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UPDATED: Buhari presents N8.6 trillion 2018 budget to National Assembly

President Muhammadu Buhari has presented the 2018 budget proposal to a joint session of members of the Senate and House of Representatives on Tuesday.

A total of N8.612 trillion was proposed by the Executive as the total expenditure for 2018. This represents a 16 percent increase from last years budget of N7.44 trillion.

Out of this sum, a total of N2.652 trillion, or 30.8 percent of the budget proposal, has been mapped out for capital expenditure.

The 2018 budget was termed ‘Budget of consolidation’.

During his speech shortly before laying the budget before the lawmakers, Buhari expressed optimism that 2018 will be “a year of better outcomes” than 2017 which he said “has been a year of uncertainty on many fronts.”

“The tepid economic recovery is expected to pick up pace and the global political terrain is expected to stabilise,” Buhari said.

“The International Monetary Fund is anticipating global GDP growth of 3.7 percent in 2018. Emerging markets and developing economies are expected to lead with GDP growths of 4.9 percent, while advanced economies are projected to grow at a slower rate of 2 percent.

“Nigeria’s journey out of the recent recession was a revealing one, we had many opinions from within and outside Nigeria on how best to address our economic woes. We listened carefully and studied these proposals diligently.

“Our belief has always been that the quickest and easier solution may not necessarily be the best solution for an economy as diverse as ours. We took our time to create a balance and equitable response, keeping in mind that only Nigerian solutions can fix Nigeria’s unique problems, and from the recovery that we are seeing today, it is clear that we made the right decisions.”

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Buhari said that crop production has been the major contributors to non-oil growth leading to a rise of 0.45 percent in the second quarter of 2017.

Also, significant progress has also been made in the solid minerals sector.

“In Ondo State for instance, work is going on to fully exploit the bitumen resources to meet the 600,000 metric tonnes of asphalt imported per annum for roads and other construction projects,” Buhari said.

“We have also established a N30 billion solid minerals development fund to support other minerals exploitation activities across the country.”

THE BUDGET

Buhari said the principal objective of the 2018 Budget will be to reinforce and build on recent accomplishments.

Explaining the key parameters and assumptions for the budget, Buhari said  oil price benchmark was pegged at $45 per barrel, while oil production estimate is expected to be 2.3 million barrels per day, including condensates.

Exchange rate is estimated to remain at N305 to $1 for 2018; the GDP is expected to grow at 3.5 percent; while Inflation Rate is expected to be at 12.4 percent.

ON OGONI CLEANUP

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“We are working hard on the Ogoni Clean-up Project. During the year, we engaged 8 international and local companies proposing different technologies for the mandate,” Buhari said.

“To enable us select the best and most suitable technology for the remediation work, we asked each company to conduct Demonstration Clean-up Exercises in the 4 Local Government Areas of Ogoni Land.

“These Demonstrations were recently concluded and the results are being studied by the Governing Council of the Ogoni Clean-up Project.

“Although the Project will be funded by the International Oil Companies, we have made provisions in the 2018 Budget for the costs of oversight and governance, to ensure effective implementation.”

WHO GOT WHAT

For recurrent expenditure, the Ministry of Interior got the highest vote of N510.87b, followed by the Ministry of Education with N435.01b. Defence Ministry got N422.43b, while that of health got N269.34b.

Ministry of Power, Works and Housing got the highest vote for capital expenditure with N555.88b. Others include: Transportation: N263.10b;  Special Intervention Programmes: N150.00b; Defence: N145.00b; Agriculture and Rural Development N118.98b; Water Resources: N95.11b; Industry, Trade and Investment: N82.92b;  Interior: N63.26b; Education N61.73b; Universal Basic Education Commission: N109.06b; Health: N71.11b and the Federal Capital Territory: N40.30b.

Also, N100b was mapped out for Zonal intervention projects; N45b was voted for the North East Intervention Fund; the Ministry of Niger Delta got N53.89b and the Niger Delta Development Commission was allocated N71.20b.

Money was also voted for other “key projects” which Buhari said his administration is “determined to implement in 2018”.

They include: “N9.8b for the Mambilla hydro power project, including N8.5b as counterpart funding; N12b counterpart funding for earmarked transmission lines and substations; N35.41b for the National Housing Programme; N10.00b for the 2nd Niger Bridge; and N300b for the construction and rehabilitation of the strategic roads mentioned earlier.”

ON THE NIGER DELTA

Buhari said N65b has been mapped out in the 2018 budget for the Presidential Amnesty Programme to “maintain peace and security in the Niger Delta for economic and social activities to thrive”.

“In addition, the capital provision for the Ministry of Niger Delta has been increased to 53.89 billion Naira from the 34.20 billion Naira provided in 2017,” he said.

“This is to further support the development in the region. We will complete all critical projects, including the East-West Road, which has a provision of about 17.32 billion Naira in 2018.”

ON COUNTER TERRORISM AND NORTH EAST REHABILITATION

“Across the nation, and particularly in the North East region, our commitment to the security of life and property remains absolute,” Buhari said.

“We will ensure that our gallant men and women in arms are properly equipped and well-motivated. The result of our efforts is evident in the gradual return to normalcy in the North East.

“It is in this spirit that I recently assented to the North-East Development Commission Bill that was passed by this Distinguished House.

“We expect that this development will consolidate on our ongoing efforts to combat insurgency, reintegrate Internally Displaced Persons and rebuild communities in the North East Region, which have been adversely affected by the insurgency.”

Buhari said similar attention is being given to efforts to reduce the spate of kidnapping, cattle rustling, armed robbery and banditry across the country.

DEBT MANAGEMENT

Buhari said: “We are closely monitoring our debt service to revenue ratio. We shall address this ratio through our non-oil revenue-generation drive and restructuring of the existing debt portfolio.

“Presently, domestic debt accounts for about 79 percent of the total debt. Our medium-term strategy is to reduce the proportion of our domestic debt to 60% by the end of 2019 and increase external debt to 40 percent.

“It is noteworthy that rebalancing our debt portfolio will enhance private sector access to domestic credit.

“In addition, annual debt service costs will reduce as external debts are serviced at lower rates and repaid over a longer period than domestic debt.”



ESTIMATED EARNINGS

“The Federal Government’s estimated total revenue is 6.607 trillion Naira in 2018, which is about 30 percent more than the 2017 target.




     

     

    “As we pursue our goal of revenue diversification, non-oil revenues will become a larger share of total revenues.

    “In 2018, we project oil revenues of 2.442 trillion Naira, and non-oil as well as other revenues of 4.165 trillion Naira.”

    “Total federally-collectible revenue is estimated at 11.983 trillion Naira in 2018. Thus, the three tiers of Government shall receive about 12 percent more revenues in 2018 than the 2017 estimate.

    “Of the amount, the sum of 6.387 trillion Naira is expected to be realised from oil and gas sources. Total receipts from the non-oil sector are projected at 5.597 trillion Naira.”

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