About N300b for the construction and rehabilitation of strategic roads
President Muhammadu Buhari yesterday proposed a N8.612 trillion expenditure for next year.
The “Budget of Consolidation” is a nominal increase of 16 per cent above this year’s estimate.
The President told a joint sitting of the Senate and House of Representatives that the 2018 Budget will consolidate on the achievements of previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020.
The Federal Government presented a budget of N7.44 trillion for the outgoing year 2017.
The President noted that in keeping with the government’s policy, 30.8 per cent (or N2.652 trillion) of aggregate expenditure (inclusive of capital in Statutory Transfers) has been allocated to the capital budget.
The government, he said, expects fiscal operations to result in a deficit of N2.005 trillion or 1.77 percent of GDP.
The reduction in deficit is in line with the government’s plans under the ERGP to progressively reduce deficit and borrowings.
The deficit will be partly financed by new borrowings estimated at N1.699 trillion, 50 per cent of which will be sourced externally. The balance will be sourced domestically.
Buhari noted that the balance of the deficit of N306 billion was to be financed from proceeds of privatisation of some non-oil assets by the Bureau of Public Enterprises (BPE).
The proposed N8.612 trillion for 2018 aggregate expenditure comprises:
Recurrent Costs of N3.494 trillion; Debt Service of N2.014trillion; Statutory Transfers of about N456 billion; Sinking Fund of N220 billion (to retire maturing bond to Local Contractors); Capital Expenditure of N2.428 trillion (excluding the capital component of Statutory Transfers).
On Statutory Transfers, he said N 456.46 billion was provided in the 2018 Budget for Statutory Transfers.
The five per cent 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.
On Debt Restructuring, the President said the debt service to revenue ratio was being closely monitored.
He added: “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 per cent of the total debt. Our medium-term strategy is to reduce the proportion of our domestic debt to 60 per cent 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.”
On Recurrent Expenditure, Buhari said a substantial part of the recurrent cost proposal for 2018 was for the payment of salaries and overheads in key ministries providing critical public services such as: N510.87 billion for Interior; N435.01 billion for Education; N422.43 billion for Defence and N269.34 billion for Health.
Buhari explained that the allocation to the ministries represent significant increases over votes in previous budgets.
Personnel cost is projected to rise by 12 per cent in 2018.
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