#2017Budget: Defence gets N465 billion.

Defence is one of the four sectors that got the highest allocation in the 2017 budget, an official has said. A total of N465.87 billion was allocated to defence in the 2017 budget that is before the National Assembly for consideration.

 

According to the breakdown given by the Minister of Budget and National Planning, Udoma Udoma, on Monday, the Ministry of Defence received N325.87 billion as recurrent vote in the N7.29 trillion budget proposal.

 

It, however, came fourth in capital allocation with N140 billion.

 

The Ministry of Interior got the highest recurrent allocation of N482.37 billion and N63 billion capital vote for the period.

 

The other sectors that got high allocation were Education, N398.01 billion and Health with N252.86 billion.

 

Mr. Udoma explained that defence and the three other sectors needed to be well financed because they employed large manpower and provided critical services to the nation.

 

In 2016, the defence got recurrent expenditure of N294.556 billion and N134.572 billion as capital vote.

Minister to break Buhari’s 2017 budget in details Monday

The Minister of Budget and National Planning, Senator Udoma Udo Udoma, will on Monday give a breakdown of the highlights of the 2017 Budget estimates presented on Wednesday to the National Assembly by President Mohammadu Buhari.

Those expected at the briefing, which will be held at the Banquet Hall of the State House in Abuja, include media practitioners, Heads of Federal Government Ministries, Departments and Agencies, Representatives of States and Local Governments, Private Sector Operators and Associations, Captains of industry and Civil Society Organizations.
Presenting the broad estimates to the National Assembly on Wednesday, President Buhari said the implementation of the 2017 Budget will be based on government’s economic recovery and growth strategy. The Plan, which builds on the Strategic Implementation Plan for the 2016 Budget, provides 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.

The President said “we continue to face the most challenging economic situation in the history of our Nation. Nearly every home and nearly every business in Nigeria is affected one way or the other. Yet I remain convinced that this is also a time of great opportunity.”

The President said: “we have reached a stage when the creativity, talents and resilience of the Nigerian people is being rewarded. Those courageous and patriotic men and women who believed in Nigeria arenow seeing the benefits gradually come to fruition. I am talking about the farmers who today are experiencing bumper harvests, the manufacturers who substituted imported goods for local materials and the car assembly companies who today are expanding to meet higher demand.”

Vowing that his government will change the Nigerian economic focus from dependence on a single commodity and the habit of Nigerians depending on foreign goods, the President said government will increasingly grow and process local food, engage in local manufacturing and refining of petroleum products.

“We will buy ‘Made in Nigeria’ goods. We will encourage garment manufacturing and Nigerian designers, tailors and fashion retailers. We will patronize local entrepreneurs. We will promote the manufacturing powerhouses in Aba, Calabar, Kaduna, Kano, Lagos, Nnewi, Onitsha, and Ota. From light manufacturing to cement production and petrochemicals, our objective is to make Nigeria a new manufacturing hub.”

President Buhari explained 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. “This contributed to the economic slow-down that negatively affected revenue collections by the Federal Inland Revenue Service and the Nigerian Customs Service.”

Government’s priorities in 2017, according to him, will be a continuation of the 2016 plans but adjusted to reflect new additions made in the Economic Recovery and Growth Plan. “In order to restore growth, a key objective of the Federal Government will be to bring about stability and greater coherence between monetary, fiscal and trade policies while guaranteeing security for all.”

He said 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. 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 N210.9billion.

With regard to expenditure, he said “we have proposed a budget size of N7.298trillion 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.”

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. “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’, he said.

 

Akpandem James,
Media Adviser to the Hon. Minister

#2017Budget: Nigerians react as FG promises full implementation.

Some stakeholders and economic experts in Borno on Wednesday expressed mixed feelings over the 2017 budget presented by President Muhammadu Buhari.

Some said they were confident about the president’s political will, while others predicted a robust economic outlook in 2017, with drastic economic reforms imminent.

Abdullahi Gana, a civil servant, said the 2016 budget had not yielded much positive results.

“What particular project has been carried out with the 2016 budgetary figures. The citizens haven’t felt the benefits of this year’s budgetary dispensations and are very hungry.

“They cannot find the time to listen or read about 2017 figures when that of 2016 hasn’t helped their lives.

“The government must find a way to circulate money in the economy so that it gets to the impoverished and hungry citizens,” Mr. Gana said.

“President Buhari said the 2017 budget would contain proposals and packages that would lead Nigeria out of the present economic recession.

“We are glad that most of the government policies are targeted at reducing unemployment and poverty, and wealth creation.

“The social intervention programme of N500 billion in the 2017 budget would go a long way to cushion the hardship of Nigerians,” he said.

