Here all you need to know about Buhari's 2018 budget of consolidation.
The N8.6 trillion budget is christened ‘Budget of Consolidation’.
Speaking during the presentation, President Buhari noted that the principal objective of the federal government in 2018 would be to reinforce and build on our recent accomplishments.
Here’s all you need to know about the 2018 budget.
1. Key parameters and assumptions
The key parameters and assumptions for the 2018 Budget are as set out in the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). They include:
a. Benchmark oil price benchmark of US$45 per barrel;
b. Oil production estimate of 2.3 million barrels per day, including condensates;
c. Exchange rate of N305/US$ for 2018;
d. Real GDP growth of 3.5 percent; and
e. Inflation Rate of 12.4 percent.
Based on the above fiscal assumptions and parameters, total federally collectible revenue is estimated at N11.983 trillion in 2018. The three tiers of government shall receive about 12 percent more revenues in 2018 than the 2017 estimate.
Of the amount, the sum of N6.387 trillion is expected to be realized from oil and gas sources. Total receipts from the non-oil sector are projected at N5.597 trillion Naira.
The federal government’s estimated total revenue is N6.607 trillion in 2018, which is about 30 percent more than the 2017 target. In line with the goal of revenue diversification, non-oil revenues are expected to become a larger share of total revenues.
A total expenditure of N8.612 trillion is proposed for 2018. This is a nominal increase of 16 percent above the 2017 Budget estimate. Over 30 percent (2.652 trillion Naira) of aggregate expenditure (inclusive of capital in Statutory Transfers) was allocated to the capital budget.
A substantial part of the recurrent cost proposal for 2018 is for the payment of salaries and overheads in key ministries providing critical public services. They are:
a. N510.87 billion for Interior;
b. N435.01 billion for Education;
c. N422.43 billion for Defence; and
d. N269.34 billion for Health.
4. Capital Expenditure
According to President Buhari, many ongoing capital projects have been provided for in the 2018 Budget as parts of efforts to consolidate on the momentum of the 2017 Budget’s implementation.
“This is in line with our commitment to appropriately fund ongoing capital projects to completion. By allocating 30.8 percent of the 2018 Budget to capital expenditure, the Federal Government is also demonstrating its strong commitment to investing in critical infrastructure capable of spurring growth and creating jobs in the Nigerian economy,” Buhari added.
Key capital spending allocations in the 2018 Budget include:
a. Power, Works and Housing: N555.88 billion;
b. Transportation: N263.10 billion;
c. Special Intervention Programmes: N150.00 billion;
d. Defence: N145.00 billion;
e. Agriculture and Rural Development N118.98 billion;
f. Water Resources: N95.11 billion;
g. Industry, Trade and Investment: N82.92 billion;
h. Interior: N63.26 billion;
i. Education N61.73 billion;
j. Universal Basic Education Commission: N109.06 billion;
k. Health: N71.11 billion;
l. Federal Capital Territory: N40.30 billion;
m. Zonal Intervention Projects N100.00 billion;
n. North East Intervention Fund N45.00 billion;
o. Niger Delta Ministry: N53.89 billion; and
p. Niger Delta Development Commission: N71.20 billion.
5. Borrowing plan
New borrowings is estimated at N1.699 trillion. Fifty percent of this borrowing will be sourced externally, whilst the balance will be sourced domestically. The balance of the deficit of N306 billion is to be financed from proceeds of privatization of some non-oil assets by the Bureau of Public Enterprises (BPE).
6. Personnel Costs
Personnel costs is projected to rise by 12 percent in 2018. The federal government, however, maintained that it had made substantial savings by registering MDAs on the Integrated Personnel Payroll Information System (IPPIS) platform.
“The increase is mainly due to provision for staff promotion arrears, and recruitments by the Military, Police Force and para-military agencies. Furthermore, I have directed agencies are not to embark on any fresh recruitment unless they have obtained all the requisite approvals. Any breach of this directive will be severely sanctioned,” the president added.
Overhead costs is projected to rise by 26 billion Naira in 2018, a modest increase of about 12 percent reflecting inflationary adjustments. MDAs are required to adhere to government regulations regarding cost control.
7. Key projects
President Buhari noted that the following key projects and programmes would be implemented in 2018:
a. N9.8 billion for the Mambilla hydro power project, including N8.5 billion as counterpart funding;
b. N12 billion counterpart funding for earmarked transmission lines and substations;
c. N35.41 billion for the National Housing Programme;
d. N10.00 billion for the 2nd Niger Bridge; and
e. About N300 billion for the construction and rehabilitation of the strategic roads mentioned earlier.
8. Social Intervention Programme
President Buhari said a total of N500 billion has been allocated for the Social Intervention Programme. Under the programme, N100 billion Naira has been set aside for the Social Housing Programme.
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“This Administration remains committed to pursuing a gender-sensitive, pro-poor and inclusive growth. We are keenly interested in catering for the most vulnerable. Accordingly, we have retained the 500 billion Naira allocation to the Social Intervention Programme. Under the programme, 100 billion Naira has been set aside for the Social Housing Programme.
“Government will also continue to implement the Conditional Cash Transfer (CCT) programme, as well as the National Home-Grown School Feeding programme in 2018. These initiatives are already creating jobs and economic opportunity for local farmers and cooks, providing funding to artisans, traders and youths, as well as supporting small businesses with business education and mentoring,” he said.
9. Regional Spending Priorities for Peace, Security and Development
The president said a total of N65 billion was allocated for the maintenance of peace and security in the Niger Delta for economic and social activities to thrive.
“To maintain peace and security in the Niger Delta for economic and social activities to thrive, the provision of 65 billion Naira for the Presidential Amnesty Programme has been retained in the 2018 Budget. 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.
“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.
“Across the nation, and particularly in the North East region, our commitment to the security of life and property remains absolute. 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.
“Similar attention is being given to efforts to reduce violent crime across the country. The Nigerian Army was recently deployed to combat the growing scourges of cattle rustling and banditry that have plagued our communities in Kaduna, Niger, Kebbi, Katsina and Zamfara States. We will also continue to arrest the incidence of Armed Robbery, Kidnapping and other Violent Crimes across our nation," he said
President Buhari called on all Nigerians to shun hate speeches and cybercrimes.
In his remarks, Senate President Bukola Saraki cautioned the federal government against overpricing of projects.
He urged the federal government to focus on projects that would improve the living conditions of Nigerians.
His word: “We appreciate the need to spend, Mr. President. However, we must ensure that our borrowing is targeted at productive projects that will stimulate the economy. We must ensure real value-for-money in projects funded by borrowing, and make doubly sure that the projects are not overpriced.
“As we are all aware, many businesses were adversely affected by the recession; many lost their means of livelihood. As the country emerges from that period of uncertainty, the question on the lips of many Nigerians has been this: How does the recovery translate into tangible economic benefits for me?
“We must remember that the real gains must be felt on a personal level by the individual, for economic recovery to have meaning. People are seeking to get back to work but cannot find jobs. Entrepreneurs want to restart their businesses but are finding it difficult to access the needed capital. As for our farmers, the last thing they want is for produce to go to waste because people cannot afford to buy.
“Looking around today, we see that many of our undergraduates are apprehensive about their graduation day; and our National Youth Corps members are not looking forward to the end of the service year, for fear of being tagged ‘unemployed’. While I commend your current efforts at tackling unemployment - especially among the youth through Federal Youth Programmes such as YouWin, N-Power, and YES-Programme - deliberate steps must be taken to make the 2018 budget a job oriented one,” he added.
Speaker Yakubu Dogara called for a closer working relationship between the executive and legislature ‘so that the country can go far’.