Yesterday, June 12th, 2017, the 2017 Nigerian Budget was signed at about 4:40pm. The 2017 budget is totalled at 7.44trillion Naira. The budget signing finally occurred after prolonged periods of delay. The budget was signed by the Acting President, Yemi Osibanjo. With the signing of the budget, government can now begin to release funds for the execution of its projects and programmes for the development of the country. Here is the Critical Analysis Of The 2017 Nigerian Budget.
Before the Critical Analysis Of The 2017 Nigerian Budget, see this. The budget signing was witnessed by Senate President Bukola Saraki; House of Representatives Speaker Yakubu Dogara; Deputy Senate President Ike Ekweremadu; Majority Leader of the House of Representatives, Femi Gbajabiamila, and other principal officers of the National Assembly. Also present were Chief of Staff to the President, Abba Kyari; Head of the Civil Service of the Federation Winifired Oyo-Ita; Acting Secretary to the Government of the Federation, Habiba Lawal; Minister of Finance, Kemi Adeosun; Minister of Budget and National Planning, Udo Udoma; Senate Majority Leader, Ahmed Lawan; Director General of Budget Office, Ben Akabueze; and key aides of the president and acting president.
Key Budget Terms
The following key term will enable a better appreciation of the Critical Analysis Of The 2017 Nigerian Budget.
- Recurrent Expenditure: part of government expenditure meant for monthly payment of salary.
- Capital Expenditure: This is money meant for expenditure on capital projects. They include schools, roads, markets, hospitals etc.
- Personnel Costs: Part of recurrent expenditure used for payment of salaries and pensions of government workers.
- Overhead Costs: Expenditure for daily or periodic administrative expenses.
- Debt Stock: total domestic and external debts of the government over a period of time.
- Debt Servicing: The amount of money allocated in a budget for the payment of domestic and external loans.
Critical Analysis Of The 2017 Nigerian Budget: Assumptions, Revenue Projections and Fiscal Deficit
- The 2017 Budget is based on a benchmark crude oil price of US$42.5 per barrel; an oil production estimate of 2.2 million barrels per day; and an average exchange rate of N305 to the US dollar.
- Based on these assumptions, aggregate revenue available to fund the federal budget is N4.94 trillion. This is 28% higher than 2016 full year projections. Oil is projected to contribute N1.985 trillion of this amount.
- 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.
- Proposed a budget size of N7.298 trillion which is a nominal 20.4% increase over 2016 estimates.
- This fiscal plan will result in a deficit of N2.36 trillion for 2017 which is about 2.18% of GDP. The deficit will be financed mainly by borrowing which is projected to be about N2.32 trillion.
The proposed aggregate expenditure of N7.298 trillion will comprise:
- Statutory transfers of N419.02 billion
- Debt service of N1.66 trillion
- Sinking fund of N177.46 billion to retire certain maturing bonds
- Non-debt recurrent expenditure of N2.98 trillion
- Capital expenditure of N2.24 trillion (including capital in Statutory Transfers).
- Budgetary allocation to the Judiciary N100 billion.
A significant portion of recurrent expenditure has been provisioned for the payment of salaries and overheads in institutions that provide critical public services. The budgeted amounts for these items are:
- 37 billion for the Ministry of Interior
- 01 billion for Ministry of Education
- 87 billion for Ministry of Defence
- 87 billion for Ministry of Health.
- Personnel costs is N1.8 trillion.
The size of the 2017 capital budget is N2.24 trillion (inclusive of capital in Statutory Transfers), or 30.7% of the total budget. Key capital spending provisions in the Budget include the following:
- Power, Works and Housing: N529billion;
- Transportation: N262 billion;
- Special Intervention Programmes: N150 billion.
- Defence: N140 billion;
- Water Resources: N85 billion;
- Industry, Trade and Investment: N81 billion;
- Interior: N63 billion;
- Education N50 billion
- Universal Basic Education Commission: N92 billion
- Health: N51 billion
- Federal Capital Territory: N37 billion;
- Niger Delta Ministry: N33 billion; and
- Niger Delta Development Commission: N61 billion;
- N100 billion has been provided in the Special Intervention programme as seed money into the N1trillion Family Homes Fund that will underpin a new social housing programme.
- 14 billion as counterpart funding for the Lagos-Kano, Calabar-Lagos,Ajaokuta-Itakpe-Warri railway, and Kaduna-Abuja railway projects.
- A sum of N50 billion has been set aside as Federal Government’s contribution for the expansion of existing, as well as the development of new, Export Processing and Special Economic Zones.
- Export Expansion Grant is pegged at N20 billion.
- Recapitalization of the Bank of Industry and the Bank of Agriculture: N15 billion.
- Agricultural Sector: N92 billion.
- Special Intervention Programme consisting of the Home-grown School Feeding Programme, Government Economic Empowerment programme, N-Power Job Creation Programme to provide loans for traders and artisans, Conditional Cash Transfers to the poorest families and the new Family Homes Fund (social housing scheme): N500 billion.
- Federal Ministry of Environment: N9.52 billion.
- Presidential Amnesty Programme: N65.
- Rehabilitation of the North East: N45 billion.
Your comments, contributions and analysis on this Critical Analysis Of The 2017 Nigerian Budget are highly welcomed. Thank you.