Nigeria’s Federal Government is now proposing a record N7.298 trillion budget for fiscal year 2017, some N17 billion more than the earlier N7.281 billion in the 2017 to 2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). The FG says the increase is in line with the higher exchange rate and the need to get Nigeria out of the current recession.
The government also presented a revised Medium Term Expenditure Framework (MTEF) to the Senate Joint Committee on MTEF on Tuesday, in which it retained the earlier proposed oil benchmark price for 2017 at $42.50, daily oil production volume at 2.2 million barrel, as well as exchange rate of N305 to the US$.
Udoma Udo Udoma, Minister of Budget and National Planning, presenting the revised MTEF document to a Joint Committee on Finance, Appropriations and National Planning, said the Federal Government will issue new oil licences, review the current joint venture arrangements with oil companies, review marginal oil fields and mount pressure on revenue generating agencies to surpass expected targets.
“The (first) MTEF/FSP was prepared in July. When we concluded work on MTEF we had not been in a recession, hence we updated it”, Udoma told the panel.
President Muhammadu Buhari is expected to present the 2017 Appropriation budget to a joint session of the National Assembly today.
Appearing before the Joint Committee on Finance, Appropriations and National Planning, Udoma said the Federal Government is targeting a total of N10 trillion in revenue during the 2017 fiscal year. Out of this amount, about N5 trillion will be generated from the sale of crude oil.
Non-oil revenues will rake in about N5.06 trillion. These revenues are expected to come from corporate and company taxes, Nigeria Liquefied Natural Gas, Stamp Duties, capital gains tax, value added tax, Customs, excise, fees, surcharges on luxury items, special levies and Federal Government independent revenue.
In next year’s budget, the government intends to borrow N2.356trillion, out of which N1.253trillion is for domestic borrowing, as against N1.067trillion for foreign borrowing.
On capital expenditures, the Federal Government budgeted N2.058 trillion. In the 2016 budget, the Federal Government, for capital projects, earmarked N1.587.
Recurrent expenditures will gulp N1.866 trillion. About N1.748 trillion was budgeted for the same purpose in the 2016 Appropriation.
Speaking further on the budget projections, Udoma said: “I know N7 trillion seems larger than N6 trillion. In actual dollar term, the 2017 budget is smaller. We have had challenges in revenue generation in funding the 2016 budget. We are trying to get to the bottom of revenue generating agencies in order to raise more money.
“On independent revenue, we need to work with the National Assembly. The issue of 80 percent of operating surplus is a problem. We need to work the National Assembly to review certain clauses of the law. We need to be more imaginative and creative in order to get out of the problem we have with revenue generating agencies.
“We want to issue a presidential order to ensure that revenue generating agencies are unable to spend money until their budgets are passed, unless for payment of salaries.
“We want to be more engaging in the Niger Delta to ensure that there is peace, in order for us to produce. We will be increasing the amount for the Amnesty Programme to the old figure. It is important to engage the people in the Niger Delta region.”
Other aspects of the budget show that the government hopes to realise N25billion from sales of government properties, N10billion from privatisation proceeds, N16trillion from Stamp Duties, N1.8trillion from Value Added Tax (VAT) among others.
The 2017 budget is a departure from $38 per barrel which was used for 2016 budget. The new exchange rate is significantly higher than that of 2016, pegged at $197 to a naira.
In 2016, the Federal Government submitted an ambitious N6.059 trillion proposal to the National Assembly. The Minister did not present any implementation report on the 2017 budget.
Senate President Bukola Saraki assured on Tuesday, that the upper legislative chamber was critically reviewing the contents of the revised MTEF documents with a view to producing a realistic budget for the 2017 fiscal year.
Saraki also declared that the Senate would not play the role of rubber-stamping the decisions of the executive arm of government as far as the task of preparing the budget is concerned.
Saraki told a visiting civil society organisation, Centre For Social Justice, at the National Assembly that the Senate placed much importance on the MTEF because it was the basis for producing the annual budget.
The CSO led by Eze Onyekpere, had requested the Senate to prevail on President Buhari to submit the Consolidated Debt Limit of the three tier of government in accordance with section 40 (1) of the Fiscal Responsibility Act. (FRA).
Onyekpere asked the Senate to amend the FRA to provide for punitive measures against any violation or breach of the Act.
He further urged the Senate to reject the $1billion Eurobond component of the loan request by the President stating, “it is purely a commercial loan which is clearly not within the contemplation of the FRA”.
OWEDE AGBAJILEKE
