PROTOCOLS
1. I am here to present 2018 Budget Proposals. Before presenting
the Budget, let me thank all of you Distinguished and Honourable Members of the
National Assembly, and indeed all Nigerians, for your support and prayers for
my full recovery while I was on medical vacation.
2. I am very pleased to address this Joint Session of the
National Assembly, on the revenue and expenditure estimates, and related
matters, of the Federal Government of Nigeria for the 2018 fiscal year.
3. The 2018 Budget will consolidate on the achievements of
previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan
(ERGP) 2018 – 2020.
OVERVIEW OF ECONOMIC DEVELOPMENTS IN 2017
4. 2017, so far, has been a year of uncertainty on many fronts
across the world. Whether it is Brexit, the crisis in the Korean Peninsular, or
indeed, the political uncertainty in key oil producing nations of the Middle
East and South America, we can all agree that these developments have in one
way or another impacted Nigeria’s economic fortunes.
5. By all accounts, 2018 is expected to be a year of better
outcomes. The tepid economic recovery is expected to pick up pace and the
global political terrain is expected to stabilize. The International Monetary
Fund (IMF) is anticipating global GDP growth of 3.7 percent in 2018. Emerging
markets and developing economies are expected to lead with GDP growth of 4.9
percent, while advanced economies are projected to grow at a slower rate of 2
percent.
6. Nigeria’s journey out of the recent recession was a revealing
one. We heard many opinions from within and outside Nigeria on how best to
address our economic woes. We listened carefully and studied these proposals
diligently. Our belief has always been that the quickest and easiest solution
may not necessarily be the best solution for a nation as diverse as ours. We
took our time to create a balanced and equitable response, keeping in mind that
only tailored Nigerian solutions can fix Nigeria’s unique problems.
7. And from the recovery that we are seeing today, it is clear
that we made the right decisions. Distinguished and Honourable Members of the
National Assembly, I am now asking you to continue to support our economic
policies in order to consolidate and sustain on the success achieved so far. We
simply cannot go back.
8. In the non-oil sector, crop production has been one of the
main contributors to non-oil growth, which rose to 0.45 percent in the second
quarter of this year. This was primarily driven by our ongoing financial,
capacity building and infrastructure development programs.
9. The Ministry of Agriculture and Rural Development, working
with development partners and the private sector, have embarked on numerous
capacity building projects. We have also completed over 33,000 Hectares of
Irrigation Projects that have increased water availability in key food
producing states. We shall continue to intensify our interventions through the
Anchor Borrowers’ Programme and the Presidential Fertilizer Initiative to
ensure that this momentum is sustained. We have also made provisions in the
2018 Budget to complete ongoing Irrigation Projects at Ada, in Enugu State;
Lower Anambra, in Anambra State; and Gari, in Jigawa State. In 2017, many
factories and projects in the food and agricultural sectors were commissioned
in Kebbi, Nasarawa, Kaduna, Anambra, Edo, Jigawa, Rivers, Niger, Ogun and
Ebonyi States, to mention a few. This is a clear statement that our economic
diversification and inclusive growth ambitions are coming to fruition.
10. Significant progress has also been made in the Solid
Minerals development sector. In Ondo State, for instance, work is ongoing to
fully exploit the bitumen resources to meet the 600,000 MTs of asphalt imported
per annum for roads and other construction projects. To consolidate on these
efforts, we have also established a 30 billion Naira Solid Minerals Development
Fund to support other minerals exploration activities across the country.
11. In the oil and gas sector, the relatively higher crude oil
prices supported our economic recovery. Our mutually beneficial engagement with
oil producing communities in the Niger Delta contributed immensely to the
recovery in oil production experienced in recent months. We would like to thank
the leadership and communities in the Niger-Delta for their continued support
and to also reiterate our assurances that this Administration will continue to
honour our commitments to them. We cannot afford to go back to those dark days
of insecurity and vandalism. We all want a country that is safe, stable and secure
for our families and communities. This means we must all come together to
address any grievances through dialogue and peaceful engagement. Threats,
intimidation or violence are never the answer.
12. We are working hard on the Ogoni Clean-up Project. During
the year, we engaged 8 international and local companies proposing different
technologies for the mandate. To enable us select the best and most suitable
technology for the remediation work, we asked each company to conduct
Demonstration Clean-up Exercises in the 4 Local Government Areas of Ogoni Land.
