Federal Government is targeting N11.983 trillion revenue from oil and non-oil sources in 2018 fiscal year.
From the sum, N6,128,290,144,686 is expected from oil sector while N5,596,745,945,657 is expected from non-oil subsector for the incoming year.
Total sum of N350 billion proposed for special interventions (recurrent); N2,597,246,628,719 is for capital expenditure for 2018 while deficit is pegged at N2,948,777,905,500 (2.61%) against N113,088,878,152,768 GDP.
The total oil production is pegged at 2.51 million barrels per day while budget oil production volume net incremental was pegged at 2.3mbpd; $45 oil benchmark; while exchange rate was pegged at N305/$ for 2018 fiscal year.
On the expenditure for the incoming year, National Judicial Council is to get N100 billion; Universal Basic Education (UBE) is to get N104,063,630,055; INEC is to get N45.5 billion; National Assembly is to get N125 billion; Public Complaint Commission is to get N4.2 billion; Human Rights Commission is to get N1.5 billion in 2018.
From total sum of N2,028,011,577,001 proposed for debt servicing, the sum of N1,764,125,038,534 is for domestic debt; N263,886,538,467 is for foreign debt while the sum of N220 billion is for sinking fund to retire maturing bond for local contractors.
From the total sum of N3,169,117,545,129 for recurrent expenditure, out of which N65 billion is for amnesty programme; N2,122,268,415,101 is for personnel cost of federal Ministries, Departments and Agencies (MDAs); overhead worth N245,200,853,273.
The fiscal deficit is to be maintained at 3% level as stipulated in the Fiscal Responsibility Act, 2007 but at an average if about 1.93% of GDP, but declining to less than 1% by 2020.
The total federally collectible revenue projection for 2019 and 2020 is expected to grow to N15,179,080,402,702 and N16,813,316,506,209 respectively.
The debt financing is also expected to be restructured gradually in favour of foreign financing while domestic financing is de-emphasised. This, while the proportionate share of foreign financing will increase from the current level of about 28% to almost 72% in 2020, domestic financing will decrease gradually from about 54% in 2016 to about 26% in 2020. This is expected to prevent the crowding out of the private sector and accord the private capital a lead role I’m driving growth.
According to the report seen by BusinessDay, efforts are geared toward non-oil tax revenue to GDP from the current rate of 6% to 15%.
“Aggregate national consumption is estimated at N90.48 trillion for 2018 from N83.84 trillion estimated for 2017, ongoing broadening of the tax base and collection efficiency. The VAT projections over the medium tree Rm are currently based on maintaining the rate at 5% while focusing intensely on broadening the coverage. In other words, the contemplated increase in the VAT rate on luxury items has not been factored into the projections. VAT collection is projected to increase by about 42% in 2018. Government may, however, review the VAT rate within the medium term period,” the report stated.
The 2018-2020 fiscal strategy of government is focused on broadening revenue receipts by identifying and plugging revenue leakages, improving the efficiency and quality of capital spending, greater emphasis on critical infrastructure, rationalization of recurrent expenditure and gradual fiscal consolidation to maintain the fiscal deficit below 3% of GDP as prescribed by the Fiscal Responsibility Act, 2007.
According to the document, the economy contracted marginally by 0.52% in Q1 2017 up from -1.73% in Q4 2016 and -1.58% for full year of 2016 as more economic sectors are recording growth or slower rate of contraction.
The oil sector also contracted by 11.64% while non-oil grew by 0.72% in Q1 2017, largely reflecting the growth recorded I agriculture and solid minerals, and recovery in manufacturing, construction and services sectors.
On the revenue for 2017 fiscal year, as at June 2017, N2,429.65 billion of the total revenue of N2,542 billion projected for first half year was realised, out of which N960.87 billion was realized from oil revenue against the prorate of N1,061.99 billion, implying a shortfall of 9%.
Meanwhile, total non-oil revenues which include: Corporate Income Tax, Value Added Tax, Customs Revenues, Federation Account Levies and Special Account balances, fell short of target by 49%. Customs revenue was the best performing non-oil revenue category with N132.97 billion collected.
The report further observed that the passage of the Petroleum Industry Governance Bill (PIGB) and introduction of new regulations consistent with the bill are expected to reduce uncertainties and further promote new private sector investments in the oil sector. Oil revenue is also expected to develop and diversify the economy, not just sustain consumption as was dine in the past.
On capital spending, the present administration projects to sustain allocation of 30% of the annual budget to capital projects.
