Buhari cuts deficit, presents N8.6trn budget 2018

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ABUJA— President Muhammadu Buhari, yesterday, presented the 2018 budget to the National Assembly, indicating a 15 per cent scale back on total deficit at N2.005 trillion, down from N2.36 trillion stated in 2017 budget.

Bihari cuts deficit, presents N8.6trn budget  2018
Bihari cuts deficit, presents N8.6trn budget 2018

At a total expenditure estimate of N8.612 trillion, the deficit amounted to 1.77 per cent of the nation’s Gross Domestic Product, GDP, a 17.3 percentage point drop from 2.14 per cent deficit to GDP stated in 2017 budget.

Of the N8.612 trillion proposed for 2018, 30.8 per cent (or 2.652 trillion Naira) of aggregate expenditure (inclusive of capital in Statutory Transfers) has been allocated to the capital budget.

This indicates that the government was optimistic of stronger revenue inflow against borrowings to fund the budget, much in line with the government’s plans under the Economic Recovery and Growth Plan, ERGP, aimed at progressively reducing deficit and borrowings.

Buhari, who tagged the 2018 Budget as that of ‘Consolidation’, said it is expected to consolidate on the gains of the 2017 budgets, noting that it will help “to actualise the economic growth recovery plan of this administration.” He added:  “2018 is expected to be a year of positive and better outcomes.”

Buhari revealed that the government plans to finance the deficit partly by new borrowings estimated at N1.699 trillion while 50 per cent of the borrowing would be sourced externally, adding that the balance would be sourced from domestic financial market.

According to him, the balance of the deficit of N306 billion is to be financed from proceeds of privatisation of some non-oil assets by the Bureau of Public Enterprises (BPE).

He also said the 2018 budget was based on a crude oil benchmark price of US $45 per barrel, with an output of Oil production estimate of 2.3 million barrels per day, including condensates, as against that of 2017 which was of $42.50 per barrel, and output was put at 2.2 million barrels per day.

The President said the Exchange rate of N305/US$  was set for 2018, while Real Gross Domestic Product, GDP growth of 3.5 per cent was projected and inflation Rate of 12.4 per cent.

Budget breakdown

Breakdown of the proposed N8.612 trillion of 2018 Aggregate Expenditure comprises a Recurrent Cost of N3.494 trillion; Debt Service of N2.014 trillion; Statutory Transfers of about N456 billion; Sinking Fund of N220 billion (to retire maturing bond to Local Contractors) and Capital Expenditure of N2.428 trillion (excluding the capital component of Statutory Transfers).

President Buhari, noted that the government has provided for, in the 2018 budget, many on going projects as part of moves to consolidate on what he described as the momentum of the 2017 Budget’s implementation.

He said: “This is in line with our commitment to appropriately fund ongoing capital projects to completion. By allocating 30.8 per cent 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.”

The President listed the key capital spending allocations in the 2018 Budget to include: Power, Works and Housing with a hefty allocation of N555.88 billion; Transportation with an allocation of N263.10 billion; while Special Intervention Programmes will gulp N150.00 billion in the budget proposal.

Others are Defence with N145.00 billion; Agriculture and Rural Development with N118.98 billion allocation; Water Resources has N95.11 billion; Industry, Trade and Investment was allocated N82.92 billion; Interior has N63.26 billion allocation while; Education N61.73 billion.

Universal Basic Education Commission is allocated N109.06 billion; Health, N71.11 billion; Federal Capital Territory has N40.30 billion allocation; Zonal Intervention Projects was allocated N100..00 billion; North East Intervention Fund has N45.00 billion; Niger Delta Ministry was allocated N53.89 billion; and Niger Delta Development Commission: N71.20 billion.

According to him, a substantial part of the recurrent cost proposal for 2018 has been set aside for the payment of salaries and overheads in key Ministries providing critical public services such as N510.87 billion for Interior; N435.01 billion for Education; N422.43 billion for Defence; and N269.34 billion for Health, adding that “the allocation to these Ministries represent significant increases over votes in previous budgets.”

President Buhari noted that the estimates for personnel costs rose by 12 per cent in 2018, stressing that government has made substantial savings by registering MDAs on the Integrated Personnel Payroll Information System (IPPIS) platform.

He said:  “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 not to embark on any fresh recruitment unless they have obtained all the requisite approvals. Any breach of this directive will be severely sanctioned.”

Overhead cost, he said “is projected to rise by 26 billion Naira in 2018, a modest increase of about 12 per cent reflecting inflationary adjustments. MDAs are required to adhere to government regulations regarding cost control.”

Atmospherics on 2018 budget presentation

Earlier, before the President presented the budget, members of the House of Representatives had gone into a closed door executive session.

It was not certain what dominated the discussion which started by 11 am and ended at about 1:00 pm.

At 1:05 when the door was finally opened for Journalists, the Majority Leader of the House, Hon. Femi Gbajabiamila moved a motion suspending the House Rules to receive the President.

