Reps Demand Apology From Minister Over ‘Comments’ About 2019 Budget

Udoma denies blaming lawmakers for delayed budget presentation…

 

Reps Demand Apology From Minister Over ‘Comments’ About 2019 Budget
A file photo of lawmakers at the House of Representatives in Abuja.

 

The House of Representatives has raised concerns over comments allegedly credited to the Minister of Budget and National Planning, Senator Udo Udoma.

The matter came up during plenary on Thursday as a matter of privilege sponsored by Chika Adamu, seeking an apology from the minister and a retraction of the purported statement.

Senator Udoma was said to have accused the National Assembly of frustrating the presentation of the 2019 Appropriation Bill by President Muhammadu Buhari.

The majority leader of the House, Mr Femi Gbajabiamila, informed his colleagues that the minister claimed to have been quoted out of context.

But the Speaker of the House, Yakubu Dogara ruled that the minister be given time to retract or clarify the statement.

 

A file photo of the Minister of Budget and National Planning, Senator Udo Udoma.

 

Meanwhile, the Ministry of Budget and National Planning issued a statement in which it faulted the reports that the Senator Udoma blamed the lawmakers for the delay in the presentation of the budget.

Contrary to the reports, the minister’s media adviser, Akpandem James, explained that there was no time that Udoma gave an impression of any dispute between the lawmakers and the executive.

He stated that the minister stressed during a media chat that the executive would follow due process in the presentation of the budget.

Read the statement from the ministry below;

RE-FG blames NASS over delay in presentation of 2019 Budget

Going by the headlines in some news media today in respect of the presentation of the 2019 Budget to the National Assembly, it is obvious that some of the reporters misconstrued the response of the Minister of Budget and National Planning, Senator Udoma Udo Udoma, when he was asked when the budget would be submitted to the Legislature.

The Minister simply said that as is the procedure when the budget is ready, the Executive liaises with the National Assembly for a date which the Budget will be laid before the joint session of the Assembly; and that the process is on already.

The Minister at no time throughout the interaction with the media blamed the National Assembly for the delay in the presentation, nor gave the impression that there was any issue between the two arms of government over the 2019 budget.

Signed

Akpandem James

Special Adviser (Media and Communication) to the Hon Minister

FEC Approves MTEF, Proposes N8.73trn Budget For 2019

FEC Approves MTEF, Lagos-Badagry Expressway Repair Contract
President Muhammadu Buhari with Minister of Justice, Abubakar Malami; Minister of Agriculture, Audu Ogbeh; and Minister of Budget and National Planning, Udo Udoma, at the Federal Executive Council (FEC) meeting held in Abuja on October 24, 2018.

 

The Federal Executive Council (FEC) has approved the 2019 – 2021 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP).

Minister of Budget and National Planning, Udo Udoma, disclosed this to State House correspondents at the end of the FEC meeting on Wednesday.

He said the documents contain strategic plans which would help achieve the development objectives of the Federal Government’s Economic Recovery and Growth Plan.

The documents, according to him, would be transmitted to the National Assembly.

Senator Udoma also said that the MTEF was based on the assumptions of $60 per barrel, production of 2.2 million barrels per day, an exchange rate of N305 per dollar, and a Gross Domestic Product (GDP) growth of 3.01 per cent.

He revealed that the budget estimate for the 2019 fiscal year is N8.73 trillion.

Meanwhile, the Council approved a credit facility of $1.5million from the Africa Development Bank for the Abidjan-Lagos corridor road project.

It also approved a contract for the rehabilitation of the Lagos-Badagry Expressway, specifically the 46km Section from Agbara-Badagry-Seme Border.

President Muhammadu Buhari presided over the FEC meeting held inside the council chamber of the Presidential Villa in Abuja.

The meeting was attended by Vice President Yemi Osinbajo and the Secretary to the Government of the Federation, Mr Boss Mustapha.

Ministers present are Abubakar Malami (justice), Audu Ogbeh (agriculture), Lai Mohammed (information), Abdulrahman Dambazau (interior), and Chris Ngige (labour and employment) among others.

The Presidency gave the details of the meeting in the tweets below;

FG Seeks More Investment From UK

Udoma Highlights Priority Areas Of 2017 Budget

The Minister of Budget and National Planning, Senator Udo Udoma on Thursday said Nigeria will require more Foreign Direct Investment from the British government, to stimulate the country’s private sector.

Senator Udoma made this known at a meeting in Abuja, with a delegation of British government officials, led by the country’s Secretary of State for International Development, Priti Sushil Patel.

The British government delegation are in Nigeria to assess the situation in the country’s north east and address the situation, as well as other development initiatives.

In line with this, the minister acknowledged various interventions by the British government to ease some of the country’s challenges.

Udoma Highlights Priority Areas Of 2017 Budget

Udoma Highlights Priority Areas Of 2017 Budget
Udo Udoma

The Minister of Budget and National Planning, Udo Udoma, has highlighted the five execution priorities of the Federal Government in the 2017 budget.

The minister listed the areas to include agriculture and transport as well as the stabilisation of the micro economy among others.

He made the disclosure on Tuesday at a meeting with members of the Civil Society Organisations in Abuja, Nigeria’s capital.

Mr Udoma said the 2017 Appropriation Act, tagged a “budget of economic recovery and growth”, was designed to expand partnership with the private sector.

He further explained how the government plans to handle the over two trillion naira deficit in the 2017 budget.

The society groups, however, urged the government to immediately commence the implementation of the budget to alleviate the sufferings of the people.