These Demonstrations were recently concluded and the results are being studied
by the Governing Council of the Ogoni Clean-up Project. Although the Project
will be funded by the International Oil Companies, we have made provisions in
the 2018 Budget for the costs of oversight and governance, to ensure effective
implementation.
13. On the international front, I would like to thank our
friends and partners in the Joint OPEC / Non-OPEC Ministerial Monitoring
Committee (JMMC) who graciously granted Nigeria an exemption from the output
cuts imposed on OPEC Member Countries in January 2017. This exemption, which
was extended in September 2017, significantly helped during our most
challenging time. We shall continue our positive engagement with other oil
producing nations to ensure that the momentum generated is sustained.
14. Permit me, Mr. Senate President and Right Honourable
Speaker, to state that despite the downturn in oil prices and our challenging
economic circumstances, this Administration was able to invest an unprecedented
sum of over 1.2 trillion Naira in capital projects through the 2016 Budget.
This is the highest ever in the history of this country. This is a clear
demonstration of our commitment to consolidate on our economic diversification
reforms and lay a stronger foundation for future growth and development.
15. Our Sovereign Wealth Fund, which was established in 2011
with US$1 billion, did not receive additional investment for 4 years when oil
prices were as high as US$120 per barrel. However, despite record low oil
prices, this Administration was able to invest an additional US$500 million
into the Fund. This further demonstrates that in our struggle to have a stable
and secure nation today, we have not, and will not, lose sight of the need to
lay a solid foundation for the future prosperity of successive generations.
16. We have asked the Sovereign Wealth Fund to look inward and
invest locally. Some of the successes we are seeing today in the agricultural
sector are driven by this new investment approach by the Nigeria Sovereign
Investment Authority (NSIA). The NSIA also has a very strong pipeline of local
investments that will support our inclusive and diversified economic growth
plan.
17. Stability has been restored to the foreign exchange market
due to the interventions by the Central Bank of Nigeria to improve access to
liquidity, discourage currency speculation and increase net foreign exchange
inflows. As at the 30th of October, 2017, our external reserves had increased
to US$34bn. This stability has supported our efforts to provide the enabling
environment and interventions needed to empower Micro, Small and Medium-Sized
enterprises, investors, manufacturers and exporters, to sustain and in some
cases, grow their operations. Indeed, by the second quarter of 2017, exports
significantly outpaced imports, resulting in a trade surplus of 506.5 billion
Naira.
Ease of Doing Business Reforms
18. One of the targets we set for gauging our progress in
creating an enabling environment for business was to achieve a positive
movement in the World Ease of Doing Business Index. You would recall Nigeria
experienced a decade-long decline in this ranking. In 2008, Nigeria was ranked
120th. By 2015, our situation had deteriorated to 169th of the 189 countries
surveyed. Our very simple, logical and user-friendly reforms are reversing this
trend. A recently released World Bank business ranking report announced that
Nigeria had moved 24 places to 145th position in 2017. I am delighted that we
have met and even surpassed our target of moving at least 20 paces up this
global ranking. The same World Bank report also stated that Nigeria is among
the top 10 reforming countries in the world.
19. To ensure these reforms are institutionalized, Executive
Order Number #1 on the Promotion of Transparency and Efficiency in the Business
Environment was issued in May 2017. The Order contained measures that ease the
process of business registration, approval of permits, granting visas and
streamlining port operations. We are committed to continuing and accelerating
the Ease of Doing Business reforms, which are critical to attracting new
investments, growing the economy and creating jobs for our people.
Improved Tax Administration
20. Although the economy is diversified with non-oil Sector
accounting for over 90 percent of total Nominal GDP, the Government’s revenues
are not as diversified yet. Our Tax-to-GDP ratio of about 6% is one of the
lowest in the world. This situation is not consistent with our goal of having a
diversified, sustainable and inclusive economy. Accordingly, we are stepping up
efforts to ensure all taxable Nigerians comply with the legal requirement to
declare income from all sources and remit taxes due to the appropriate
authorities.
