AN INSIGHT INTO THE 2017 BUDGET
On Thursday, the 11th of May, 2017, the National Assembly passed the 2017 Appropriation Bill which is also branded the ‘Budget of Recovery and Growth’, about five months after President Muhammadu Buhari presented the budget to the legislature on December 14, 2016. The proposed budget represents an increase of about 20.4 per cent over the 2016 Appropriation of N6.07 trillion.
The 2017 budget signed into law by Acting President Osinbajo is based on the following assumptions: an oil price benchmark of US$44.50 per barrel (Executive originally proposed US$42.50), average crude oil production of 2.2 million barrels per day, and an exchange rate of N305/dollar.
The 2017 budget prioritizes Roads and Railway Projects, Social Housing, Special Economic Zones, Social Investment Programmes, River Basin Development, Presidential Amnesty Programme, and development in the Niger Delta and North East.
The Acting President, H.E. Osinbajo, during his speech at the signing of the budget into law highlighted that the budget contains provisions that reflect the Federal Government’s priorities in 5 (five) key areas over the 2017-2020 plan period. They include:
- Stabilizing the macroeconomic environment;
- Agriculture and Food security;
- Energy sufficiency in power and petroleum products;
- Improved transportation infrastructure; and
- Industrialization through support for micro, small and medium-scale enterprises (MSMEs)
The following are details of the 2017 Budget:
The 2017 budget had a total budget sum of about N7,441,175,486,755 (Seven Trillion, four hundred and forty-one billion, one hundred and seventy-five million, four hundred and eighty-six thousand, seven hundred and fifty-five Naira), the highest ever by any Nigerian government.
The benchmark oil price was set at $44.5 per barrel and oil production retained at 2.2 million barrels of oil per day.
Statutory transfers to government agencies – including the National Assembly, National Judicial Commission, Niger-Delta Development Commission, INEC, Universal Basic Education, etc. – received N434.4 billion, while N1.841 trillion was allocated for debt service.
Total recurrent expenditure stands at N2.987 trillion. A partial breakdown shows that the Ministry of Interior will receive N472.597 billion; Ministry of Education, N398.686 billion; Ministry of Defence, N330.543 billion; Ministry of Youths and Sports Development, N89.316 billion; Ministry of Petroleum Resources, N63.222 billion; Ministry of Foreign Affairs, N56.424 billion; Office of the National Security Adviser, N76.281 billion; Secretary to the Government of the Federation, N51.933 billion; and State House, N22.947 billion.
Other items under recurrent expenditure include: Special Intervention Programme, N350 billion; Presidential Amnesty Programme, N76.7 billion; Settlement of Electricity Bills, N40 billion; and Military Operations, including Operation Lafiya Dole, N25 billion.
Total capital expenditure stands at N2.177 trillion, out of which the Ministry of Power, Works, and Housing will receive N553.713 billion; Ministry of Transportation, N241.709 billion; Ministry of Defence, N139.294 billion; Ministry of Water Resources, N104.245 billion; Ministry of Agriculture, N103.793 billion; Ministry of Industry, N81.726 billion; Ministry of Interior, N63.760 billion; and Ministry of Education, N56.72 billion.
Other items under capital expenditure include: Special Intervention Programme, N150 billion; Zonal Intervention Projects, N100 billion; North-East Intervention Fund, N45 billion; and Payment of Local Contractors’ debts/Other Liabilities, N20 billion.
Summarily, here are some highlights of the 2017 Budget:
- 2017 budget had a total budget sum of about N7,441,175,486,755
- Lawmakers used an assumed oil price of $44.5 a barrel for the budget compared to $42.5 earlier submitted by the presidency.
- Oil production is set at 2.2mbpd
- Exchange rate was set at N305/$1
- Debt Service (Local & Foreign) – N1,663,885,430,499.
- Sinking Fund – N177,460,296,707
- Total Debt Service – N1,849,345,727,206.
- Recurrent Non-debt expenditure – N2,086,176,493,860
- Capital Expenditure – N1,710,580,601,619
The Executive and the National Assembly have reached an agreement to return the Federal Government to a January–December budget calendar, starting from the 2018 budget. To ensure this happens the Executive has committed to submitting the 2018 budget to the National Assembly by October 2017, and on its part the Assembly has committed to passing the budget into law before the end of 2017.
|Oil production (mbpd)||2.2||2.2||0%|
|Price per barrel ($)||42.5||38||10.5%|
|Projected GDP growth (%)||2.5%||4.4%||-42.8%|
|Average exchange rate (NGN/US$)||305||197||54.8%|
|Revenue (N Trillion)|
|Expenditure (N Trillion)|
|Non-debt recurrent expenditure||2.98||2.65||12.5%|
|Fiscal deficit (% of GDP)||2.14%||2.16%||-0.92%|
Benchmark with 2016 Budget