He said: “That the House, pursuant to Order 19, Rule 8 (1) and (2) of the Standing Orders of the House of the Representatives, do admit Mr. President, and his entourage, to address a Joint Sitting of the National Assembly to present the 2018 Budget Estimates at 2..00 p.m.”

Gbajabiamila’s motion was seconded by the Deputy Majority Leader, Hon. Bubu Jubri.

This was also followed by another call from the Speaker, Dogara to Gbajabiamila to move a motion to enable the House proceed on a brief recess.

Responding, the House Leader said:  “I rise to move a motion that the House adjourn to 1:20pm today.”

The motion which was also seconded by his deputy was later put to a voice vote by the Speaker.

Securing a positive nod from the members, Dogara said: “I think we take a brief adjournment and freshen up to return at 1:20.”

The House later adjourned but many of the lawmakers didn’t leave the chamber.

By 1: 43, the House had become full with people.

At about the same time, Vice President Yemi Osinbajo walked into the Chamber.

His entry was accompanied by the singing of National Anthem by the Nigerian Army Band which later continued to provide some scintillating tunes that apparently soothed the Green Chamber.

At 1: 45pm, Speaker Dogara returned to the Chamber and quietly took his seat.

Similarly, the Senate President, Bukola Saraki entered the chamber and took his seat kept side-by-side with that of the Speaker at 1:57 pm.

By 2:01, the hall stood up for the President who was ushered in amidst another marching tune from the Army Band.

Arriving the podium, the President shook hands with Saraki and Dogara and took his seat.

Then came the national anthem which was succeeded by prayers from a Christian member of the House and a Muslim from the Senate.

Giving his speech after the prayers, the Senate President, who acknowledged the early presentation of the budget, however, said that the early presentation was dependent on the cordial relationship between the Legislative and Executive arms of government.

NASS tasks executive on steps to make 2018 Budget job-oriented

In his remarks, Senate President, Bukola Saraki, tasked the executive arm of government to take deliberate steps to make the 2018 Budget of N8.612 trillion a job-oriented one.

Saraki, who is the chairman of the joint National Assembly session, said while it was commendable that the present administration was making efforts at tackling unemployment through programmes like YouWin, N-Power, and YES-Programme, steps must be taken to make the 2018 budget a job-oriented one.

“Looking around today, we see that many of our undergraduates are apprehensive about their graduation day.

“Our National Youth Corps members are not looking forward to the end of the service year, for fear of being tagged ‘unemployed’.

“As we are all aware, many businesses were adversely affected by the recession and many lost their means of livelihood.

“So, as the country emerges from that period of uncertainty, the question on the lips of many Nigerians has been how does the recovery translate into tangible economic benefits?

“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 capitals. For farmers, the last thing they want is for what they produce to go to waste because people cannot afford to buy,” he said.

He called for the implementation of the procurement law, with emphasis on support for Made-In-Nigeria goods.

He stressed that the implementation of the 2018 Budget must anchor on the Made-In-Nigeria project, adding that it should be reflected in government procurement in 2018.

Saraki stressed that the National Assembly was working towards reviewing the Procurement Act to achieve the goal, adding that it would be in vain not to eliminate unnecessary bureaucracy in the procurement process.

“Government should continue to create the enabling environment for private sector businesses to thrive through its policies and spending priorities.

“As we pat ourselves on the back that Nigeria has made a quantum leap, going up 24 places in the World Bank Ease of Doing Business ranking, we cannot rest on our laurels.

“There is a need to complement reforms in the ease of doing business with targeted spending on those critical infrastructure projects that enhance economic activity and job creation.

“In view of this, we must move beyond budgetary provisions without adequate funding available for the execution of projects and ensure that selection of contractors, as well as release of funds, are transparent.

“We must, therefore, make project completion a top priority, especially those projects that directly impact the lives of our people.

“On our part, the 8th National Assembly is standing firm on its objective of expanding economic opportunities through economic reform bills that we have prioritised.

“Some of these are beginning to affirm the vision of reforms that we need in order to move our country forward,” he said.

On mainstream social inclusion, Saraki stressed the need for equity and balanced development across the entire country.

He said infrastructural development should be seen to be well distributed to create growth pools away from the major city centres and drive the regeneration of our rural areas.

He pointed out that agriculture, for instance, would be meaningless without engaging in farming in the countryside.

“The current rate of rural-to-urban migration is alarming and unsustainable, congesting the cities and stretching resources to breaking point, while undermining the economic viability of some states.

“People must be able to see a future for themselves in every corner of this country, not just in the big cities.

“There are big ticket projects like power, rail and A-Trunk roads; but also, there are smaller projects which impact people’s lives. We must do both. Those in charge should ensure proper execution or face sanction.

Full implementation of 2017 budget

“It is important that I emphasise that the presentation of the budget should in no way dampen enthusiasm for the implementation of the 2017 Budget.

“Whatever needs to be done to ensure that we achieve close to full implementation of the budget, is what must be done.”

Saraki called for a good working relationship between the executive and the legislature, adding that the early passage of the 2018 Budget would depend on the working relationship between the two arms of government.

He said the passage of important Executive bills that would improve ‘ease of doing business’ was also dependent on the relationship between the legislature and executive.