21. Already, we have introduced the Voluntary Assets and Income
Declaration Scheme (VAIDS) on the 1st of July, 2017. The Scheme provides
non-compliant taxpayers with a nine-month window to regularise their tax status
relating to historical periods. In return, overdue interest and penalties will
be forgiven. In addition, no investigations or criminal charges will be brought
against participating taxpayers. We expect that this Scheme will widen the tax
net for both the Federal and State Governments. I am therefore, asking all
Nigerians to seize this opportunity and do right thing. Let us not shy away
from our duty to build a better Nigeria.
Optimising Efficiency in Expenditure
22. In 2016 this Administration adopted a policy of allocating
at least 30 percent of our annual budget to capital expenditure. This was
entrenched in the ERGP to unlock further growth in the economy. This tradition
was maintained in the 2017 Budget and has been reflected in the proposal for
2018, in which 30.8 percent of total expenditure has been set aside for the
capital vote.
23. To support these efforts, you would recall that an
Efficiency Unit was set up under the Federal Ministry of Finance to reduce
wastage, plug leakages and foster greater fiscal transparency. We have
intensified the implementation of the Integrated Payroll and Personnel
Information System (IPPIS) across government MDAs to automate personnel records
and salaries’ payment process, with the goal of eliminating ghost workers. 461
Federal MDAs have been captured on the system, so far. Our target is to enroll
all MDAs. I have directed the military and other security agencies to ensure
total compliance without further delay.
Increased Investment in Infrastructure
24. Mr. Senate President, and the Right Honourable Speaker, we
shall continue to develop our infrastructure across the country. Although a lot
of progress has been made, the huge contractor liabilities we inherited have
adversely impacted our infrastructure development timetable. Indeed,
contractors were owed trillions of Naira when this Administration came into
office. In some areas, we have made payments so projects may be completed;
while in others, we are reconciling the liabilities to identify and settle legitimate
claims. As a responsible and accountable Administration, we decided that
clearing this backlog was an important priority.
25. For instance, at the outset of this Administration in 2015,
the Abuja Metro-Rail Project, which began in 2007 was only 50% completed, after
8 years. Today, in just 18 months, we have pushed the project to 98%
completion. This was achieved as the Nigerian Government was diligently able to
meet its counterpart funding obligations for the Chinese loans.
26. We have also continued work on key strategic Roads. Over 766
kilometres of roads were constructed or rehabilitated across the country in
2017. For instance, work is at various stages of completion on these strategic
roads with immense socio-economic benefits:
a. Rehabilitation of Ilorin-Jebba-Mokwa-Birnin-Gwari-Kaduna
Road;
b. Dualization of Oyo-Ogbomosho-Ilorin Road;
c. Rehabilitation of Gombe-Numan-Yola Road;
d. Dualization of Kano-Maiduguri Road;
e. Rehabilitation of Sokoto-Tambuwal-Jega Road and
Kotangora-Makera Road that transverse Sokoto, Kebbi and Niger States;
f. Rehabilitation and Reconstruction of Enugu-Port-Harcourt
Road;
g. Rehabilitation of Enugu-Onitsha Dual Carriageway Road;
h. Rehabilitation of Aleshi-Ugep Road and the Iyamoyun-Ugep
Section in Cross River State;
i. Rehabilitation, Reconstruction and Expansion of Lagos-Ibadan
Dual Carriageway Road;
j. Construction of Loko-Oweto Bridge over River Benue in
Nasarawa and Benue States; and
k. Construction Gokanni Bridge along Tegina-Mokwa-Jebba Road in
Niger State.
27. Under the Federal Roads Development Programme, we recently
completed a Data Collection Exercise on the 7,000km Federal Road Network which
was funded by the World Bank. This information is enabling us to make informed
decisions regarding the planning, budgeting and management of the Federal Road
Network. Going forward, we will be working based on facts rather than
subjectivity.
28. Furthermore, we have also invested a lot of time and effort
in identifying alternative means of funding new projects. For example, the
recent 100 billion Naira Sukuk Financing will cater specifically for the
development of 25 roads across the country. We also developed different
structures that empower private investors to contribute to the development of
roads of significant national importance. Already, we are seeing results. For
example:
a. The Bonny-Bodo Road is being jointly funded by the Federal
Government and Nigeria LNG Limited. This project was conceived decades ago but
it was abandoned. This Administration restarted the project and when completed,
it will enable road transportation access for key communities in the Niger-
Delta region; and
b. The Apapa Wharf-Toll Gate Road in Lagos State is also being
constructed by private sector investors in exchange for tax credits.
