President Muhammadu Buhari on Tuesday presented a N7.298 trillion 2017 budget before a joint session of the National Assembly, stating that the budget was designed to drive infrastructure, enhance growth and investment, boost local production and consumption and create jobs.
Buhari, who arrived the chamber of the House of Representatives at 1.59 p.m., said the budget comprised N2.98 trillion non-debt recurrent expenditure, capital expenditure of N2.24 trillion (including capital of statutory transfers) and a fiscal deficit of N2.36 trillion (about 2.18 per cent of gross domestic product (GDP).
He said the deficit would be financed mainly by projected borrowing of about N2.32 trillion, while N1.067 trillion or about 46 per cent of the borrowing would be sourced from external sources and N1.254 trillion to be borrowed from the domestic market.
Furthermore, he said the budget consisted of statutory transfers of N419.02 billion, allocation for debt service of N1.66 trillion and a sinking fund of N177.46 billion for the retirement of certain maturing bonds.
The president added: “Based on these assumptions, aggregate revenue available to fund the federal budget is N4.94 trillion. This is 28 per cent higher than 2016 full year projections.
“Oil is projected to contribute N1.985 trillion of this amount. Non-oil revenues, largely comprising company income tax, value added tax, Customs and Excise duties, and Federation Account levies, are estimated to contribute N1.373 trillion.
“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.
“With regards to expenditure, we have proposed a budget size of N7.298 trillion which is a nominal 20.4 per cent increase over 2016 estimates, of which 30.7 per cent of this expenditure will be capital, in line with our determination to reflate and pull the economy out of the current recession.
“Distinguished members of the National Assembly, the 2017 budget is based on a benchmark crude oil price of US$42.5 per barrel; oil production estimate of 2.2 million barrels per day; and an average exchange rate of N305 to the US dollar.”
Buhari, who said the budgetary allocation to the judiciary had been increased from N70 billion to N100 billion, added that the increase was meant to enhance the independence of the judiciary and simultaneously enable the judges to perform their functions effectively.
He gave the breakdown of recurrent expenditure to include N482.37 billion for the Ministry of Interior; N398.01 billion for Ministry of Education; N325.87 billion for Ministry of Defence; and N252.87 billion for Ministry of Health.
According to him, the government had decided to maintain the personnel cost of about N1.8 trillion in order to complete the work that had been started, which he said would include the elimination of all ghost workers from government payroll.
He pointed out that adequate provisions had been made in the budget to ensure that all civil service personnel who had not been enrolled on the Integrated Personnel Payroll Information System (IPPIS) platform were captured.
The president also informed his audience that the Efficiency Unit of the Federal Ministry of Finance had been mandated to cut certain overhead costs by 20 per cent in order to eliminate all non-essential costs and consequently free resources to fund the capital expenditure.
A breakdown of capital allocations to various sectors as presented by the president shows that the Ministry of Power, Works and Housing got the lion share of the budget with N529 billion. This was followed by the Ministry of Transportation with N262 billion.
Others are: Special Intervention Programme, N150 billion; Ministry of Defence, N140 billion; Ministry of Water Resources, N85 billion; Ministry of Industry, Trade and Investment, N81 billion; Ministry of Interior, N63 billion; Ministry of Education, N50 billion; Universal Basic Education Commission, N92 billion; Ministry of Health, N51 billion; Federal Capital Territory (FCT), N37 billion; Niger Delta Ministry, N33 billion; Niger Delta Development Commission, N61 billion; Presidential Amnesty Programme, N65 billion; and rehabilitation of the North-east, N45 billion.
The budget also includes N100 billion for Special Intervention Programme “as seed money into the N1 trillion Family Homes Fund that will underpin a new social housing programme”.
The president said: “This substantial expenditure is expected to stimulate construction activity throughout the country.”
He said higher allocations had been made for infrastructure projects because they would have multiplier effects on productivity, employment and would boost private sector investments in the country.
The president added: “Efforts to fast-track the modernisation of our railway system will receive further boost through the allocation of N213.14 billion as counterpart funding for the Lagos-Kano, Calabar-Lagos, Ajaokuta-Itakpe-Warri rail line and the Kaduna-Abuja railway projects.
“As I mentioned earlier, in 2016, we invested a lot of time ensuring the paper work is done properly while negotiating the best deal for Nigeria. I must admit this took longer than expected, but I am optimistic that these projects will commence in 2017 for all to see.
“Given the emphasis placed on industrialisation and supporting (small and medium enterprises (SMEs), the sum of N50 billion has been set aside as federal government contribution for the expansion of existing, as well as for the development of new export processing and special economic zones.
“These will be developed in partnership with the private sector, as we continue our efforts to promote and protect Nigerian businesses.
“Furthermore, as the benefits of agriculture and mining are starting to become visible, I have instructed that the export expansion grant should be revived in the form of tax credits to companies.
“This will further enhance the development of the agriculture and mining sectors, thereby attracting more investment and creating more jobs. The sum of N20 billion has been voted for the revival of this programme.
“Our small and medium-scale businesses continue to face difficulties in accessing long-term and more affordable credits. To address this situation, the sum of N15 billion has been provided for the recapitalisation of the Bank of Industry and the Bank of Agriculture.
“In addition, the Development Bank of Nigeria will soon start operations with US$1.3 billion focused exclusively on small and medium-sized enterprises.”
Buhari further said agriculture remained the expression of the federal government’s commitment to diversify the economy with what he described as an historic allocation of N92 billion to the sector.
He said the sum would compliment the efforts by both the Ministry of Agriculture and Central Bank of Nigeria (CBN) to boost agriculture output “through increased intervention funding at a single digit interest rate under the Anchor Borrowers’ Programme, commercial agriculture credit schemes and the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending”.
The president also said the government’s agriculture policy would “focus on integrated development of the sector by facilitating access to inputs, improving market access, providing equipment and storage, as well as supporting the development of commodity exchanges”.
He also said the government in 2017 would pursue job creation by improving the skills of the labour force, especially young people and consequently work with the private sector and state governments with a view to establishing and operating model technical and vocational education institutes.
Buhari said the government had proposed to boost healthcare through the expansion of coverage to primary healthcare centres and the National Health Insurance Scheme (NHIS).
On the Special Intervention Programme, the president added that the 2017 budget proposal had retained the allocation of N500 billion for the programme which he said would comprise the Home-grown School Feeding Programme, Government Economic Empowerment Programme, and the N-Power Job Creation Programme,
The N-Power programme, he said, would provide loans for traders and artisans; effect conditional cash transfers to the poorest families and provide funds for the Family Homes Fund (social housing scheme).
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