“The 469 members in this chamber are your true partners that will ensure the success of your administration in achieving its goals and objectives.

“So, lobby them, close ranks and let them work for you.

“Let me assure Mr. President that in considering the 2018 Budget proposal, the National Assembly will work with your team, as we are convinced that more can be achieved together.

He called on parastatals and agencies that were meant to submit their budgets alongside the 2018 Budget Proposal presentation, as stipulated by the constitution to do so.

He said parastatals and agencies that failed to submit their budgets along side the 2018 budget would be sanctioned and denied access to capital expenditure.

He assured that the assembly would work to ensure that these were passed by the end of the year.

Why we received 2018 budget – Reps

At the backdrop of displeasures amongst most members of the House of Representatives over the 2017 budget, Speaker of the House of Representatives, Yakubu Dogara, yesterday, said that members of the parliament displayed high sense of patriotism by ignoring their hazy relationship with the Executive arm to receive the 2018 budget estimates presented by President Muhammadu Buhari.

He said given a healthy atmosphere between both arms, there was no national challenge Nigeria cannot overcome.

Dogara made the assertions while delivering his remarks at the occasion of the presentation of the 2018 Budget Estimates by President Muhammadu Buhari at the National Assembly.

He commended members of the National Assembly for displaying true leadership qualities and providing a peaceful environment for the President.

He said the Constitution stipulates that the three arms of government must work hand in hand on any major national issue, adding that failure to do so meant retrogression.

He said:  “This is the way we must go as our Constitutional Order is organised in a way that deliberately denies any of the three arms the strength to go at it alone on any major national issue.

‘’Where that has happened, it’s progress that suffers. That reminds us of the adage that says.  If you want to go fast, go alone but if you want to go far, go together.

“Examples abound on how fast but not far, the Executive have gone on some national issues where they have decided to go alone. There is no national challenge we cannot overcome if we work together.

“To our colleagues, members of the Senate and House of Representatives, I salute your patriotism and sense of national purpose in providing the peaceful enabling environment for Mr. President to deliver his Budget address.

“The success of this event separates us as true Leaders who in the midst of a hazy Executive – Legislative relationship elected not to turn on ourselves but to turn to each other in the very interest of our constituents and national progress.”

Dogara also acknowledged the input of the newly appointed Secretary to the Government of the Federation, Mr. Boss Mustapha, who, in an unprecedented move, visited the leadership of both Chambers of the National Assembly to canvass support for government policies and to strengthen the often strained Executive – Legislative relations.

Warns against abandoning 2017 budget

The speaker, however, warned that the 2017 budget must not be abandoned by the Executive arm.

He said:  “Mr. President, as legislators, what agitates us is the prospects of totally abandoning the 2017 Budget and the dire consequences of doing so.

“The questions that must be answered include whether we have effectively enforced 2017 fiscal targets and whether managers have complied with the budget as authorized by the legislature.

“Our experience with the implementation of the 2016 Budget amply demonstrates that obeying our Appropriation Laws maximises the release of our potentials while violating the Appropriation Laws caps the release of our national potentials.

“This means that we have to redouble our efforts in implementing the 2017 Budget, if we must retire it in January or, at the very least, roll over most of the projects in 2017 budget to 2018. No need to remind us that fiscal indiscipline is as grievous as corruption which this government is busy eliminating.”

While commending President Muhammadu Buhari for honouring the provisions of the 2016 Appropriation Act which required the budget to last for 12 months in line with the provisions of Section 318 of the Constitution, from May 2016 when it was assented to, to May 2017, the Speaker said the singular act “enabled the Executive to report an accomplishment of over N5 Trillion expenditure out of the N7.4 Trillion budgeted for 2016, an unprecedented record by all standards, made possible only because the execution of the budget was allowed to last for 12 months. That is what the National Assembly has always called for in line with the original intent of the framers of our constitution.

The speaker, however, noted that the executive did not consult adequately on the preparation of 2018 budget.

Buhari

“Once again, let me place it on record that the 2018 Budget preparations suffer from inadequate consultations between the MDAS and various over- sighting Committees of the National Assembly. Consequently, one can only hope and pray that it does not lead to delay in consideration and passage of the Budget”, he said.

Lauds Buhari on exit from recession

Commending the president for leading Nigeria out of recession, the Speaker also called for policy consistency and synergy between all stakeholders in order to sustain economic growth and development, and a full implementation of the Economic recovery and Growth Plan launched in January 2017.

“May I also use this opportunity to congratulate Mr. President for leading Nigeria out of recession. Although recession has technically ended, most Nigerian families are still struggling. As a Government, we must do all within our powers to hasten their long night of panic and fear into a glorious morning.

“We must never allow this nation to slide into recession, not now, not ever again. We cannot therefore discountenance policy consistency and synergy between all stakeholders, if we must sustain economic growth and development, going forward.

“Mr. President, I urge that you take no prisoners in the implementation of your well crafted and thought-out Economic recovery and Growth Plan which you launched in January 2017,” Dogara said.

 

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