29. Distinguished Members of the National Assembly, our Power
Sector Reforms still remain a work in progress. Although we have increased
generation capacity significantly, we still have challenges with the
Transmission and Distribution Networks. That said, I am pleased to announce
that since 2015, the Transmission Company of Nigeria (TCN) and Niger-Delta
Power Holding Company (NDPHC) have added 1,950 MVA of 330-132kV transformer
capacity at 10 Transmission stations, as well as 2,930 MVA of 132-33kV
transformer capacity to 42 substations nationwide. With these additions, the
Transmission Network today can handle up to 7,000 Mega Watts (MW).
30. The key bottleneck now is the Distribution Network where the
substations cannot take more than 5,000 MW. This is constraining power delivery
to consumers. We are working with the privatized Distribution Companies to see
how to overcome this challenge. Nigerians should be rest assured that this
Administration is doing all it can to alleviate the embarrassing power
situation in this country.
31. Furthermore, to sustain the continued expansion of
generation capacity and enhance evacuation, we approved a Payment Assurance
Guarantee Scheme which enabled the Nigerian Bulk Electricity Trader (NBET) to
raise 701 billion Naira. This assures the Generation Companies of up to 80%
payment on their invoices. This intervention has brought confidence back into
the sector and we expect additional investment to flow through, particularly in
the gas production sector.
32. Distinguished Members of the National Assembly, this
Administration is committed to the development of Green Alternative Energy
Sources. To date, we have signed Power Purchase Agreements (PPA) with 14 solar
companies. We also approved:
a. The completion of the 10 MW Wind Farm in Katsina State, a
project that was abandoned since 2012; and
b. The concession of 6 small hydro-electric power plants with a
total capacity of 50 MW.
33. To enable the successful take-off of these, and future Green
Projects, I am pleased to inform this Distinguished Assembly that the Federal
Government will be launching the first African Sovereign Green Bond in December
2017. The bond will be used to finance renewable energy projects. We are very
excited about this development as it will go a long way in solving many of our
energy challenges, especially in the hinterland.
34. On Rail, we recently received 2 additional locomotives and
10 standard gauge coaches for the Abuja-Kaduna Rail Line. These will be
deployed for the new non-stop express service between the two cities that will
only take one hour and fifteen minutes. This new service will complement the
existing service currently in place. We plan to commission this by December
2017.
35. We have also kick-started the abandoned
Itakpe-Ajaokuta-Warri Rail Line. This project has been on for over 17 years. We
had to take some drastic measures but I am pleased to announce that work is
ongoing and we expect to commission this service by September 2018. This
service will start with 7 standard gauge coaches.
36. The situation at the Apapa port complex is a top priority
for this Administration. The delays due to congestion and their adverse impact
on business operations and costs is a key concern to our Government. As I
mentioned earlier, we are partnering with the private sector to fix the road.
We shall do the right thing considering. We will not cut corners.
37. In addition to the road, we have also commenced the
extension of the Lagos-Ibadan Standard Gauge Rail Line to connect Apapa and Tin
Can Port Complexes. This project will significantly ease the congestion at the
ports and enhance both export and import operations. This project shall be
completed by December 2018. Already, working with the private sector, we have
repaired the Apapa Port Narrow Gauge Line which is currently being used to
evacuate goods from the port, thereby easing congestion.
38. As we all know, sometimes doing the right thing takes time
and requires sacrifices. I am therefore appealing to all stakeholders to work
with us in ensuring we deliver a solution that we will all be proud of.
39. Certainly, the infrastructure requirement to reposition
Nigeria for the future is huge and our resources are limited. Government,
therefore, will pursue private partnerships to maximise available capital and
developmental impact. In the next fiscal year, we will also establish 7
tertiary health institutions across the country through partnership with our
Sovereign Wealth Fund and other private sector investors.
Agricultural Development
40. The agricultural sector played a crucial role in Nigeria’s
exit from recession. Today, it remains the largest employer of labour and holds
significant potential to realise our vision of repositioning Nigeria as a food
secured nation.
41. We will consolidate on existing policies and develop new
ones to ensure the numerous value chain challenges in the agricultural sector
are addressed. As I mentioned earlier, several investors have deployed
significant capital in the production and processing of rice, sugar, maize,
soya, cassava, yams, tomato, oil palm, rubber and poultry, to mention a few. We
are also seeing increased investment in the agro-inputs manufacturing sector
such as fertilisers.