Bulama Baba, another civil servant, said the effort of the government to diversify the economy was very commendable.

“By declaring that the economy must be diversified, the president has said it all; that is his economic policy and the direction of his government.

“It is left for those in the business environment to change the way business is done, to turn around agriculture, mining, local production of the basic needs of the Nigerian people.

“Come to think of it, after all what is budgeting and how does it affect the welfare of the people.

“Budgets are just guidelines in spending if you have and want to spend or proposals.

“In 2016, the government made a projection (budget) on income and expenditure based on a certain amount of crude sales.

“Unfortunately, that is not realisable because of obvious reasons, fall in crude price which accounts for 80 per cent of government revenue.

“That has already created a gap and it means readjustment to give more attention to priority areas.”

Muhammad Ciroma said if all proposals that the president presented in the assembly would be executed with integrity, Nigeria would have no cause to be broke.

“It is no doubt that the PMB government has made significant gains in terms of governance and transparency in the oil sector.

“The government must therefore monitor effectiveness of operations at the refineries and show a readiness to tackle difficult issues, especially the Niger Delta militants.”

Muhammad Askira, a lecturer at Ramat Polytechnic, said: “By what ensued in the 2016 budget, it has brought out the fact that budgets were never holistically prepared in this country for anything at all.

“It was cut and paste actually, nobody cares so long as money will be made available to be shared, with no accounting procedures followed and budget monitoring nonexistent.

“Supposing there was no change in government from PDP to APC, you and I would never have known the inadequacies in running the government of Nigeria or any government before, for that matter.

“It was just a bandwagon; people were carried along to ‘eat’ what was offered them and no questions asked.

“The onus (is) on this administration to put things rightly in place and do things the right way is enough exercise to last it through its first four years,” Mr. Askira said.

However, Friday Nwadinobi, a resident of Gwange quarters, said polarisation of the country along so many fault lines was affecting governance.

“The loyalty any leader gets from the civil servants or subordinates depends on ethno religious beliefs or alignment.

“Saboteurs are everywhere. And for a government that has clearly declared war on corruption, when even the head of an arm of government is under trial, leaves so much to be desired.

“Criticising the government that is bringing change may not be the solution.

“The presidency must come out and educate Nigerians the more on what it is doing, because they are doing so much to get us out of the problems we are in; but only those who have ears to listen or eyes to see can assimilate that.

“When economists are criticising the economic team because they feel they know it all and should have been part of it, then you know that something is wrong with us.

“Is the implementation of the TSA not a great departure from previous economic policies ? Is that not enough to praise the political will and decision of the government?

“For the government to survive to this point, with all the problems it inherited like Niger Delta crises, corruption, insecurity, poor infrastructure and many others, the government of President Muhammadu Buhari deserves commendation,” Mr. Nwadinobi said.

#2017Budget: Senate President Saraki’s remark.

Protocol:

1. It is my pleasure on behalf of my Distinguished and Honourable colleagues to warmly welcome you Mr. President and your entourage to this joint session of the National Assembly.

2. Mr. President, while we may have struggled with key aspects of our budget process in the past, I am happy to note that we have made some important progress.

To start with, we are seeing the budget presentation coming slightly earlier this year. Though, we hope tosee an even greater improvement on this in the coming year. But more importantly however, is that so far this year’s budget process has benefitted from greater cooperation and consultations between the National Assembly and the Executive.

3. Mr. President, I wish to note that the National Assembly recognizes however that the problem with our budget and budgeting process goes far deeperthan the relative progress we have made. This is why in August this year, I inaugurated a joint Executive/Legislative committee and a technical committee to review our budget systems and identify ways we can make them more transparent, more participatory, more result oriented and therefore more effective.

The committee has since submitted its report and the National Assembly is already started the process of implementing the recommendations.

4. Already, we have tried to bring the key highlights of the report into effect within the 2016 framework. These include:
• pre-budget consultation and engagement,
• greater information sharing and recording,
• Public hearing on the budget bill
• Drafting of an Organic Budget Bill
• Amendment of the Public Procurement Act

5. Our hope is that the remainder of the recommendations of this report will be implemented within the 2017 budget year with the passage of the Organic Budget Law.

The Organic Budget Law will provide the legal framework for regulating the procedures that budget preparation, approval, implementation and even accounting must follow. It will bring the budget and national planning regime within a clearly defined framework, thereby ensuring greater predictability, transparency and efficiency.

6. When the current National Assembly introduced the Civil Society Public Hearing on the Budget initiative, the idea was to open up the budgeting space by incorporating the Civil Society into the budget process, thereby ensuring greater transparency and accountability. We are proud to say that this engagement has come to stay as a crucial part of our budget approval process.

