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President Muhammadu Buhari has presented the 2018 budget estimates tagged Budget of Consolidation”. The President presented a total budget expenditure of N8.61 trillion Naira.
Below is a breakdown:
Total expenditure– (N8.61trn)
Capital Expenditure – N2.04tn (30.8%)
Recurrent Expenditure (non-debt) – N3.49trn
Debt servicing – N2.014trn
Statutory transfer – N456bn
Sinking Fund (bonds) – N22bn
Revenue Projection – (N6.61trn)
Proposed Oil Revenue – N2.44tn
Proposed Non Oil Revenue – N4.16tn
Deficit (Borrowing) – N2.01trn
The budget proposal is based on the following assumptions:
- Benchmark Oil Price $45 per barrel
- Oil Production: 2.3mbpd
- Exchange rate: N305/$1
- Inflation Rate: 12.4%
Sector by sector breakdown
Power, Works and Housing : N555.88 billion
Transportation: N263.10 billion;
Special Intervention Programmes: N150.00 billion;
Defence: N145.00 billion;
Agriculture and Rural Development N118.98 billion;
Water Resources: N95.11 billion;
Industry, Trade and Investment: N82.92 billion;
Interior: N63.26 billion;
Education N61.73 billion;
Universal Basic Education Commission: N109.06 billion;
Health: N71.11 billion;
Federal Capital Territory: N40.30 billion;
Zonal Intervention Projects N100.00 billion;
North East Intervention Fund N45.00 billion;
Niger Delta Ministry: N53.89 billion; and
Niger Delta Development Commission: N71.20 billion.
Projects
2nd Niger Bridge – N10bn
Mambilla Hydro Power Project – N9.8bn
Construction and rehabilitation of strategic roads – N300bn
Transmission lines and substations – N12bn
National Housing Programme – N35.41 bn
On the events and developments that have shaped the economy in the last two years, and the plans ahead, below are some key points from the President’s speech:
“In 2016, this administration started allocating at least 30 per cent of our budget to capital expenditure. This is being maintained”
Oil Economy
“Despite the downturn in oil prices …. this administration was able to invest an unprecedented over N1.2 trillion in capital budgets through the 2016 budget”
“Despite low oil prices, this administration has invested additional $500million into the Sovereign Wealth Fund”
“Higher crude oil price supported our economic recovery in 2017”
External Reserves, Investments
“As at October 30, 2017, our external reserves increased to $34 billion”
“The Federal Government will be launching the first African Sovereign Trade Bond in December 2017”
Non-oil economy
“Bitumen exploration in Ondo is being executed”
“Crop production has been one of the main contributors to non-oil growth which rose to 0.45 per cent”
Railways, Roads
“We have pushed the Abuja rail project to 98 per cent completion in 18 months from 40 per cent”
“We have purchased 10 locomotives and two coaches for the Abuja-Kaduna rail line…we plan to commission this in December 2017”
“Over 766km were constructed or rehabilitated across the country in 2017”
“We have spent time in identifying alternative means of funding capital projects in the 2017 budget. For example, the N100 billion Sukuk financing for construction of 25 roads across the country”
Power
“Our power sector reform still remains a work in progress”
“In sourcing for alternative means of power, we have signed agreement with 14 solar companies”
Agriculture, Food security
“Food security is an important aspect of this administration’s security agenda”
“We will wage real war against Food Smugglers in 2018”
“Six crop processing zones will be established in 2018 to develop infrastructure for production and processing of crops”
“Investors and state governments will accelerate the cultivation of at least 6 staple foods to improve the production”
Senate President Bukola Saraki, before inviting the President to make his speech and present the budget, said: “It is pertinent to note that the implementation of the 2018 Budget – how it is implemented – will be a defining element of this Administration. We must therefore continue to work together to steady the ship of this recovery”
President Buhari expressed hope that all participants in the budget process will see that the budget cycle returns to January to December with the 2018 budget.
Below is an infographic on the last two budgets of the present administration: