The administration seeks to implement cost cutting measures and raise revenue to ward off the recession, the president yesterday submitted its Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2017 to 2019 to the National Assembly, in which it proposed a N6.866 trillion budget for the 2017 fiscal year.
It also proposed an oil benchmark of $42.50, average exchange rate of N290.00 to $1, and oil production volume of 2.2 million barrel per day (mbpd) for 2017.
In the document, the federal government also projected N6.847 trillion and N7.117 trillion budgets for 2018 and 2019, respectively, and $45 per barrel and $50 per barrel oil benchmarks for 2018 and 2019.
The government is also proposing 2.3mbpd and 2.4mbpd oil production volumes for 2018 and 2019, respectively, just as it projected an average exchange rate of N290.00 to $1 exchange rate for both years.
The proposed N6.866 trillion budget for 2017 is higher than the N6.060 trillion budget for the 2016 fiscal year, but the government set a revenue target of N4.169 trillion in 2017.
The government plans to generate revenue from the following sources: share of oil revenue – N1.3 trillion; share of dividends from Nigeria Liquefied and Natural Gas (NLNG) – N14.111 billion; mineral and mining – N1.064 trillion; non-oil revenue – N1.508 trillion; company income tax – N902.8 billion; value added tax – N282.2 billion; customs – N277.5 billion; and government share from Federation Account – N45.9 billion.
Other projected sources for funding the budget are N1.207 trillion independent revenue; N6.549 billion as government share of actual balance in special accounts; N9.086 billion as the federal government’s balances in special levies accounts; and N50 billion unspent balance from the previous fiscal year.
Of the N6.866 trillion proposed for 2017, the government hopes to spend N1.765 trillion as capital expenditure, N2.563 trillion on recurrent (non-debt expenditure), and N1.639 trillion for debt service.
Also, N350,000 billion has been budgeted for the recurrent Social Intervention Programme in 2017.
The government explained that whereas Nigeria’s total debt profile stood at N16.3 trillion as of June 2016, N3.19 trillion of the figure was external debt while N13.11 trillion was domestic, adding that the federal government owes 74.6 per cent of the debt stock while 25.4 per cent is owed by the 36 states of the federation.
In the MTEF, it said the inflation rate stood at 16.5 per cent in June 2016, noting that the increase was caused by the movement in price levels.
It also said the unemployment rate increased from 10.4 per cent in the last quarter of 2015 to 12.1 per cent in the first quarter of 2016, adding that the level of under-employment rose from 18.7 per cent in the last quarter of 2015 to 19.1 per cent in the first quarter of 2016.
The government also projected the gross domestic product (GDP) to grow at 3.02 per cent in 2017 while inflation is expected to decline to 12.9 per cent during the fiscal year.
“Also, consumption is projected to increase to N8.05 trillion. This growth will be supported by the envisaged improvement in the implementation of the capital budget and efficiency of funds utilisation to support domestic demand during the period,” the document said.
On macro-economic stability, the government said it plans to formulate policies aimed at guaranteeing formidable macro-economic stability capable of withstanding “external and domestic shocks”.
These policies, it said, would stimulate domestic production with the overall intention of securing investors’ confidence by creating a conducive business environment, productivity and inclusive growth.
It added that the budget would yet be built on the zero-based budgeting (ZBB) system introduced in 2016 but with a caveat that the budgeting process in 2017 would “be automated to minimise human interface and address other glitches experienced in the implementation of the first ZBB”.
The government also revealed that of the N6.060 trillion budget approved by the National Assembly for 2016, only N2.419.38 trillion had so far been spent as of June as recurrent and capital expenditure “with the shortfall in revenue inflow being made up by additional financing from borrowing and other sources”.
It also disclosed that N1.479.56 trillion had been released from the budget for recurrent expenditure for the payment of salaries, pensions and overheads which the federal government said was a little bit higher than the N1.323.19 trillion prorated for January to June.
It further added that as of July 18, 2016, only N331.58 billion had been released for the execution of critical infrastructure projects. The federal government also disclosed that of the projected N3.855.74 trillion revenue target in 2016, only N951.52 billion had been retained by the government as of June, a figure it said was less than 50.6 per cent of the prorated projection.
The federal government said it predicated the shortfall on under-performance of non-oil sources, adding that independent revenue and the federal government’s share of company income tax (CIT) collections were less than the N646.32 billion and N271.76 billion projected, respectively.
The government promised to improve revenue mobilisation from the non-oil sector in 2016, promote transparency and accountability, pursue sustainable debt management, intensify economic diversification, enhance infrastructure for increased productivity and development, improve governance, and pursue a social development programme.
(Thisday )