7. Mr. President, distinguished colleagues, honourable members, you would recall when the National Bureau of Statistics NBS came out with the numbers to confirm that the Nigerian economy has slumped into recession, the National Assembly rose with one voice.  Through a joint resolution, we recommended that you make a “state of the nation” address on the plan of government to get us out of recession and have 20 important Executive actions that in our view needed to be taken to get the economy back on track. The National Assembly on its part listed and prioritized 11 economic reform bills for passage. We intend to get these bills ready alongside the 2017 Appropriation bill. We believe that the core elements of these bills will aid the Executive in mobilizing the required private capital into the general economy, but especially the infrastructure market.

8. In the thinking of the 8th National Assembly, our country can no longer rely on the public sector alone to spend us out of recession. It is therefore critical that we mainstream private sector business and investment in the economy. To achieve this, we must make it much easier and efficient for people to invest and do business in our country.

9. Further to this, we are also aware that if we must attract private investments to play a central role in our economic recovery efforts, must make deliberate efforts to market Nigeria as an attractive brand through a very robust and highly coordinated process of engagements. This effort must necessarily start with injecting confidence in the market through clarity and consistency of policies. We must speak the right language and show that we are open to and ready for legitimate business.

10. I wish to reassure Mr. President that the National Assembly would continue to seek opportunities to deepen this relationship because we are convinced it is the only by working closely together that our country can make the progress that we all desire.

11. The overarching purpose of a budget is essentially to ease the economic pressure on our people in general and the poor most especially. The 2017 budget assumes even a greater significance, particularly in this time of recession. Mr. President, the feedback we get from visits to our various constituencies is that there is hardship in the land. We can see it and we can feel it. This situation therefore commands all of us as government to a greater sense of urgency. We cannot work magic, but we must continue to work the clock.

Our people must see that the singular pre-occupation of government is the search for solution to the current economic hardship; and the commitment to ease their burden. They don’t want to know what political parties we belong, what language we speak or how we worship God. They have trusted their fates into our hands, and they need us now more than ever, to justify the trust that they have reposed on us. The people of Nigeria will pardon us if we do some things wrong. But they will not forgive us if we do nothing. And that is why, Mr. President the two chambers have taken a position whatever may be our differences, or opinions on issues of the economy we will all work with one common purpose for this reason.

12. It is in times like this, when we are challenged from all sides that we need to develop new relationships and cultivate more friends. No one can clap with one hand and expect to be heard. This is the time when compromise, engagement is the tool necessary for successful collaboration and cooperation.

13. This is why I encouraged the Executive to continue with its engagement plans across all sections and stakeholders in the country particularly with our brothers in the Niger Delta and all parts of the country where instability is impacting on our collective economic and security aspirations.

14. Mr. President, you will recall in 2015, , I made a clarion call while receiving Your Excellency’s budget presentation for that year that the 2016 budget needed to be bold and pragmatic to drive local production and promote made-in Nigeria goods.

15. Today, permit me Your Excellency to reiterate this call. The only way we can cut down on our foreign exchange needs, create jobs and stimulate entrepreneurship in the country is to promote local manufacturing and investments.

16. This is why the National Assembly injected the made-in-Nigeria amendment into the Public Procurement Act. We are expectant that with your leadership, Mr. President, we will achieve even much more in this area. It is the hope of the National Assembly that the 2017 budget will continue to proactively pursue this policy objective.

17. Mr. President, though we are confident that we are receiving from you a very well-articulated budget proposal, it is worthy to point out that the best produced budget from the executive at all times still remains a proposal according to our constitution which the National Assembly will work assiduously on.

On behalf of the National Assembly, we commit to work on the 2017 budget, conscious of the responsibility that the current economic situation imposes on us and driven by the urgency to alleviate the suffering of our people and also bearing in mind your aspiration and vision for our people. We assure you Mr. President and all Nigerians that not even a single minute would be wasted on our side in the course of getting this budget approved.

18. With these few words, I hereby invite Your Excellency to deliver your speech and lay the 2016 budget proposals for the consideration of the National Assembly in accordance with Section 81 of the 1999 Constitution of the Federal Republic of Nigeria as amended.

19. I thank you and extend the season’s greetings to all.

FULL TRANSCRIPT: President Buhari’s #2017Budget presentation speech

Protocols

 

  1. It is my pleasure to present the 2017 Budget Proposals to this distinguished Joint Assembly: the Budget of Recovery and Growth.

 

  1. We propose that the implementation of the Budget will be based on our Economic Recovery and Growth Strategy. The Plan, which builds on our 2016 Budget, provides 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.