The executive director of one of the groups and convener of the meeting, Clement Nwankwo explained how the implementation of the budget would affect the living condition of citizens.

The Federal Government budgeted N7.441trn for 2017 with a total revenue projection of N5.08trn.

FG Unveils Economic Recovery Plan For 2017-2020

FG Outlines Economic Recovery Plan For 2017-2020The Federal Government says the four-year Economic Recovery Growth Plan (ERGP) will help to stabilise Nigeria’s economy.

The Minister of Budget and National Planning, Senator Udo Udoma, told reporters on Tuesday that the four-year plan would focus on how to increase government’s revenues, in order to achieve its intended results.

Senator Udoma hinted that government was already working on tax review initiatives for the purpose of revenue enhancement.

The ERGP was formally launched by President Muhammadu Buhari on April 5, 2017 at the Presidential Villa in Abuja, the nation’s capital.

FEC Celebrates Acting President Osinbajo At 60

osinbajo The Federal Executive Council (FEC) has reiterated its commitment to getting Nigeria out of recession before the end of 2017‎.

The resolve was made during the FEC meeting chaired by the Acting President, Professor Yemi Osinbajo, who clocked 60 on Wednesday.

osinbajo2

Although members of the Council may not have rehearsed very well, they honoured Professor Osinbajo with a warm song.

The meeting was brought to a close with the cutting of the birthday cake as some of the ministers joined the Acting President in a photo session.

osinbajo1

Briefing journalists on the outcome of the meeting, the Minister of Budget and National Planning, Udo Udoma, said the 2017 budget has been structured to pull Nigeria out of recession.

The Minister added that the government was anxious to get the budget passed in order to begin its implementation.

He also noted that the release of the budget would fast-track the implementation of the Economic Recovery and Growth Plan (ERGP) recently released by the Ministry of Budget.

The Council thereafter, approved the contract for the construction of the Greater Abuja Water Supply Project at the cost of $470 million.

The Minister of the Federal Capital Territory (FCT), Mr Mohammed Bello, stressed the importance of the project to provide potable water to residents of the greater part of the FCT.

UN Security Council Meets With Osinbajo

UN Security Council Meets With OsinbajoNigeria’s Acting President, Professor Yemi Osinbajo, has assured the visiting United Nations Security Council mission that steps are being taken to ensure that human rights culture is institutionalised in the Nigerian Military to avoid negative reports of human rights abuse.

Professor Osinbajo said this during a closed door meeting with the UN delegation at the Presidential Villa in Abuja, the Federal Capital Territory.

He, however, noted that it was time for the international community to take another look at the international legal instruments and conventions that govern warfare and conflicts in the light of the unconventional and brutal operations of terrorists and insurgents around the world.

“We must, on a global scale look again at how to deal with these new challenges.

“We need to look at the governing conventions, as well as what type of legal categories and recognition of law we should give them.

“We need to re-examine how to deal with these individuals according to law,” the Acting President said in a statement issued on Monday by his spokesman, Laolu Akande.

He also assured the UN team that the Federal Government would progressively review the Rules of Engagement by the military and across the nation’s security system while taking human rights issues into consideration.

Professor Osinbajo added that President Muhammadu Buhari’s Social Investment Programmes which include the Conditional Cash Transfer, the GEEP Micro Credit scheme and the N-Power job programme would cater to the developmental needs of the northeast.

He said “we are already disbursing the cash transfers in some Internally Displaced Persons (IDPs) camps and host communities,” adding that the present administration was implementing a micro-credit scheme while using the Social Investment Programmes to resuscitate the local economies, including through the Anchor Borrowers’ plan for farmers.

The Acting President further urged the international community to support the Federal Government in the area of humanitarian response, describing the challenge as “massive”.

He hinted that the government was also in the process of passing a Northeast Development Commission bill that would deal with some of the long term developmental issues.

The Security Council members were led to the Presidential Villa by the UK Permanent Representative to the UN, Ambassador Mathew Rycroft.

The team comprises of all the five permanent members and 10 non-permanent members of the Security Council.

Speaking earlier at the meeting, Ambassador Rycroft praised the Nigerian Government for its handling of the humanitarian challenge in the Northeast.

He called for a long term developmental outlook in the region to address the issues of good governance, human rights, women’s participation, economic revival, education and jobs.

The delegation is leaving Nigeria with a pledge that the United Nations Security Council would play its role well in assisting the Nigerian Government to tackle the challenges in the conflict zones.

Briefing State House correspondents after the meeting, the Minister of Foreign Affairs, Mr Geofrey Onyeama, said the Federal Government is pleased with the tour of the northeast by the Council.

He assured the team that Nigeria would leverage on it to access all the funds needed for the rehabilitation of the IDPs in region.

The meeting was attended by some members of the Federal Executive Council and top government officials including the Minister of Defence, Major General Mansur Dan-Ali (rtd), and the Minister of Foreign Affairs, Mr Geoffrey Onyeama.

Others are the Minster of Budget and Planning, Udo Udoma; Minister of Water Resources, Suleiman Adamu; Minister of State for Environment, Ibrahim Jubrin; the National Security Adviser, Major General Babagana Monguno (rtd), and the Chief of Defence Staff, General Gabriel Olonisakin.

No Intention To Increase Taxes, Udoma Tells National Assembly

No Intention To Increase Taxes, Udoma Tells National AssemblyThe Federal Government says it does not have any intention of increasing taxes in Nigeria.

The government, however, said it was working towards increasing its internally generated revenue through the broadening of its tax base.