42. We are determined to protect these investments and encourage
more. Food Security is an important aspect of this Administration’s National
Security agenda. Any person involved in smuggling of food items is a threat to
our National Security and will therefore be dealt with accordingly. A Committee
chaired by the Vice President is working on this matter. A key part of their
work will be the reactivation of the Badagry Agreement signed between Nigeria
and the Republic of Benin in 2003. This agreement, which was abandoned by
previous Administrations, established a mutually beneficial framework for the
two neighbours and allies to partner in tackling smuggling and other cross
border crimes. I would like to assure investors in the agricultural value chain
that the menace of smuggling will be handled decisively.
43. To further support investors and State Governments, we will
accelerate the establishment of at least 6 Staple Crop Processing Zones, in the
first phase. This initiative will develop infrastructure for the production,
processing and storage of strategic commodities. The focus is on backward
integration for grains, horticulture, livestock, fisheries and sugar; as well
as exportable commodities such as cocoa, cassava and oil palms.
Health Sector Developments
44. During 2017, the country had a number of disease outbreaks
such as Meningitis, Yellow Fever, Monkey Pox and Lassa Fever. I would like to
commend the Federal and State Ministries of Health for their selfless service
and timely responses to contain these outbreaks. I would also like to thank the
World Health Organisation, the Global Fund and UNICEF, for their continued
support during these trying times. This collaboration was a key factor in the
low mortality rates experienced. To further improve our response to such
outbreaks, we are working to upgrade our Integrated Disease Surveillance and
Response System. This will further enhance the efficiency of our diagnostic and
clinical management processes.
45. In this respect, I urge this Distinguished House to expedite
the passage of the Bill for the Nigeria Centre for Disease Control to enable us
consolidate on the successes recorded to date.
Implementing the Social Investment Program
46. I am pleased to inform you that we have recorded tremendous
success in the implementation of the Federal Government’s Social Investment
Program. Specifically,
a. Over 4.5 million Primary 1 to Primary 3 pupils in public
schools are being fed under the School Feeding programme;
b. Over 200,000 unemployed graduates have been employed under
the N-Power Scheme in education, health and agricultural sectors;
c. Over 250,000 enterprises have benefitted from the sum of 12.5
billion Naira, which has been disbursed to entrepreneurs to expand their
businesses; and
d. Over 110,000 households are currently benefitting from the
Conditional Cash Transfer programme across the country.
PERFORMANCE OF THE 2017 BUDGET
47. The 2017 Budget of Recovery and Growth was based on a
benchmark oil price of US$44.5 per barrel, oil production of 2.2 million
barrels per day, and a Naira-to-US Dollar Exchange Rate of 305. Based on these
assumptions, total revenue of 5.084 trillion Naira was projected to fund
aggregate expenditure of 7.441 trillion Naira. A projected fiscal deficit of
2.356 trillion Naira was to be financed mainly by domestic and external
borrowing.
48. On revenue performance, collections were 14 percent below
target as of September 2017, mainly due to the shortfall in non-oil revenues.
49. A key revenue shortfall was from Independent Revenues; only
155.14 billion Naira was remitted by September 2017 as against the projected
pro-rated sum of 605.87 billion Naira. This represents a 74 percent shortfall,
which is very disappointing.
50. This recurring issue of under-remittance of operating
surpluses by State Owned Entities is absolutely unacceptable. You will all
recall that in September 2017, the Joint Admissions and Matriculation Board
(JAMB) announced that they were ready to remit 7.8 billion Naira back to the
Government. The shocking discovery was that in the last decades, JAMB only
remitted an aggregate of 51 million Naira. This clearly illustrates the abuses
that occur in State Owned Entities as well as their potential for increased Independent
Revenues, if only people would do the right thing. We all need to play our role
to ensure the right thing is done. I would also like to remind Nigerians that
the Whistle Blower lines are still open.
51. Accordingly, I have directed the Economic Management Team
(EMT) to review the fiscal profiles of these agencies, to ensure strict
compliance with the applicable Executive Orders and Financial Regulations.
There may be a need to consider a review of the Fiscal Responsibility Act and
the Executive will be approaching the National Assembly on this issue in due
course.