 

  1. We continue to face the most challenging economic situation in the history of our Nation. Nearly every home and nearly every business in Nigeria is affected one way or the other.

 

  1. Yet I remain convinced that this is also a time of great opportunity. We have reached a stage when the creativity, talents and resilience of the Nigerian people is being rewarded. Those courageous and patriotic men and women who believed in Nigeria are now seeing the benefits gradually come to fruition. I am talking about the farmers who today are experiencing bumper harvests, the manufacturers who substituted imported goods for local materials and the car assembly companies who today are expanding to meet higher demand.

 

  1. Distinguished members of National Assembly, for the record: For many years we depended on oil for foreign exchange revenues. In the days of high oil prices, we did not save. We squandered.

 

  1. We wasted our large foreign exchange reserves to import nearly everything we consume. Our food, Our clothing, Our manufacturing inputs, Our fuel and much more. In the past 18 months when we experienced low oil prices, we saw our foreign exchange earnings cut by about 60%, our reserves eroded and our consumption declined as we could not import to meet our needs.
  2. By importing nearly everything, we provide jobs for young men and women in the countries that produce what we import, while our own young people wander around jobless. By preferring imported goods, we ensure steady jobs for the nationals of other countries, while our own farmers, manufacturers, engineers, and marketers, remain jobless.

 

  1. I will stand my ground and maintain my position that under my watch, that old Nigeria is slowly but surely disappearing and a new era is rising in which we grow what we eat and consume what we make.

 

We will CHANGE our habits and we will CHANGE Nigeria.

 

  1. By this simple principle, we will increasingly grow and process our own food, we will manufacture what we can and refine our own petroleum products. We will buy ‘Made in Nigeria’ goods. We will encourage garment manufacturing and Nigerian designers, tailors and fashion retailers. We will patronize local entrepreneurs. We will promote the manufacturing powerhouses in Aba, Calabar, Kaduna, Kano, Lagos, Nnewi, Onitsha, and Ota. From light manufacturing to cement production and petrochemicals, our objective is to make Nigeria a new manufacturing hub.

 

  1. Today, the demand of the urban consumer has presented an opportunity for the rural producer. Across the country, our farmers, traders and transporters are seeing a shift in their fortunes. Nigerians who preferred imported products are now consuming made in Nigeria products. From Argungu in Kebbi to Abakalaki in Ebonyi, rice farmers and millers are seeing their products move. We must replicate such success in other staples like wheat, sugar, soya, tomato and dairy products. Already, the Ministry of Agriculture and Rural Development, the Central Bank of Nigeria, the Organised Private Sector and a handful of Nigerian commercial banks, have embarked on an ambitious private sector-led N600 billion program to push us towards self-sufficiency in three years for these products. I hereby make a special appeal to all State Governors to make available land to potential farmers for the purpose of this program.

 

  1. To achieve self-sufficiency in food and other products, a lot of work needs to be done across the various value chains. For agriculture, inputs must be available and affordable. In the past, basic inputs, like the NPK fertilizer, were imported although key ingredients like urea and limestone are readily available locally. Our local blending plants have been abandoned. Jobs lost and families destroyed. I am pleased to announce today that on 2nd December 2016, Morocco and Nigeria signed an ambitious collaboration agreement to revive the abandoned Nigerian fertilizer blending plants. The agreement focuses on optimizing local materials while only importing items that are not available locally. This program has already commenced and we expect that in the first quarter of 2017, it will create thousands of jobs and save Nigeria US$200 million of foreign exchange and over N60 billion in subsidy.

 

  1. We must take advantage of current opportunities to export processed agricultural products and manufactured goods. Let it not be lost on anyone that the true drivers of our economic future will be the farmers, small and medium sized manufacturers, agro-allied businesses, dressmakers, entertainers and technology start-ups. They are the engine of our imminent economic recovery. And their needs underpin the Economic Recovery and Growth Plan.

 

  1. Let me, Mr. Senate President, Right Hon. Speaker, here acknowledge the concerns expressed by the National Assembly and, in particular, acknowledge your very helpful Resolutions on the State of the Economy, which were sent to me for my consideration. The Resolutions contained many useful suggestions, many of which are in line with my thinking and have already been reflected in our Plan. Let me emphasise that close cooperation between the Executive and the Legislature is vital to the success of our recovery and growth plans.

 

  1. Permit me to briefly outline a few important features of the Plan. The underlying philosophy of our Economic Recovery and Growth Plan is optimizing the use of local content and empowering local businesses. The role of Government must be to facilitate, enable and support the economic activities of the Nigerian businesses as I earlier mentioned. Fiscal, monetary and trade policies will be fully aligned and underpinned by the use of policy instruments to promote import substitution. Government will however at all times ensure the protection of public interest.