The Minister of Budget and National Planning, Senator Udo Udoma, made this clarification on Monday, while responding to a comment by Senator Ben Bruce, at the public hearing of the Joint Session of the National Assembly on the 2017 Budget.

The minister said “a view has been expressed that we should not increase taxes, that we should broaden tax collection instead. That is precisely what is in the budget”.

No Increase At All In Taxes

Senator Bruce had given the impression that the Federal Government was about to increase taxes, a development he said would further worsen the economic fortunes of individuals and businesses.

Mr Udoma stated that “there is no increase in Value Added Tax (VAT), there is no increase in company’s income tax (and) there is no increase at all in taxes.

“But people who are not paying taxes must be made to pay. So the idea is to increase revenue by broadening the tax base, not by increasing taxes”.

Some economic experts who spoke at the session advocated government spending its way out of recession, partnering the private sector to speed up growth, planning for sustainable development, working with the State governments for integrated development, involving relevant experts, as well as consulting widely in planning, monitoring and evaluation of projects among others.

The Minister told the gathering, which also include Civil Society Organisations and private sector operators, that all the views expressed by the speakers have been captured in the 2017 Budget.

“The concerns that have been expressed are reflected in the budget; the need to spend our way out of recession is reflected in the budget, the need to spend in a way that will attract private sector spending is also reflected in the budget.

“Indeed, the thrust of the budget is to partner with private and development capital to leverage and catalyse resources for growth,” he said.

Achieving Economic Growth

Mr Udoma said the government realised that public resources cannot be enough to drive the development process, which is why the 2017 Budget was directed at catalysing private sector resources and using PPP for a number of projects.

“If you look at housing, we are putting in 100 billion Naira, but we are expecting another 900 billion Naira from the private sector.

“If you look at the EPZ, we are putting in 50 billion Naira, but we are expecting a huge injection of funds from the private sector.

“So, this budget is aimed at achieving economic growth, aimed at achieving diversification, aimed at improving our competitiveness, aimed at improving ease of doing business, aimed at creating more jobs and social inclusion, and aimed at improving governance and security,” he explained.

According to the minister, the spending is targeted at areas that have quick transformative potentials such as infrastructure and agriculture, manufacturing, solid minerals and services among others.

He pointed out that the present government believes in planning, stressing that “when we came in, we came out with a document – the Strategic Implementation Plan for the 2016 Budget of Change.

“We set out short term plans for one year. We started working on a longer term plan for four years 2017 -2020; and that involved extensive consultation”.

Economic Recovery and Growth Plan

Senator Udoma, who touched on partnership with state governments, told the audience that the Federal Government has consulted severally with State governors and with Commissioners of Planning in all the states.

“We are working closely with the States. We even organised a retreat in February 2016 with all the states. In all our initiatives, we are working with the states.

“(Also) on agriculture, we are working with the states; we even have task forces that involve state governors. So, we are working together with the states,” he said in a statement issued by his spokesman, Akpandem James.

The minister spoke further on the Economic Recovery and Growth Plan where he pointed out that the government consulted the private sector extensively.

“Indeed, just last week we met twice with captains of industry and members of the private sector to sit down and expose the plan to them and get their input.

“We are going to council soon and subsequently the plan will be launched before the end of the month,” he said.

Mr Udoma further explained that because government has bold plans which are tailored towards pulling Nigeria out of recession, investors are changing their attitude towards Nigeria.

“People have heard of our plans; they have seen the plan because we have had extensive consultations with our development partners – with the World Bank, with IMF (and) with UNDP.

“They have all been exposed to our plan and we have shown them what we are determined to do (because) that is why people are believing in Nigeria and investing in the Eurobond,” he disclosed.

The Path Of Growth

The minister was emphatic that the government has a clear vision and is on a determined path to get the economy out of recession.

“We are determined thereafter to begin to go back to the path of growth, a more diversified growth, not depending just on crude oil.

“We want to stimulate our manufacturing sector, we want to stimulate agriculture; so we have a coherent, cohesive plan,” he said.

The Minister of State, Mrs Zainab Ahmed, on her part, said government was determined to ensure that Nigerians experience inclusive growth this time around, “which is why we have the social intervention programme.

“The social intervention programme took off fully in October 2016 and all the four components of the SIP have now been rolled out in their first phases and we are scaling up on a monthly basis.” she said.

Mrs Ahmed added that the programme would benefit greatly from the support of the National Assembly, in order to ensure that the benefits were distributed equitably and that no needy citizens were missed out.

Economy: Nigerian Manufacturers Demand Review Of Govt. Policies

Economy: Nigerian Manufacturers Demand Review Of Govt. PolicesThe President of the Manufacturers Association of Nigeria, Mr Frank Udemba, has expressed concerns about some government policies which he says may hinder the development of the economy.

He said this at the Presidential Villa where government officials, manufacturers and members of the private sector met to discuss issues on how best to make the economy work in the interest of ordinary Nigerians.

Speaking the mind of most businessmen and women in the hall, Mr Udemba listed the Central Bank’s policy on foreign exchange, lack of access to long term funding, multiple levies by government agencies and lack of infrastructure as some of the areas the federal government needs to revisit in its efforts to get the nation out of economic recession.

He, however, commended the government for its giant strides in ensuring adequate security across the country.

The Minister of Budget and National Planning, Udo Udoma, and the Minister of Finance, Kemi Adeosun also provided the perspectives from their ministries, providing explanations on the concerns raised.

Vice President Yemi Osinbajo was also present at the meeting and he explained why the meeting was necessary.

He highlighted the need to get the private sector fully involved in the effort to revive Nigeria’s economy as manufacturing remains a major area the country must develop.

It was the second time the Vice President would be holding the quarterly business forum.

Presidency Analyses 2017 ‘Budget Of Recovery And Growth’

2017 Budget Proposal, Udo UdomaThe Nigerian Government has presented a breakdown of its budget proposal for the 2017 fiscal year.

The analysis follows the presentation of a ‘budget of recovery and growth’ by President Muhammadu Buhari to a joint session of the National Assembly on Wednesday, December 14.

The budget is based on a crude oil benchmark price of $42.50 per barrel, with an output of 2.2 million barrels per day.

Government’s expenditure is to be funded with the sum of 4.94 trillion Naira while oil is to contribute 1.98 trillion Naira of the amount.

The breakdown was made on Monday by the Minister of Budget and National Planning, Senator Udo Udoma, at the National Assembly in Abuja, the Federal Capital Territory.

He assured Nigerians that the government had no plans to increase the Value Added Tax which is set at 5% in 2017.

The breakdown of the budget, as presented by the Budget Minister, is contained in the statement below:

PROTOCOLS

I am pleased to welcome you to the presentation of the 2017 Federal Government’s Budget proposal christened Budget of Recovery and Growth – the second full year Budget of this Administration, which was recently presented by the President to the National Assembly.

1.0  BACKGROUND AND CONTEXT

  1. As you are aware, the 2016 Budget was presented to the National Assembly (NASS) by Mr. President on 22nd December, 2015. The budget was however not signed into law until May 6, 2016; effectively therefore, the 2016 budget has only been operated for about 7 months.  Nevertheless, as will be evident from the review of the 2016 budget performance that I will get to shortly, we have made reasonable progress on its implementation.
  2. The 2017 Budget was presented to the National Assembly by His Excellency, Mr. President on 14th December, 2016. The budget reflects our commitment to restore the economy to the path of sustainable and inclusive growth.  Efforts have been made to ensure that the budget aligns with Nigerian’s Economic Recovery and Growth Plan (NERGP).
  3. My profound appreciation goes to His Excellency, President Muhammadu Buhari and His Excellency, the Vice President, Prof. Yemi Osinbajo under whose leadership the 2017 Budget was prepared. I also wish to thank my Cabinet colleagues for their understanding, especially as we all had to work within very tight schedules in the preparation of this budget.
  • REVIEW OF 2016 BUDGET PERFORMANCE
  1. The 2016 Budget, christened the Budget of Change was the first full year budget of the Buhari Administration. It was prepared against the background of general slowdown in global economic growth and massive decline in crude oil prices. It was based on the Zero Base Budgeting (ZBB) principle which requires that Ministries, Departments and Agencies (MDAs) justify every item of revenue and expense, as well as projects/programmes in the budget, a departure from the traditional incremental Budgeting approach that simply adjusts (usually upwards) amounts included in the previous budget. The 2016 Federal Government Budget was predicated on certain key parameters, including:

(i)       Benchmark oil price                  –        US$38/b

(ii)        Oil production                          –        2.2mbpd

(iii)       Exchange rate                          –        N197/USD

(iv)       Deficit (Fiscal Deficit to GDP ratio) – N2.20 trillion (2.14% of GDP)

(v)        Inflation                                   –        N9.81%

(vi)       GDP Growth Rate                      –        4.3%

 

2.1   2016 Budget Performance Against Set Target

  1. With respect to the 2016 Budget set targets, the performance as at Q3 of 2016 is as follows:
2016 Budget Performance against Set Targets
S/NoDescription(FY 2016 Budget)Q3 TargetActual (as at Q3 2016)
1Real GDP Growth (%, YoY)4.37-1.55
2.Oil Production (mbpd)2.21.81
3.Oil Price ($pb)3842.09
4.Inflation Rate (%)9.8117.85
5.Exchange Rate (N/$)197305
6.Revenue (N’trillion)3.862.892.17 (75%)
7.Expenditure (N’trillion) out of which;

(a) Capital Expenditure     N’trillion)

6.06

 

1.77

 

4.55

 

1.33

3.58 (79%)

 

0.75.6*(56%)

8Fiscal Deficit/GDP (%)-2.14-1.44

SOURCES: NBS Report: OAGF, Appropriation Act

*Capital spending as at end of October 2016 was N753.6 billion

2.2   Oil Revenue Performance in 2016

  1. The FGN’s oil revenues decreased sharply in 2015 and 2016 because of oil production shut-ins and sharp decline in oil price since 2014. The oil price steadied at an average of $110 per barrel from 2012 to 2014, but dropped to a record low of $29 per barrel in February 2016, a drop of  70%.  Although for most part of the year crude oil prices exceeded the 2016 benchmark price of US$38 per barrel, there has been a significant shortfall in projected revenue caused by the disruptions in crude oil production as a result of militant activity in the Niger Delta.

2.3   Revenue Performance As At Q3 2016

  1. The FGN’s 2016 revenues have been low because of the sharp decline in oil-production. In particular, the revenue target for January to September 2016 was N2.8 trillion as against the sum of N2.2 trillion realised during the period.  The projected independent revenue was N1.1 trillion as against N0.2 trillion realised during the period.  The projected revenue for Custom was N0.3 trillion as against N0.2 trillion realised, while the projected non-oil tax receipts for the 1st – Q3 of 2016 is N0.8 trillion as against N0.5 trillion realised during the period.

