President Muhammad Buhari has presented a 2017 budget proposal of N7.298 trillion before the joint session of the National Assembly on Wednesday in Abuja.

The budget is based on an exchange rate of N305 per dollar which is against N197 to a dollar in the 2016 budget.

The budget is also projected on a benchmark of $42.5 per barrel of oil, as against $38 in 2016.

The budget which is expected to bring about economic stability in the country is 20.4 percent higher than that of  N6.06 trillion in 2016.

Stressing the need to bring the country out of recession, Buhari said 30.7 percent is allocated to capital expenditure.

He said that “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. 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 regard to expenditure, we have proposed a budget size of N7.298 trillion which is a nominal 20.4% increase over 2016 estimates. 30.7% of this expenditure will be capital in line with our determination to reflate and pull the economy out of recession as quickly as possible.”

Meanwhile the 2017 budget is based on a deficit of N2.36 trillion for 2017 which is about 2.18% of GDP.

Buhari pointed out that the “deficit will be financed mainly by borrowing which is projected to be about N2.32 trillion. Our intention is to source N1.067 trillion or about 46% of this borrowing from external sources while, N1.254 trillion will be borrowed from the domestic market.”

A breakdown of the budget includes 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; and Capital expenditure of N2.24 trillion (including capital in Statutory Transfers).

As expected, the Ministry of Power, Works and Housing has the biggest share of the budget, at N520 billion for capital projects.

Transportation followed Power, Works and Housing in the biggest capital expenditure with N262 billion while Special Intervention Programmes   and Defence have N150 billion and N140 billion respectively.

The Ministry of Agriculture is also getting a record-high of N92 billion, while the Ministry of Interior will boast of a capital expenditure allocation N63 billion.

On the recurrent expenditure, the Ministry of Interior leads the rest with N482.37 billion followed by N398.01 billion for Ministry of Education, N325.87 billion for Ministry of Defence, and N252.87 billion for Ministry of Health.

Meanwhile the amnesty programme, which was slashed to N20bn in 2016, leading to unrest in the Niger Delta, has been tripled in the 2017 budget.

Buhari said that “The allocation of the presidential amnesty programme has been increased to N65 billion in 2017 budget. Furthermore, N45 billion in funding has been provisioned in funding for the rehabilitation of the northeast.”

Just like the 2016 budget, the 2017 budget retains the allocation of N500 billion to the 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 for social housing scheme.

The judiciary has an increased allocation from N70 billion in 2016 to N100 billion.

Buhari explained that, “This increase in funding is further meant to enhance the independence of the judiciary and enable them to perform their functions effectively.”

Meanwhile, the president noted that the implementation of the 2016 Budget was hampered by the combination of relatively low oil prices in the first quarter of 2016, and disruptions in crude oil production which led to significant shortfalls in projected revenue.

He disclosed that “As at 30 September 2016, aggregate revenue inflow was N2.17 trillion or 25% less than pro-rated projections. Similarly, N3.58 trillion had been spent by the same date on both recurrent and capital expenditure. This is equivalent to 79% of the pro-rated full year expenditure estimate of N4.54 trillion as at the end of September 2016.”

Buhari added that the amount of N753.6 billion had been released for capital expenditure as at the end of October 2016.

However, the president said that the implementation of the 2017 budget will be based on economic recovery and growth strategy, stressing that measures have been put in pace for a clear road map of policy actions and steps designed to bring the economy out of recession and to a path of steady growth and prosperity.