 

  1. First we clearly understand the paradox that to diversify from oil we need oil revenues. You may recall that oil itself was exploited by investment from agricultural surpluses. We will now use oil revenues to revive our agriculture and industries. Though we cannot control the price of crude oil, we are determined to get our production back to at least 2.2 million barrels per day. Consistent with the views which have also been expressed by the National Assembly, we will continue our engagement with the communities in the Niger Delta to ensure that there is minimum disruption to oil production. The National Assembly, State and Local Governments, Traditional Rulers, Civil Society Organisations and Oil Companies must also do their part in this engagement. We must all come together to ensure peace reigns in the Niger Delta.

 

  1. In addition, we will continue our ongoing reforms to enhance the efficiency of the management of our oil and gas resources. To this effect, from January 2017, the Federal Government will no longer make provision for Joint Venture cash-calls. Going forward, all Joint Venture operations shall be subjected to a new funding mechanism, which will allow for Cost Recovery. This new funding arrangement is expected to boost exploration and production activities, with resultant net positive impact on government revenues which can be allocated to infrastructure, agriculture, solid minerals and manufacturing sectors.

 

  1. I earlier mentioned our ambitions for policy harmonisation. But we all know that one of the peculiar problems of our environment is execution. This phenomenon affects both government carrying out its own functions and the innumerable bureaucratic hurdles in doing business. To this end, I will be issuing some Executive Orders to ensure the facilitation and speeding up of government procurements and approvals. Facilitation of business and commerce must be the major objective of government agencies. Government must not be the bottle neck. Additionally, these Executive Orders will widen the scope of compliance with the Fiscal Responsibility Act by Federal Government owned entities and promote support for local content in Ministries, Department and Agencies.

 

  1. The Executive will soon place before the National Assembly proposals for legislation to reduce statutorily mandated minimum times for administrative processes in order to speed up business transactions. In addition, I have established the Presidential Enabling Business Council, chaired by the Vice President with a mandate to make doing business in Nigeria easier and more attractive. Getting approvals for business and procurements will be simplified and made faster.

 

  1. In 2017, we will focus on the rapid development of infrastructure, especially rail, roads and power. Efforts to fast-track the modernization of our railway system is a priority in the 2017 Budget. In 2016, we made a lot of progress getting the necessary studies updated and financing arrangements completed. We also addressed some of the legacy contractor liabilities inherited to enable us to move forward on a clean slate. Many of these tasks are not visible but are very necessary for sustainability of projects. Nigerians will soon begin to see the tangible benefits in 2017.

 

  1. We also have an ambitious programme for growing our digital platforms in order to modernise the Nigerian economy, support innovation and improve productivity and competitiveness. We will do this through increased spending on critical information technology infrastructure and also by promoting policies that facilitate investments in this vital sector.

 

  1. During 2016, we conducted a critical assessment of the power sector value chain, which is experiencing major funding issues. Although Government, through the CBN and other Development Finance Institutions has intervened, it is clear that more capital is needed. We must also resolve the problems of liquidity in the sector. On its part, Government has made provisions in its 2017 Budget to clear its outstanding electricity bills. This we hope, will provide the much needed liquidity injection to support the investors.

 

  1. In the delivery of critical infrastructure, we have developed specific models to partner with private capital, which recognize the constraints of limited public finances and incorporate learnings from the past. These tailor-made public private partnerships are being customized, in collaboration with some global players, to suit various sectors, and we trust that, the benefits of this new approach will come to fruition in 2017.

 

  1. Fellow Nigerians, although a lot of problems experienced by this Administration were not created by us, we are determined to deal with them. One of such issues that the Federal Government is committed to dealing with frontally, is the issue of its indebtedness to contractors and other third parties. We are at an advanced stage of collating and verifying these obligations, some of which go back ten years, which we estimate at about N2 trillion. We will continue to negotiate a realistic and viable payment plan to ensure legitimate claims are settled.

 

2016 Budget Performance

  1. In 2016, the budget was prepared on the principles of zero based budgeting to ensure our resources were prudently managed and utilized solely for the public good. This method was a clear departure from the previous incremental budgeting method. We have adopted the same principles in the 2017 Budget.

 

  1. Distinguished members of the National Assembly may recall that the 2016 Budget was predicated on a benchmark oil price of US$38 per barrel, oil production of 2.2 million barrels per day and an exchange rate of N197 to the US dollar.

 

  1. On the basis of these assumptions, aggregate revenue was projected at N3.86 trillion while the expenditure outlay was estimated at N6.06 trillion. The deficit of N2.2 trillion, which was about 2.14% of GDP was expected to be mainly financed through borrowing.

 

  1. 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. This contributed to the economic slow-down that negatively affected revenue collections by the Federal Inland Revenue Service and the Nigerian Customs Service.

 

  1. 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.

 

  1. In spite of these challenges, we met both our debt service obligations and personnel costs. Similarly, overhead costs have been largely covered.

 

  1. Although capital expenditure suffered as a result of project formulation delays and revenue shortfalls, in the five months since the 2016 Budget was passed, the amount of N753.6 billion has been released for capital expenditure as at the end of October 2016. It is important to note that this is one of the highest capital releases recorded in the nation’s recent history. In fact, it exceeds the aggregate capital expenditure budget for 2015.

 

  1. Consequently, work has resumed on a number of stalled infrastructure projects such as the construction of new terminals at the country’s four major airports; numerous major road projects; key power transmission projects; and the completion of the Kaduna – Abuja railway to mention a few.

 

  1. We remain resolute in our commitment to the security of life and property nationwide. The courageous efforts and sacrifices of our heroes in the armed forces and para military units are clear for all to see. The gradual return to normality in the North East is a good example of the results. Our resolve to support them is unwavering. Our spending in the 2016 fiscal year focused on ensuring these gallant men and women are properly equipped and supported. We will continue to prioritise defence spending till all our enemies, within and outside, are subdued.

 

  1. Stabilisation of sub-national government finances remains a key objective in our plans to stimulate the economy. In June 2016, a conditional Budget Support Programme was introduced, which offered State Governments N566 billion to address their funding shortfalls. To participate, State Governments were required to subscribe to certain fiscal reforms centered around transparency, accountability and efficiency. For example, States as part of this program were required to publish audited accounts and introduce biometric payroll systems with the goal of eliminating ghost workers.

 

  1. Our efforts on cost containment have continued throughout the year. We have restricted travel costs, reduced board members’ sitting allowances, converted forfeited properties to Government offices to save on rent and eliminated thousands of Ghost workers. These, and many other cost reduction measures will lead to savings of close to N180 billion per annum to be applied to critical areas including health, security and education.

 

2017 Budget Priorities

  1. Let me now turn to 2017 Budget. Government’s priorities in 2017 will be a continuation of our 2016 plans but adjusted to reflect new additions made in the Economic Recovery and Growth Plan. In order to restore growth, a key objective of the Federal Government will be to bring about stability and greater coherence between monetary, fiscal and trade policies while guaranteeing security for all.

 

  1. The effort to diversify the economy and create jobs will continue with emphasis on agriculture, manufacturing, solid minerals and services. Mid- and Down-stream oil and gas sectors, are also key priority areas. We will prioritise investments in human capital development especially in education and health, as well as wider social inclusion through job creation, public works and social investments.

 

  1. Our plans also recognise that success in building a dynamic, competitive economy depends on construction of high quality national infrastructure and an improved business environment leveraging locally available resources. To achieve this, we will continue our goal of improving governance by enhancing public service delivery as well as securing life and property.

 

The 2017 Budget: Assumptions, Revenue Projections and Fiscal Deficit

  1. Distinguished members of the National Assembly, 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.

 

  1. 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.
  2. 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.

 

  1. 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.

 

  1. 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. 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.

 

Expenditure Estimates

  1. The proposed aggregate expenditure of N7.298 trillion will comprise:

 

  1. Statutory transfers of N419.02 billion;
  2. Debt service of N1.66 trillion;
  • Sinking fund of N177.46 billion to retire certain maturing bonds;
  1. Non-debt recurrent expenditure of N2.98 trillion; and
  2. Capital expenditure of N2.24 trillion (including capital in Statutory Transfers).

 

Statutory Transfers

  1. We have increased the budgetary allocation to the Judiciary from N70 billion to N100 billion. This increase in funding is further meant to enhance the independence of the judiciary and enable them to perform their functions effectively.

 

Recurrent Expenditure

  1. 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; and
  • 87 billion for Ministry of Health.

 

  1. We have maintained personnel costs at about N1.8 trillion. It is important that we complete the work that we have started of ensuring the elimination of all ghost workers from the payroll. Accordingly, adequate provision has been made in the 2017 Budget to ensure all personnel that are not enrolled on the Integrated Personnel Payroll Information System platform are captured.

 

  1. We have tasked the Efficiency Unit of the Federal Ministry of Finance to cut certain overhead costs by 20%. We must eliminate all non-essential costs so as to free resources to fund our capital expenditure.

 

Capital Expenditure

  1. The size of the 2017 capital budget of N2.24 trillion (inclusive of capital in Statutory Transfers), or 30.7% of the total budget, reflects our determination to spur economic growth. These capital provisions are targeted at priority sectors and projects.

