About a third of Nigeria’s 2017 budget will be funded by borrowing from internal and external sources, an official has said.
The Minister of Budget and National Planning, Udoma Udoma, said the government seeks to borrow about N2.32 trillion to finance the N7.29 trillion budget.
“Of this amount, N1.067 trillion (46 per cent of this borrowing) is intended to be sourced externally, while N1.25 trillion will be sourced domestically,” he said.
About 67 per cent of the 2017 budget, will however be funded from government revenue, majorly from oil and non-oil sources.
Mr. Udoma said at the public presentation of the details of the 2017 “Budget of Recovery and Growth” in Abuja that based on key assumptions and budgetary reform initiatives, government hopes to realize about N4.94 trillion as revenue during the year.
The revenue projection, which he said exceeded the 2016 figure by 28 per cent, would be realized from oil (about N1.985 trillion), non-oil (N1.373 trillion) and other revenues such as minerals and mining.
The revenue contribution from oil, the minister said, would be about 40.2 per cent, as a result of the cost reduction due to the new funding mechanism for the joint venture operations adopted last week, higher oil prices, exchange rate gain and additional oil related revenues, compared to 19 per cent in last year’s budget.
Details of other expected revenues to fund the budget, Mr. Udoma explained, include about N30 billion from federal government share of dividend payments from the Nigeria LNG; earnings from mineral and mining (N1 billion); company income tax (N808 billion), value added tax (N242 billion) and recoveries and fines (N565 billion)
Others include customs duties (N278 billion), federation accounts levies (N46 billion), independent revenue sources (N808 billion), share of actual balance in special accounts (N7 billion), share of balance in special levies accounts (N9 billion), unspent balance of previous fiscal year (N50 billion), share of signature bonus (N114 billion).
Mr. Udoma, who said the total budget outlay for the year was about 20.4 per cent above last year’s provision of N6.06 trillion, explained that about N419.02 billion would be spent on statutory transfers, debt service (N1.66 trillion), and sinking fund (N177.46 billion) to retire certain maturing bonds.
Non-debt recurrent expenditure is N2.98 trillion, or about 40.8 percent of the total outlay, while capital expenditure would gulp N2.24 trillion, or 30 7 per cent, including statutory transfers.
The budget deficit of about N2.36 trillion, which is about 2.18 per cent of the gross domestic product, the minister said, would be financed mainly by borrowings from domestic and external sources, to the tune of about N2.32 trillion.
A breakdown of the recurrent (non-debt) expenditure of government for the year, he explained, was put at about N2.98 trillion, with personnel cost taking the lion’s share of N1.86 trillion, or 63 per cent of the total, as government does not plan to sack workers.
Overhead cost in the budget would take about N229.81 billion, or 7 per cent; service wide vote pensions N89.98 billion, or 3 per cent; consolidated revenue fund pensions N191.63 billion, or 6 per cent; other service wide votes, N116.6 billion, or 5 per cent; presidential amnesty programme, N65 billion, or 2 per cent; refund to special accounts N50 billion, or 2 per cent, and special intervention programme, N350 billion, or 12 per cent.
“It is true our economy is in recession. Inflation and unemployment have been rising. But 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 timid and cautious approach. This is a time for bold and focused 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,” Mr. Udoma said.
He urged the revenue generating agencies, particularly the Federal Inland Revenue Service and the Nigerian Customs to step up efforts to improve their efficiencies and broaden their reach to achieve the targets of the 2017 budget.
Apart from leveraging technology to drive revenue collection, he said government would soon issue fresh guidelines and templates for computing the operating surpluses of the various government agencies set for independent revenues.