3.0   BACKGROUND TO THE 2017 BUDGET

  1. Global economic activities remained sluggish in 2016. In particular, Global GDP growth rate is projected at 3.1% for 2016 from 3.2% in 2015. Due to:

(i)     Lower-than-expected economic activity in the U.S

  • Uncertain economic, political and institutional implications of BREXIT
  • Slowdown in China’s growth
  • Weak demand in advanced economies and its spill-over effects
  • Geopolitical tensions in several countries
  1. In spite of the foregoing developments, the Global outlook remains bright. In this regard, global GDP growth rate is expected to rise to 3.4% in 2017.

3.2   The Domestic Environment in 2016

  1. The Challenges in the domestic environment include:

(i)     Crude oil production shut-ins resulting from vandalism of oil facilities.   In particular, 4 strategic oil fields affected including Trans-Niger Pipeline and Nembe Creek Trunkline axis as well as the Qua – Iboe Terminal

  • Insurgency in parts of the North East
  • Fuel shortages and increase in electricity tariffs, kerosene and PMS prices in the first half of the year
  • Foreign Exchange (FX) scarcity

 

  1. The foregoing factors have constrained fiscal operations, real sector activities, and the external accounts. Other challenges in the domestic economy included:

(i)     Contraction in growth         (-2.24% in Q3)

  • High unemployment rate (13.9% as at Q3)
  • Higher inflation rate (18.5% as at November 2016)
  • Pressures on foreign reserves ($25.04 billion as at 14th December)
  • Slow down in corporate sector resulting in lower credit quality and rising non-performing loans.

4.0    THE NIGERIAN ECONOMIC RECOVERY AND GROWTH PLAN (NERGP)

  1. A Medium Term Economic Recovery and Growth Plan (ERGP 2017 – 2020) is being finalised which addresses the current economic challenges and is aimed at restoring growth. The Plan builds on the existing Strategic Implementation Plan (SIP), and contains strategic objectives and enablers required to revive the economy.  The strategic objectives of the NERGP are: (i) Pulling the economy out of recession; (ii)        Investing in our people (iii) Laying the foundation of diversified, inclusive and sustainable growth.
  2. The NERGP focuses on 5 broad areas namely:

(i)     Macroeconomic Stability

(ii)    Competitiveness

(iii)   Growth and Diversification

(iv)   Social Inclusion

(v)    Governance & Enablers

 

  1. The 2017 Budget proposal reflects many of the reforms and initiatives in the SIP and NERGP and in the 2017-2019 Medium Term Sector Strategies (MTSS), as well as the 2017-2019 Medium Term Fiscal Framework. A Multi-criteria analysis (MCA) approach was adopted to prioritize and select 2017 capital projects for 14 large capital spending MDAs involved in the MTSS.  Projects were linked to government policies and strategic priorities.  MDAs that were not involved in the MTSS process used the Rapid Appraisal Project Identification and Prioritization System (RAPIPS). Zero-Base Budget (ZBB) principles were used in preparing the Budget. ZBB ensured that expenditures in the 2017 Budget are linked to government’s strategic reforms and initiatives for economic recovery.
  • APPROACH TO THE 2017 BUDGET
  1. The 2017 Budget is designed to expand partnership between public and private sectors, including development capital to leverage and catalyse resources for growth. Other key objectives of the 2017 Budget include:
    • focusing on critical on-going infrastructure projects such as roads, railways, power, ICT, etc., that have quick positive effects on the economy;
    • utilizing Special Economic Zones and Industrial Parks as vehicles to accelerate domestic economic activity for innovation and wealth creation;
    • contributing to food security and creating platform for agro-business in agriculture supply chains through the Agriculture Green Alternative Plan;
    • establishing a Social Housing Fund to deepen the mortgage system and expand its availability across all states of the Federation;
    • encouraging and stimulating the growth of small and medium scale industries for innovation, job creation, productivity and wealth creation; and
    • providing social safety nets for poor and vulnerable Nigerians.

 

  • KEY ASSUMPTIONS AND MACROFRAMEWORK FOR THE 2017 BUDGET

 

  1. The key assumptions and macro-framework for the 2017 Budget are:

(i)     Oil production                            – 2.2mbpd

(ii)    Benchmark oil price                    – US$42.5/b,

(iii)   Exchange rate                            – N305/US$

(iv)   Inflation rate                              – 15.74%

(v)    GDP Growth Rate                       – 2.5%

(vi)   Nominal Consumption (N’trillion)  – 87.95

(vii)   Nominal GDP (N’trillion)              -107.96

  

6.1   Key Budgetary Reform Initiatives

 

  1. The Key Budgetary Reform Initiatives to improve the revenue base of the country include:

 

  • Subjecting the JV operations to a new funding mechanism, which will allow for Cost Recovery. Additional oil-related revenue include: Royalty Recoveries, Marginal Field Licenses, Early licensing renewals, etc;
  • Sustaining the use of TSA to monitor the financial activities of over 900 MDAs from a single platform;
  • Broadening the tax base, improve effectiveness of revenue collecting agencies, improve tax compliance etc;
  • Reducing leakages by tacking trade mis-invoicing and introducing the single window to drive customs efficiencies;
  • Improving the performance of independent revenue of government by ensuring that all MDAs (particularly revenue generating MDAs) present their budget in advance, and remit their operating surpluses as required by the FRA;
  • Extension of the Integrated Personnel Payroll Information System (IPPIS) to all MDAs.

7.0   2017 Budget Revenue Proposals – Where the Money is Coming    From?