 

  1. Specifically, we have maintained substantially higher allocations for infrastructural projects which will have a multiplier effect on productivity, employment and also promote private sector investments into the country.

 

  1. Key capital spending provisions in the Budget include the following:
  • Power, Works and Housing: N529 billion;
  • 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;
  1. N100 billion has been provided in the Special Intervention programme as seed money into the N1 trillion Family Homes Fund that will underpin a new social housing programme. This substantial expenditure is expected to stimulate construction activity throughout the country.

 

  1. Efforts to fast-track the modernization 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 railway, and 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.

 

  1. Given the emphasis placed on industrialization and supporting SMEs, 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. 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 be revived in the form of tax credits to companies. This will further enhance the development of some agriculture and mining sector thereby bringing in more investments and creating more jobs. The sum of N20 billion has been voted for the revival of this program.

 

  1. Our small- and medium-scale businesses continue to face difficulties in accessing longer term and more affordable credit. To address this situation, a sum of N15 billion has been provided for the recapitalization 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.

 

  1. Agriculture remains at the heart of our efforts to diversify the economy and the proposed allocation to the sector this year is at a historic high of N92 billion. This sum will complement the existing efforts by the Federal Ministry of Agriculture and CBN to boost agricultural productivity through increased intervention funding at single digit interest rate under the Anchor Borrowers Programme, commercial agricultural credit scheme and The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending. Accordingly, our agricultural policy will focus on the integrated development of the agricultural sector by facilitating access to inputs, improving market access, providing equipment and storage as well as supporting the development of commodity exchanges.

 

  1. Government realizes that achieving its goals with regard to job creation, also requires improving the skills of our labour force, especially young people. We have accordingly made provision, including working with the private sector and State Governments, to establish and operate model technical and vocational education institutes.
  1. We propose with regard to healthcare to expand coverage through support to primary healthcare centres and expanding the National Health Insurance Scheme.

 

  1. The 2017 Budget estimates 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 (social housing scheme). The N-Power Programme has recently taken off with the employment of 200,000 graduates across the country, while the School Feeding Programme has commenced in a few States, where the verification of caterers has been completed

 

  1. As we pursue economic recovery, we must remain mindful of issues of sustainable and inclusive growth and development. The significant vote for the Federal Ministry of Water Resources reflects the importance attached to integrated water resource management. In this regard, many river-basin projects have been prioritized for completion in 2017. Similarly, the increased vote of N9.52 billion for the Federal Ministry of Environment (an increase of 92% over the 2016 allocation) underscores the greater attention to matters of the environment, including climate change and leveraging private sector funding for the clean-up of the Niger Delta.

 

  1. Provision has also been made in these estimates for activities that will foster a safe and conducive atmosphere for the pursuit of economic and social activities. In this regard, the allocation for the Presidential Amnesty Programme has been increased to N65 billion in the 2017 Budget. Furthermore, N45 billion in funding has been provisioned for the rehabilitation of the North East to complement the funds domiciled at the Presidential Committee on the North East Initiative as well as commitments received from the multinational donors.

 

Conclusion

  1. Mr. Senate President, Mr. Speaker, distinguished and honourable members of the National Assembly, I cannot end without commending the National Assembly for its support in steering our economy on a path of sustained and inclusive growth. This generation has an opportunity to move our country from an unsustainable growth model – one that is largely dependent on oil earnings and imports, to an economy that focuses on using local labour and local raw materials. We cannot afford to let this opportunity slip by. We must all put our differences aside and work together to make this country succeed. The people that voted us into these esteemed positions are looking to us to make a difference. To change the course of this nation. I have no doubt in my mind that by working together, we will put Nigeria back on the path that its founding fathers envisaged

 

  1. This Budget, therefore, represents a major step in delivering on our desired goals through a strong partnership across the arms of government and between the public and private sectors to create inclusive growth. Implementation will move to centre-stage as we proceed with the process of re-balancing our economy, exiting recession and insulating it from future external and domestic shocks.

 

  1. I thank you all for your patience and patriotism.

#2017Budget: House of Reps Speaker Dogara’s remark

PROTOCOLS:

It is a great honour and privilege for me on behalf of our colleagues in the National Assembly to also welcome Mr President, Muhammadu Buhari, GCFR, and his entourage to the National Assembly, on the occasion of the presentation of the 2017 Budget estimates.

2.     We give special thanks to all members of the National Assembly here present for according Mr President and his entourage a warm reception. To the management and staff of the National Assembly ably led by the Clerk to the National Assembly, Mohammed Sani-Omolori, our sincere thanks for organising this ceremony. Our thanks also go to all other participants, especially the media for their support, cooperation and understanding.