52. On the expenditure side, a total of 450 billion Naira of the
capital vote had been released as at the end of October 2017. With your support
for our funding plan, our target is to release up to 50% of the capital vote
for MDAs by the year’s end. We have prioritised payments of our counterpart
obligations on our concessionary loans, as well as funding of critical
infrastructure and other projects with socio-economic benefits. Furthermore,
MDAs have made provisions to carry over to the 2018 Budget, capital projects
that are not likely to be fully funded by year-end 2017, to ensure project
continuity.
53. Regrettably, the late passage of the 2017 Budget has
significantly constrained budget implementation. As you are aware, the 1999
Constitution authorized necessary Federal Government expenditures prior to the
12th of June, 2017 when the 2017 Appropriation Act was signed into law. This
year, we have worked very hard to achieve an earlier submission of the
Medium-term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), and the
2018 Appropriation Bill. Our efforts were to avail the National Assembly with
sufficient time to perform its important duty of passing the Appropriation Bill
into law, hopefully by the 1st of January, 2018. It is in this spirit that I
solicit the cooperation of the Legislature in our efforts to return to a more
predictable budget cycle that runs from January to December.
PRIORITIES FOR THE 2018 BUDGET OF CONSOLIDATION
54. The 2018 Budget Proposals are for a Budget of Consolidation.
Our principal objective will be to reinforce and build on our recent
accomplishments. Specifically, we will sustain the reflationary policies of our
past two budgets. In this regard, the key parameters and assumptions for the
2018 Budget are as set out in the 2018-2020 Medium Term Expenditure Framework
(MTEF) and Fiscal Strategy Paper (FSP). These include:
a. Benchmark oil price benchmark of US$45 per barrel;
b. Oil production estimate of 2.3 million barrels per day,
including condensates;
c. Exchange rate of N305/US$ for 2018;
d. Real GDP growth of 3.5 percent; and
e. Inflation Rate of 12.4 percent.
Federally-Collectible Revenue Estimates
55. Based on the above fiscal assumptions and parameters, total
federally-collectible revenue is estimated at 11.983 trillion Naira in 2018.
Thus, the three tiers of Government shall receive about 12 percent more
revenues in 2018 than the 2017 estimate. Of the amount, the sum of 6.387
trillion Naira is expected to be realised from oil and gas sources. Total
receipts from the non-oil sector are projected at 5.597 trillion Naira.
Federal Government Revenue Estimates
56. The Federal Government’s estimated total revenue is 6.607
trillion Naira in 2018, which is about 30 percent more than the 2017 target. As
we pursue our goal of revenue diversification, non-oil revenues will become a
larger share of total revenues. In 2018, we project oil revenues of 2.442
trillion Naira, and non-oil as well as other revenues of 4.165 trillion Naira.
57. Non-oil and other revenue sources of 4.165 trillion Naira,
include several items including: Share of Companies Income Tax (CIT) of 794.7
billion Naira, share of Value Added Tax (VAT) of 207.9 billion Naira, Customs
& Excise Receipts of 324.9 billion Naira, FGN Independently Generated
Revenues (IGR) of 847.9 billion Naira, FGN's Share of Tax Amnesty Income of
87.8 billion Naira, and various recoveries of 512.4 billion Naira, 710 billion
Naira as proceeds from the restructuring of government’s equity in Joint
Ventures and other sundry incomes of 678.4 billion Naira.
Proposed Expenditure for 2018
58. A total expenditure of 8.612 trillion Naira is proposed for
2018. This is a nominal increase of 16 percent above the 2017 Budget estimate.
In keeping with our policy, 30.8 percent (or 2.652 trillion Naira) of aggregate
expenditure (inclusive of capital in Statutory Transfers) has been allocated to
the capital budget.
59. We expect our fiscal operations to result in a deficit of
2.005 trillion Naira or 1.77 percent of GDP. This reduction is in line with our
plans under the ERGP to progressively reduce deficit and borrowings.
60. We plan to finance the deficit partly by new borrowings
estimated at 1.699 trillion Naira. Fifty percent of this borrowing will be
sourced externally, whilst the balance will be sourced domestically. The
balance of the deficit of 306 billion Naira is to be financed from proceeds of
privatisation of some non-oil assets by the Bureau of Public Enterprises (BPE).
