trillion in 2016 to N2.990 trillion in the current budget; Capital budget was raised from last year’s figure of N1,587 trillion to N2.174trn; Debt service rose from N1,475 trillion to N 1.841trn.
Oil benchmark was increase d from last year’s $ 38 pbl to $ 44.50 pbl; while the government was rather cautious in its expectations on oil output which was left at the same level of 2.2 million bpd.
Official exchange rate was raised from 2016 level of N197/$1 to N380/$1.
Among the Ministries, Interior had the highest allocation of N 536.358 billionwhich was a marginal increase from last year’s N513.65 billion.
Power, Works and Housing budget followed with an increase from 2016 figure of N456.93 billion to the current N586.53 billion
Defence budget was third in that order, increasing from last year’s N443.07 to N469.838 in the 2017 budget.
Onyekpere faults heavy debt servicing
…warns debt profile becoming unsustainable
Meanwhile, the Lead Director of the Centre for Social Justice, Mr. Eze Onyekpere, has warned that the nation’s debt profile was becoming unsustainable.
He frowned at the provision of N1.840 about 24.73 per cent of the entire budget for debt servicing.
His words, “The Dedicating 24.73 percent of the overall budget to debt service is an indication that Nigeria’s debt profile is becoming unsustainable.
“The capital vote of 29.30 percent is just a little higher than debt service. With a deficit financing of 2.35 trillion, the debt service is about 36 percent of our expected revenue. This shows that we may soon be back to the debt situation pre the debt relief period.”