3.     We thank Mr President for the lofty goals enshrined in the Budget document just presented which is designed to take Nigeria out of economic recession and achieve significant economic growth for our nation.

4.     Mr President, Commander in Chief and my colleagues, I seek your indulgence to make a few remarks on the budget process, procedure and practice in Nigeria.

5.     It is certainly frustrating that we go through the annual Budget cycle/process: of Budget presentation by Mr President, processing of same by the National Assembly, passage and signing into law every year, without unlocking the full potentials of such Budgets for our citizens. This is because implementation and execution of the agreed Budget is always a major challenge year in year out. Sometimes, implementation rate is as low as 30%, most times it is never higher than 50% at the best of times. This has led to unacceptably high rate of abandonment of projects and distortions in Nigeria’s economic planning. Of course, this is an inherited problem for Mr President as he has only effectively passed through one Budget cycle.

6.     As I counseled last year, an Appropriation Act must be allowed to run for an uninterrupted period of twelve months, for the Executive to have enough time to execute it. This means that both Mr. President and the National Assembly must find a way to continue the execution of the 2016 Budget especially the capital component till May 6, 2017, which is twelve months from the date Mr President signed the 2016 Appropriation Bill. This is also the clear intendment of the definition of a Financial Year in Section 318 of the Constitution. The problem is that most often the recurrent component of the Budget is implemented to an appreciable level, but the capital component execution is very low.  It is crystal clear that the capital component of the 2016 Budget cannot realistically be implemented for only six months period considering the time required for procurement processes and the raising of the revenue including loans by government. Except something is done, this will result in yet another failed budget. A vicious cycle repeated every year. We must therefore put on our thinking caps and ensure that the change promised Nigerians is reflected in our budget process, as we cannot really make appreciable progress as a nation without significant implementation of the Capital component of the Budget.

7.     Your Excellencies, distinguished guests, ladies and gentlemen, kindly join me in urging Mr President to add distorted budget cycle and abandoned capital projects /white elephant projects, to the list of things, in addition to corruption, that he must kill.  This calls for creativity which cannot be realised if we do not lose our fear of being wrong. By being creative in this area, Mr President will build a new order that makes the existing order obsolete. There is no better way by which real change is attained.

8.     The real challenge before us is to make our annual budgets work for all our citizens, especially the poor and the vulnerable. This is a task all of us must be supremely devoted to. It was President J.F Kennedy, who in his timeless and resonating admonishment to the rich and powerful reminded us that, “if the society cannot help the many who are poor, it cannot save the few who are rich”. Sadly, this is fast becoming true of our society right now.

9.     In conclusion, let me, on behalf of my colleagues reassure Mr President of our continued cooperation and partnership in all measures proposed to revamp our economy and put smiles on the faces of our people. As representatives of our people, history will judge us harshly if we act as a stumbling block on the part of progress for our dear nation.

10.     May I, once again, thank everyone here for the many sacrifices that culminated into this huge success which we have all witnessed today. Let me, in advance and in arrears, wish all December Babies (beginning from Mr President, the President of the Senate and my humble self) Happy Birthday. For those of us who are not fortunate to have been born in December, I wish us all Merry Christmas and Happy New year in advance.

11.     May God bless the Federal Republic of Nigeria.

Buhari benchmarks #2017Budget against N305/$1

President Muhammad Buhari has benchmarked the 2017 budget at N305 per dollar, as against N197 to the greenback budgeted in 2016.

 

The N7.298 trillion budget also sets a benchmark of $42.5 per barrel of oil, as against $38 in 2016.

 

The budget, which is 20.4 percent bigger than that of 2016, has earmarked 30.7  percent for capital expenditure “to pull the economy out of recession”.

 

Again, the ministry of power, works and housing has the lion share of the budget, at N520 billion for capital projects.

 

More to follow…

President Buhari presents #2017Budget, says government will focus on infrastructure

President Muhammadu Buhari, on Wednesday, presented the 2017 Appropriation Bill to a joint session of the National Assembly, stressing that his administration will focus on infrastructure in the coming year.

 

Speaking during the presentation, the President said his administration will focus on infrastructure with more attention on road and rail.

 

He added that, “Though we cannot control the price of crude oil, we are determined to get our production back to at least 2.2million bpd.

“Facilitation of business and commerce must be the major focus of government agencies. Government must not become the bottleneck.

 

“In 2017, we will focus on the development of infrastructure, especially road and rail.

 

“During 2016, we conducted a critical assessment of the power sector, which is experiencing funding issues,” Buhari said.

 

Details Later…