61. The proposed 8.612 trillion Naira of 2018 Aggregate
Expenditure comprises:
a. Recurrent Costs of N3.494 trillion;
b. Debt Service of N2.014 trillion;
c. Statutory Transfers of about N456 billion;
d. Sinking Fund of N220 billion (to retire maturing bond to Local Contractors);
e. Capital Expenditure of N2.428 trillion (excluding the capital component of
Statutory Transfers).
Statutory Transfers
62. 456.46 billion Naira was provided in the 2018 Budget for
Statutory Transfers. The 5 percent increase over last year’s provision is
mainly due to increases in transfer to Niger Delta Development Commission
(NDDC) and the Universal Basic Education Commission (UBEC), which are related
directly to the size of oil revenue.
Debt Restructuring
63. We are closely monitoring our debt service to revenue ratio.
We shall address this ratio through our non-oil revenue-generation drive and
restructuring of the existing debt portfolio. Presently, domestic debt accounts
for about 79 percent of the total debt. Our medium-term strategy is to reduce
the proportion of our domestic debt to 60% by the end of 2019 and increase
external debt to 40 percent. It is noteworthy that rebalancing our debt
portfolio will enhance private sector access to domestic credit. In addition,
annual debt service costs will reduce as external debts are serviced at lower
rates and repaid over a longer period than domestic debt.
Recurrent Expenditure
64. A substantial part of the recurrent cost proposal for 2018
is for the payment of salaries and overheads in key Ministries providing
critical public services such as:
a. N510.87 billion for Interior;
b. N435.01 billion for Education;
c. N422.43 billion for Defence; and
d. N269.34 billion for Health.
The allocation to these Ministries represent significant
increases over votes in previous budgets.
Personnel Costs
65. Personnel costs is projected to rise by 12 percent in 2018.
Although we have made substantial savings by registering MDAs on the Integrated
Personnel Payroll Information System (IPPIS) platform, 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
are 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 Costs
66. Overhead costs is projected to rise by 26 billion Naira in
2018, a modest increase of about 12 percent reflecting inflationary
adjustments. MDAs are required to adhere to government regulations regarding
cost control.
Capital Expenditure
67. To consolidate on the momentum of the 2017 Budget’s
implementation, many ongoing capital projects have been provided for in the
2018 Budget. This is in line with our commitment to appropriately fund ongoing
capital projects to completion. By allocating 30.8 percent 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.
68. Key capital spending allocations in the 2018 Budget include:
a. Power, Works and Housing: N555.88 billion;
b. Transportation: N263.10 billion;
c. Special Intervention Programmes: N150.00 billion;
d. Defence: N145.00 billion;
e. Agriculture and Rural Development N118.98 billion;
f. Water Resources: N95.11 billion;
g. Industry, Trade and Investment: N82.92 billion;
h. Interior: N63.26 billion;
i. Education N61.73 billion;
j. Universal Basic Education Commission: N109.06 billion;
k. Health: N71.11 billion;
l. Federal Capital Territory: N40.30 billion;
m. Zonal Intervention Projects N100.00 billion;
n. North East Intervention Fund N45.00 billion;
o. Niger Delta Ministry: N53.89 billion; and
p. Niger Delta Development Commission: N71.20 billion.
69. As I had previously indicated, we aim to consolidate on our
achievements in 2017. We shall meet our counterpart funding obligations. We
shall complete all ongoing projects. And we shall carry forward all strategic
projects that were budgeted for but which we were unable to kick start due to
liquidity challenges, late passage of the budget, prolonged contractual
negotiations, and other matters.
70. Specifically, I would like to bring your attention to the
following key projects and programmes that we are determined to implement in
2018:
a. N9.8 billion for the Mambilla hydro power project, including
N8.5 billion as counterpart funding;
b. N12 billion counterpart funding for earmarked transmission
lines and substations;
c. N35.41 billion for the National Housing Programme;
d. N10.00 billion for the 2nd Niger Bridge; and
e. About N300 billion for the construction and rehabilitation of
the strategic roads mentioned earlier.
Consolidating on the Social Intervention Programme
71. This Administration remains committed to pursuing a
gender-sensitive, pro-poor and inclusive growth. We are keenly interested in
catering for the most vulnerable. Accordingly, we have retained the 500 billion
Naira allocation to the Social Intervention Programme. Under the programme, 100
billion Naira has been set aside for the Social Housing Programme.