(a)    An Overview of the Revenue framework

  1. Based on the key assumptions and budgetary reform initiatives, the 2017 Budget envisages a total FGN revenue of N4.94 trillion, exceeding FY 2016 projection by 28%. The Projected revenue receipt from oil is N1.985 trillion and Non-oil is N1.373 trillion.  The contribution of oil revenue is 40.2% compared to 19% in FY 2016 driven mainly by JVC cost reduction, higher price, exchange rate and additional oil related revenues.
  2. The details of the revenue as summarised below:

7.1   2017 Budget Expenditure Proposals – Where The Money is Going

  1. The 2017 Budget has an outlay of N7.298 trillion. This represents an increase of 20.4% over the 2017 budget provision of N6.06 trillion.  The details are:
  • Statutory transfers of N419.02 billion
  • Debt service of N1.66 trillion (22%);
  • Sinking fund of N177.46 billion (2.4%) to retire certain maturing bonds;
  • Non-debt recurrent expenditure of N2.98trillion (40.8%); and
  • Capital expenditure of N2.24 trillion (30.7%) inclusive of statutory transfers.

 

7.2   Financing the Deficit

 

  1. The overall projected budget fiscal deficit of N2.36 trillion for 2017, which is about 2.18% of GDP. This is within the threshold stipulated in FRA.  The budget deficit is to be financed mainly by borrowings which have been projected at N2.32 trillion.  Of this amount, N1.067 trillion (46% of this borrowing) is intended to be sourced externally, while N1.25 trillion will be sourced domestically. The debt service to revenue ratio is projected to be about 33.7% in FY2017.

7.3   Break down of Recurrent (Non-Debt) Expenditure

  1. The Recurrent non-debt expenditure of N2.98 trillion is made up of:
  2. Personnel costs – N1.86 trillion    (63%)
  3. Overhead – N229.81 billion (7%)
  • Service-Wide Vote pensions                 – N89.98 billion   (3%)
  1. Consolidated Revenue Fund Pensions – N191.63 billion (6%)
  2. Other Service-Wide Votes – N116.50 billion         (5%)
  3. Presidential Amnesty Programme         – N65 billion       (2%)
  • Refund to Special Accounts – N50 billion, and (2%)
  • Special Intervention Prog. (recurrent) – N350 billion     (12%)
  1. The largest recurrent allocations are for the following four MDA’s namely:
  2. Ministry of Interior                 – N482.37 billion;
  3. Ministry of Education                 – N398.01 billion;
  • Ministry of Defence                 – N325.87 billion;
  1. Ministry of Health                 – N252.86 billion.

 

  1. These four MDAs collectively take up about N1.46 trillion (about 70% of the combined provision for personnel and overhead). They have the largest share because of the size of their personnel. Some of the agencies and parastatals under these MDAs are yet to be captured on the Integrated Personnel Payroll Information System (IPPIS) platform. The sum of N2 billion has been provided in the 2017 Budget for the capturing to ensure all personnel that are not enrolled on the platform are captured.

7.5   Capital Expenditure in the Proposed 2017 Budget

  1. The Administration has committed to allocating at least 30% of the Budget to Capital from 16% allocation in 2015. In dollar terms, the 2017 budget proposal at ($23.80bn) is lower than 2016 estimates ($30.76bn).  As a % of GDP, we have grown the size of the Budget from 4.7% in 2015 to 5.9% in 2016 and to 6.7% in 2017.  Compared with South Africa (20.7%) and Ghana (19.2%) as at 2015, this is very low.  The ratio of capital spending in total increased from 16% in 2015 to 30% in 2016 and 30.7% in 2017.  The increase in infrastructure spending is expected to enhance revenue generation opportunities and over time significantly reduce deficit.

 

7.6   MDAs Capital Allocations by Pillar

  1. A significant part of the budgeting provision was allocated to reflect the Administration’s development priorities. This is aimed at engendering good governance practices and providing enablers for economic recovery and growth. Some of the key sectoral capital allocations in the 2017 Budget are as follows:

(i)         Infrastructure                                     56%

(ii)        Governance and Security                     20%

(iii)       Economic Reforms/Growth                  12%

(iv)       Social Development                             7%

(v)                States and Regional Development         4%

(vi)       Environment                                       1%

 

7.7.  Major MDA Capital Allocations

  1. There is a need to emphasize that the thrust of the 2017 Budget is to partner with private and development capital to leverage and catalyse resources for growth. By setting aside N2.24 trillion (inclusive of capital in statutory transfers), which is 30.7% of the total budget for capital expenditure, the objective, as set out in the SIP, of devoting at least 30% of the budget to capital expenditure has been achieved. Much of the capital provision is directed at those projects which will facilitate economic growth, diversification, competitiveness, ease of doing business, social inclusion, jobs as well as governance. This will ultimately engender the attainment of the Sustainable Development Goals (SDGs). In this regard, focus will be on initiatives in sectors such as agriculture, manufacturing, solid minerals, and services. Consequently, capital allocations to MDAs within these sectors were significantly enhanced.
  2. The largest capital allocation goes to Federal Ministry of Power, Works and Housing – N564 billion (7.7%) (25% increase over 2016 estimate). To address contractors’ liabilities the Federal Government intends to issue over N2 trillion worth of bonds to clear outstanding contractors’ liabilities. These bonds would have a 10-year maturity and the amortisation is expected to begin in 2018. With regard to existing liabilities on bonds which were issued to contractors by past administration, we have set aside the sum of N177.46 billion in the 2017 budget as a sinking fund to retire the maturing bonds. The second largest capital allocation is for the Ministry of Transportation which has the sum of N277 billion.
  3. The 2017 Budget is an Infrastructure Budget. A total of N1.047 trillion is dedicated to key infrastructural spending, made up as follows:
  4. Power, Works and Housing:                 – N529billion;
  5. Transportation: – N262 billion;
  • Special Intervention Programmes: – N150 billion.
  1. Defence: – N140 billion;
  2. Water Resources: – N85 billion;
  3. Industry, Trade and Investment:      – N81 billion;
  • Interior: – N63 billion;
  • Education – N50 billion
  1. Universal Basic Education Commission – N92 billion
  2. Health:         – N51 billion
  3. Federal Capital Territory: – N37 billion;
  • Niger Delta Ministry:                          – N33 billion;
  • Niger Delta Development Commission – N61 billion
  • Agriculture – N91 billion

 

8.0   Strategic Focus of the 2017 Budget

  1. The thrust of the 2017 Budget is to partner with private and development capital to leverage and catalyse resources for growth. Much of the capital provision is directed at those projects which will facilitate:

(i)     economic growth

(ii)    diversification

(iii)   competitiveness

  • ease of doing business
  • jobs and social inclusion
  • improved governance and security
  1. The spending focus will be on critical economic sectors that have quick transformative potentials such as infrastructure, agriculture, manufacturing, solid minerals, services and social development.

8.1    New Initiatives in the 2017 Budget

  1. Some of the new initiatives introduced in the 2017 Budget are:
  • A new Social Housing Programme
    • N100 billion provisioned for a new Social Housing Programme towards a N1 trillion fund

 

  • Special Economic Zone Projects
    • N50 billion for Special Economic Zone Projects to be set up in each of the geo-political zones to drive manufacturing/exports

 

  • Export-Expansion Grant (EEG)
    • N20 billion voted for the revival of EEG in the form of tax credit

 

  • Recapitalization of Bank of Industry (BOI) and Bank of Agriculture (BOA)
    • N15 billion provisioned to support these development finance institutions to support Micro, Small and Medium Scale Enterprises (MSMEs)

 

  1. These new initiatives will support economic diversification and inclusion in our growth-drive.

8.2. Some Projects in the 2017 Budget

  1. The highlight of some of the projects in the 2017 Budget are as follows:
  • Power
  • N20bn Rural Electrification projects in Federal Universities
  • 7bn as counterpart funding for the construction of 3,050mw Mambilla hydropower project
  • 12bn for the completion of power evacuation facility for 400mw Kashimbila hydropower plant.
  • Housing
  • N41bn federal government National Housing Programme nationwide.

 

  • Works
  • Over 65 roads & bridges construction and rehabilitation projects across the 6 geo-political zones of the country.
  • N20bn nationwide intervention fund for roads.
  • 5bn for the rehabilitation/reconstruction and expansion of Lagos – Shagamu – Ibadan dual carriageway sections I & II in Lagos and Oyo states.

 

  • Education
  • N5 billion for the provision of security infrastructure in 104 colleges (Perimeter fencing, Solar Street light, solar powered motorised borehole & CCTV).

 

  • Transportation
  • 14bn for various railway projects (Lagos-Kano, Calabar-Lagos, Kano- Kaduna, Ajaokuta-Itakpe-Warri, Kaduna-Idu) / counterpart funds and other rail projects
  • 03bn for the construction of terminal building at Enugu airport.
  • 08bn for airside rehabilitation of Abuja airport.
  • 47bn for the construction of an inland river port and supply of cargo handling equipment at Baro, Niger State.

 

  • Health
  • 72 billion for joint venture investments in tertiary institutions with Nigeria Sovereign Investment Authority.
  • 65 billion for procurement of vaccines and devices.
  • 46 billion for Global Fund and GAVI counterpart funding.

 

  • Water Resources
  • 86 billion for water supply schemes nationwide.
  • 3 billion for construction and rehabilitation of dams nationwide.

 

  • Agriculture & Rural Development
  • 5bn Rural Roads and Water Sanitation programme
  • 61bn Promotion and Development Of Wheat Value Chain
  • 13bn Guaranteed Minimum Price payment.

 

 

  • Mines & Steel Development
  • 0 billion for the establishment of mega regulatory agency for the sector
  • N 2.58 billion for detail mineral resources evaluation, equipping national geo-science laboratories and other projects.

 

  • Communications
  • N1 billion for extension of government service portal and deployment of additional National Spectrum Management System.

 

  • Niger Delta
  • 55 billion for dualization of East-West Road {Sections 1 to 5 covering Warri – Kiama – Ahaoda – Port Harcourt – Eket – Oron – Calabar}.
  • N8 billion counterpart fund contribution for East-West road

 

  • Social Intervention Programmes
  • N500 billion for FGN Special Intervention Programme (including Home Grown School Feeding Programme, Government Economic Empowerment Programme, N-Power Job Creation Programme, Conditional Cash Transfers and Social Housing Fund).

 

  • Regional Interventions.
  • N65 billion for reintegration of transformed ex-militants under the Presidential Amnesty Programme.
  • N45 billion North East intervention fund.

 

  • SDGs
  • N20 billion for SDGs conditional grants and social safety nets.

 

9.0   CONCLUSION

  1. Nigeria is in recession. Inflation and unemployment have been rising. As a Government, we are determined to bring succour to our people. The only way we can do this is by taking strong action to change, in a fundamental way, the current trajectory of the Nigerian economy. This is not the time for a timid and cautious approach. This is a time for bold and focussed action. To get out of this recession and back on the path of growth, Government must find the resources to spend on infrastructure, and to spend to reflate the economy. This spending will help to stimulate and attract private sector capital and private sector spending. This is what the 2017 Budget proposals seek to do.
  2. We should not allow ourselves to be discouraged by those who say we can’t find the money to fund the spending required to implement this budget. We must, and we can, find the resources. We will challenge our revenue generating agencies, particularly the FIRS and Customs to improve their efficiencies and broaden their reach so as to achieve the targets set for them in the 2017 Budget. They must be tasked to leverage technology to drive revenue collection. We will be issuing new guidelines and templates for computing the operating surpluses of the various Government Agencies so that we can achieve the targets we have set for independent revenues.
  3. Most importantly, we must maximize the revenues we can generate from the oil and gas sector. We cannot determine the price of crude oil but we can engage more extensively with the communities and people of the Niger Delta to minimize disruptions to oil production. We can introduce creative measures to improve on the efficiencies in that sector so as to increase the Government take. Indeed, a Cabinet Committee has been set up by President Muhammadu Buhari to come up with innovative and creative ways to raise additional revenues from the oil sector, and other sectors, to support the funding of the 2017 Budget. The report of this committee will be ready in time for the National Assembly to take this into account in considering the Budget in the New Year, when they return from their Christmas recess.
  4. Finally, our experience this year shows clearly that we have not just a revenue problem, but specifically, a foreign exchange problem. We must find ways of solving our foreign exchange shortages. 95% of our foreign exchange comes from the oil sector so the work we are doing on improving the level of our oil sector receipts will certainly help.
  5. However, we need to do more than this. Much more. We must reduce the demand for foreign exchange by producing as much as possible of what we need in Nigeria. From refined petroleum products to textiles, clothing and most of our food items. But we will continue to need imported items so we must increase the supply of foreign exchange by tweaking some of our policies to make them more investor friendly, and by creating the right incentives for non-oil exports. Ultimately, the sustained growth of our economy must be on the back of an export led revival. The proposals in the 2017 Budget are aimed at creating the right incentives for Nigerians to achieve all these. The 2017 Budget proposals are therefore also a call to action.
  6. These are difficult times, no doubt. But with the indomitable spirit of the Nigerian we can turn these difficulties into opportunities. It is to that indomitable spirit that this Government now appeals. I am confident that Nigerians will respond to this call to action. To truly revive this economy, we must turn Nigeria into a nation of producers.
  7. I wish you all a Merry Christmas and a better New Year during which we shall get out of recession.

Udoma Says No Plans To Increase Value Added Tax

Udo Udoma, Value Added Tax, Budget BreakdownThe Nigerian government says it has no plans to increase the Value Added Tax which stands at 5% in 2017.

The government, however, said 11% of its projected revenue would come from recoveries of looted and misappropriated funds which currently stand at 258 billion Naira.

The Minister of Budget and National Planning, Senator Udo Udoma, on Monday allayed fears of possible tax increase, as the nation battles to recover from economic recession.

At a budget breakdown session in Abuja, Nigeria’s capital, Senator Udoma expressed optimism that the proposed revenues would help fund the 2017 budget.

The session follows the December 10 presentation of a budget proposal of 7.298 trillion Naira by President Muhammadu Buhari to a joint session of the National Assembly.

President Buhari proposed that the implementation of the budget be based on Nigeria’s economic recovery and growth strategy.

The 2017 budget is based on a crude oil benchmark price of $42.50 per barrel, with an output of 2.2 million barrels per day.

Government’s expenditure is to be funded with the sum of 4.94 trillion Naira while oil is to contribute 1.98 trillion Naira of the amount.

Greater Cooperation

Meanwhile, President Buhari, in a statement by his spokesman, Garba Shehu, solicited for greater cooperation between the executive and legislative arms of government.

He noted that the collaboration would ensure the smooth implementation of government policies and programmes.

The president said that despite the Principle of Separation of Powers, both arms of government should be united in the promotion of the common good of the people.

He added that whatever differences that might occasionally arise between the two arms of government should not be allowed to compromise their common goals of promoting the greater progress and development of Nigeria.

FG To Increase Health Budget In 2017 – Udoma

Budget, Udo Udoma, HealthThe Minister of Budget and National Planning, Udo Udoma, says that the Federal Government will increase budgetary allocation to the health sector in the 2017 budget, in its commitment to improving the sector in Nigeria.

Mr Udoma made this known when the Regional Director of World Health Organisation (WHO), Dr. Matshidiso Rebecca Moeti, visited him in his office in Abuja, Nigeria’s capital.

“This administration is committed to providing adequate fund for the health sector.

“We hope to upscale the budget for health next year compared to what is obtained in this year’s budget. Also we are designing effective policies to improve the sector,” he said.

While commending the WHO for aligning their programmes with government’s priorities, the Minister stated that healthcare provision was a top priority for the present administration.

He congratulated Dr. Moeti for being the first woman to hold the office of the WHO Regional Director and also praised her for fighting against diseases such as AIDS in Africa.

In an earlier speech, the WHO official commended Nigeria for its success in handling a number of diseases such as Ebola and also removing Nigeria from the list of endemic countries suffering from Polio.

She further solicited for efforts to sustaining the gains achieved so far.

“How Nigeria has successfully handled number of diseases like Ebola and Polio has been commendable especially in the area of preparedness, surveillance.

“We need to sustain the polio gain until totally removed,” she said.

Dr. Moeti said that WHO is pleased with Nigeria for identifying and making the health sector a top priority.