2018 budget: FG’s non-oil revenue projection impressive, says expert

Published November 8, 2017

The President, Institute of Fiscal Studies of Nigeria, Mr Godwin Ighedosa, has commended the Federal Government for making non-oil sector as the centre of its revenue projections to execute its plans in 2018.

Ighedosa said in Abuja that the proposed 2018 budget of N8.612tn showed a remarkable shift from over-dependence on oil revenue.

“For the first time, we are projecting that non-oil revenue is going to overtake oil revenue which obviously is a welcome development because since the 1970s our economy has been largely dependent on oil revenues.

“But the concern right now is where do the government expect to make this much from the non-oil sector?

“I ask this because the major drivers of employment and commercial activities in the country, which is manufacturing and agriculture, are not doing so very well in percentage to GDP.

“Also if it’s on taxes, it’s still unachievable because our tax to GDP ratio remains one of the lowest in the world at about six per cent and I don’t see government raising it so much to make that much difference in 2018.

“So getting the non-oil revenue projects would be a long stretch,” he said.

Ighedosa expressed concern about the government’s oil projections for the year 2018.

He said that the problem from the Niger-Delta region was far from over, thus it would continue to impact negatively on oil production.

“Yes, some kind of agreements have been reached between the government and the groups in the Niger-Delta which has helped raise the production level a bit. But it’s not enough.

“However, 2.3 million barrels per day for 2018 is a bit of a stretch because some of the groups in the Niger-Delta are already threatening the government.

“They want to break the agreement unless the government implements as quickly as possible some of their key demands and I don’t see the government meeting some of these demands anytime soon.

“So it may mean that we won’t be able to achieve the revenue projected,” he said.

Ighedosa said the N2.005tn budget deficit, which translates to additional borrowings in 2018 fiscal year to finance part of the budget may pose a challenge as any mention of borrowings is perceived negatively by Nigerians.

He, however, said that borrowings for investment was good for the county as it would improve the balance sheet of the Federal Government.

He advised the government to continue to keep a close tab on the ratio of revenue to debt servicing.

President Muhammadu Buhari earlier presented the 2018 budget proposal, tagged “Budget of Consolidation’’, which is expected to reinforce and build on recent accomplishments of the government.

The key parameters of the budget include a crude oil benchmark price of $45 per barrel, oil production estimate of 2.3 million barrels per day, and the exchange rate of N305 per dollar.

The Budget had a projected oil revenue of N2.442tn and non-oil projection of N4.165tn.

The Budget had a Capital expenditure projection of N2.428tn, Recurrent expenditure of N3.494tn, Debt Servicing,N2.014tn and Fiscal Deficit of N2.005tn.

http://punchng.com/2018-budget-fgs-non-oil-revenue-projection-impressive-says-expert/

una don dey kolo abi, who una wan fool ?
every blessed day billions from the oil sector dey enter una azza.. una come here dey yan apkata

What are the demands. Those fighting are not fighting for Niger Delta but their pocket.
Nice one Mr. President, next year will certainly be better by God's grace.

The biggest question that nobody seems to have an answer to is where the government will generate the non-oil revenue from.

seunmsg:
The biggest question that nobody seems to have an answer to is where the government will generate the non-oil revenue from.

FG already targets increase revenue from Tax collection via VAIDS. Loot recovery, Agric and Mining, etc. The target seems ambitious but if one has been following the latest developments closely, it looks achievable..

deji17:


FG already targets increase revenue from Tax collection via VAIDS. Loot recovery, Agric and Mining, etc. The target seems ambitious but if one has been following the latest developments closely, it looks achievable..

Even though i am very pessimistic about the projections, i really wish the government the best. Nothing is impossible if those at the helm of affairs are determined to achieve it.

seunmsg:
The biggest question that nobody seems to have an answer to is where the government will generate the non-oil revenue from.

Didn't you read from the thread that FG is borrowing N2trillions plus while the rest is expected from taxes , ports and recovered loots.

Summary

(1) Company Income Tax
(2) Value Added Tax
(3) Revenues from the sea ports
(4) Recovered loots
(5) Borrowing

Thank you, Oga expert. Unlike the airheads we have here who cannot discern.

Rotimik:


Didn't you read from the thread that FG is borrowing N2trillions plus while the rest is expected from taxes , ports and recovered loots.

Summary

(1) Company Income Tax
(2) Value Added Tax
(3) Revenues from the sea ports
(4) Recovered loots
(5) Borrowing

is 4trillion the budget for the fg then the national non oil receipts required is 8 triln if the 4 trn is national fg has only 2 tn
which of the wahala is it?

It's a very tight budget. The revenue from oil is even less than the recurrent expenditure. If for any reason there s borrowing shortfall, the capital side would bear the brunch. Like all the previous budgets

Rotimik:


Didn't you read from the thread that FG is borrowing N2trillions plus while the rest is expected from taxes , ports and recovered loots.

Summary

(1) Company Income Tax
(2) Value Added Tax
(3) Revenues from the sea ports
(4) Recovered loots
(5) Borrowing

Read and understand before you rush to comment. We are talking about meeting the non oil revenue projection and not the funding of the entire budget proposal.