- Nigeria is estimating a total revenue at N6.97 trillion.
- A total expenditure of N8.83 trillion is estimated for 2019.
- Nigerian government set aside N305 billion ($1 billion) for fuel subsidies in 2019.
President Muhammadu Buhari on Wednesday presented $28.80 billion (N8.83 trillion) budget for 2019 to the National Assembly for scrutiny.
This is President Buhari's fourth and last budget for his first term in office as he is also seeking re-election for the February 2019 presidential poll.
The 2019 budget is placed on the following assumption:
a. Oil price benchmark of $60 per barrel;
b. Oil production estimate of 2.3 million barrels per day, including condensates;
c. An exchange rate of N305/$;
d. Real GDP growth of 3.01%; and
e. Inflation Rate of 9.98%.
Business Insider Sub-Saharan Africa looks at the key figures in Nigeria's 2019 budget, dubbed, Budget of Continuity.
Key macroeconomic figures
Revenue – Where government is making money
Nigeria is estimating a total revenue at N6.97 trillion (which is 3% lower than the 2018 estimate of N7.17 trillion), consisting of oil revenue projected at N3.73 trillion while non-oil revenue is estimated at N1.39 trillion.
Projected revenue from taxes
Companies Income Tax (CIT) - N799.52 billion
Value Added Tax (VAT) - N229.34 billion
Customs Duties - N302.55 billion.
Independent Revenues to N624.58 billion.
Other revenues expected in 2019 include various recoveries of N203.38 billion, N710 billion as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of N104.11 billion.
By implication, this shows Africa's largest economy with crude oil as its cash cow will still do below average on its diversification policies as oil takes centre stage in government revenue.
Fuel subsidy continues
In the 2019 budget proposal, Nigerian government set aside N305 billion ($1 billion) for under-recovery by NNPC on PMS in 2019.
Clarifying controversies surrounding the fuel subsidy regime in Nigeria, President Buhari said the removal of subsidies by past governments was abuse with corruption as 'some marketers falsified claims”.
“Now the government through the NNPC is the sole importer of PMS and therefore, the under-recovery is from the NNPCs trading account,” he said during a presentation to the National Assembly on Wednesday.
Expenditure – How much government is spending in 2019
A total expenditure of N8.83 trillion is estimated for 2019. This includes grants and donor funds of N209.92 billion. This provision is less than the 2018 FGN appropriated expenditure estimate of N9.12 trillion. However, it is higher than the N8.6 trillion originally proposed by the Executive Branch to the National Assembly for 2018.
The budget deficit is projected to decrease to N1.86 trillion (or 1.3% of GDP) in 2019 from N1.95 trillion projected for 2018. This reduction is in line with our plans to progressively reduce deficit and borrowings.
The proposed N8.83 trillion of 2019 Aggregate Expenditure comprises
a. Recurrent Costs of N4.04 trillion;
b. Debt Service of N2.14 trillion;
c. Statutory Transfers of about N492.36 billion;
d. Sinking Fund of N120 billion which will be used to retire maturing bond to local contractors;
e. Capital Expenditure of N2.031 trillion including capital supplementation but excluding the capital component of Statutory Transfers.
A further breakdown of who gets what and for what will be released by the Budget office later.
The government set aside the sum of N2.14 trillion for debt servicing. Of this amount, 80% is to service domestic debt which accounts for about 70% of the total debt.
Nigeria owed combination of local and foreign organisation more than $73 billion as at June 2018.
A substantial part of the recurrent cost proposal for 2019 is for the payment of salaries and overheads in Ministries providing critical public services such as
a. N569.07 billion for the Ministry of Interior;
b. N435.62 billion for the Ministry of Defence;
c. N462.24 billion for the Ministry of Education; and
d. N315.62 billion for the Ministry of Health.
Personnel costs will take 40% of the projected revenue for 2019, estimated at N2.29 trillion.