Full Text Of Buhari's 2018 Appropriation Bill Speech
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President Muhammadu Buhari delivered his 2018 Appropriation Bill speech to the joint section of the National Assembly (NASS) in Abuja on Tuesday being 7th November 2017 as planned.
The president proposed a total expenditure of N8.6 trillion for the 2018
budget, which was tagged 'Budget of Consolidation', representing an increase of 16 per cent (16%) from the 2017 budget
estimate.
The aggregate expenditure comprises recurrent costs of N3.494
trillion; debt service of N2.014 trillion; statutory transfers of N456
billion; sinking fund of N220 billion; and capital expenditure of N.428
trillion.
If passed, the budget is expected to result in a deficit of N2.005
trillion, amounting to 1.77 per cent of the country’s Gross Domestic Product (GDP). To finance the deficit, the Nigerian government is expected to borrow an estimated N1.699 trillion.
Read the full speech below:
PROTOCOLS
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
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
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.
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
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.
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
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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
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.
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
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
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 trillionNaira 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.
On revenue performance, collections were 14 percent below
target as of September 2017, mainly due to the shortfall in non-oil
revenues.
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.
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.
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.
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.
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
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
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
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.
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
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.
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.
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
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
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
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
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
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
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.
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.
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.
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
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.
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
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.
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.
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.
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.
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
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.
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.
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.
I appeal to you to swiftly consider and pass the 2018 Appropriation Bill.
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.
I thank you most sincerely for your attention.
May God bless the Federal Republic of Nigeria!