72. Government will also continue to implement the Conditional
Cash Transfer (CCT) programme, as well as the National Home-Grown School
Feeding programme in 2018. These initiatives are already creating jobs and
economic opportunity for local farmers and cooks, providing funding to
artisans, traders and youths, as well as supporting small businesses with
business education and mentoring.
Regional Spending Priorities for Peace, Security and Development
73. To maintain peace and security in the Niger Delta for
economic and social activities to thrive, the provision of 65 billion Naira for
the Presidential Amnesty Programme has been retained in the 2018 Budget. In
addition, the capital provision for the Ministry of Niger Delta has been
increased to 53.89 billion Naira from the 34.20 billion Naira provided in 2017.
This is to further support the development in the region. We will complete all
critical projects, including the East-West Road, which has a provision of about
17.32 billion Naira in 2018.
74. Across the nation, and particularly in the North East
region, our commitment to the security of life and property remains absolute.
We will ensure that our gallant men and women in arms are properly equipped and
well-motivated. The result of our efforts is evident in the gradual return to
normalcy in the North East. It is in this spirit that I recently assented to
the North-East Development Commission Bill that was passed by this
Distinguished House. We expect that this development will consolidate on our
ongoing efforts to combat insurgency, reintegrate Internally Displaced Persons
and rebuild communities in the North East Region, which have been adversely
affected by the insurgency.
75. Similar attention is being given to efforts to reduce
violent crime across the country. The Nigerian Army was recently deployed to
combat the growing scourges of cattle rustling and banditry that have plagued
our communities in Kaduna, Niger, Kebbi, Katsina and Zamfara States. We will
also continue to arrest the incidence of Armed Robbery, Kidnapping and other
Violent Crimes across our nation.
76. We have also increased our focus on cyber-crimes and the
abuse of technology through hate speech and other divisive material that is
being propagated on social media. Whilst we uphold the Constitutional rights of
our people to freedom of expression and association, where the purported
exercise of these rights infringes on the liberties of other citizens or
threatens to undermine our National Security, we will take firm and decisive
action.
77. In this regard, I reiterate my call for Nigerians to
exercise restraint, tolerance and mutual respect in airing any grievances and
frustrations. Whilst the ongoing national discourse on various political issues
is healthy and welcome, we must not forget the lessons of our past. I trust
that the vast majority of our people would rather tread the path of peace and
prosperity, as we continue to uphold and cherish our Unity in Diversity.
CONCLUSION
78. Distinguished and Honourable Members of the National
Assembly, you will recall that in my 2017 Budget Speech, I promised a new era
for Nigeria and an end to the old ways of overdependence on oil revenues. The
statistics and initiatives I mentioned clearly show that this new era has come
and the old Nigeria is surely disappearing. We must, therefore, all work
together to protect and sustain this CHANGE to create a new Nigeria:
a. A Nigeria that feeds itself;
b. A Nigeria that optimally utilizes its resources;
c. A Nigeria with a diversified, sustainable and inclusive
economy.
79. Mr. Senate President, Mr. Speaker, Distinguished and
Honourable Members of the National Assembly, this speech would be incomplete
without commending the immense, patriotic and collaborative support of the
National Assembly in the effort to move our great nation forward. I wish to
assure you of the strong commitment of the Executive branch to deepen the
relationship with the Legislature.
80. Nigeria is currently emerging from a very difficult economic
period. If we all cooperate, and support one another, we can consolidate on our
exit from the recession and firmly position Nigeria for economic prosperity.
All the projects presented within this Budget have been carefully selected and
subjected to extensive consultations and stakeholder engagements. As a
Government, we are determined to bring succour to our people, improve their
lives, and deliver on our promises to them. 2018 is a crucial year as we strive
to ensure that we consolidate our successes and institutionalize the policies
and practices that drove this turnaround.
81. I appeal to you to swiftly consider and pass the 2018
Appropriation Bill.
82. It is therefore with great pleasure and a deep sense of
responsibility, that I lay before this Distinguished Joint Session of the
National Assembly, the 2018 Budget Proposals of the Federal Government of
Nigeria.
83. I thank you most sincerely for your attention.
84. May God bless the Federal Republic of Nigeria.
No comments: