By Henry Umoru, Emman Ovuakporie, Johnbosco Agbakwuru, Joseph Erunke & Kelechukwu Iruoma
ABUJA— PRESIDENT Muhammudu Buhari, yesterday, presented a budget proposal of N7.298 trillion for the 2017 fiscal year, envisaging a funding revenue of about N4.94 trillion.
Though the overall expenditure and revenue figure are 20.4 per cent and 28.1 per cent higher than N6.06 trillion and N3.855 trillion estimated for 2016, it indicated a conservative perspective to the recent surge of about 48 per cent in oil prices at the international market as well as over 45 per cent rise in tax and other revenues to the Federation Account in 2016 fiscal year.
Addressing a joint session of the National Assembly, yesterday, President Buhari, who arrived the House of Representatives Chambers clad in white Babaringa with a white cap to match, said that the 2017 budget was based on a crude oil benchmark price of $42.50 per barrel, with an output of 2.2 million barrels per day.
Crude oil prices hit a high of $58 per barrel earlier this week, while oil production at November level of 1.9 barrels per day is said to be returning to high levels significantly above benchmark.
Buhari, who addressed the lawmakers from 2.20 to 3.15pm, said the budget was tagged, budget of recovery and growth, just as he said that it was predicated on parameters of exchange rate of N305 to a US dollar as against N290 to a US dollar earlier proposed in the 2017-2019 Medium Term Expenditure Frame work (MTEF) forwarded to both chambers of the National Assembly for approval in October this year.
He said the budget provides for improved business environment, governance as well as security of lives and property and that government’s expenditure would be funded with the sum of N4.94 trillion, while oil would contribute N1.98 trillion of the amount, and non oil revenues, largely comprising Companies Income Tax, Value Added Tax, Customs and Excise duties, and Federation Account levies are estimated to contribute N1.373 trillion.
President Buhari noted that the deficit of N3.63 trillion, which represents 2.2% of GDP, is to be financed through borrowing the sum of N2.23 trillion and of this sum, N1.7 trillion would be from external borrowing while N1.254 trillion would be sourced domestically.
Breakdown of the budget proposals shows that N419.02 billion was allocated for statutory transfers; N1.66 trillion for debt servicing, while N177.46 billion was set aside as Sinking Fund.
Others are N2.98 trillion for non debt re-current expenditure; N2.24 trillion for capital expenditure.
He said: “We have set a more realistic projection of N807.57 billion for Independent Revenues, while we have projected receipts of N565.1 billion from various Recoveries. Other revenue sources, including mining, amount to N210.9 billion.”
He said that key capital spending provisions would be on power, works and housing, which explains why the ministry was allocated the highest amount of N529 billion, followed by transport with N262 billion; social intervention got N150 billion, Defence got N140 billion, while judiciary got an increased allocation of N100 billion from the N70 billion it got in the 2016 budget.
In the budget, education got N50 billion, while Universal Basic Education got a direct allocation of N92 billion while the sum of N51 billion was also allocated to health and Ministry of Interior, N150 billion.
But in the votes for recurrent expenditure, the Ministry of Interior has the largest allocation of N482.7billion, followed by the Ministry of Education which has N390billion, Defence N325billion, Health N252billion.
According to him, as at September 20, 2016, the aggregate revenue inflow was N2.17 trillion or 25% less than pro-rated projections, just as he said that N3.58 trillion had been spent by the same date on both recurrent and capital expenditure which is an equivalent of 79% of the pro-rated full year expenditure estimate of N4.54 trillion as at the end of September 2016. Buhari added that despite these challenges, the government met both its debt service obligations and personnel costs and that overhead costs have been largely covered.
He said: “Although capital expenditure suffered as a result of project formulation delays and revenue shortfalls, in the five months since the 2016 Budget was passed, the amount of N753.6 billion has been released for capital expenditure as at the end of October 2016. It is important to note that this is one of the highest capital releases recorded in the nation’s recent history. In fact, it exceeds the aggregate capital expenditure budget for 2015.