The Nigerian President, Muhammadu Buhari presented the 2017 Budget on the 14th December 2016. The 2017 Budget dubbed ‘Budget of Recovery and Growth’ shot up 20.4% higher than the 2016 budget of N6.07trillion with a total provision of N7.29trillion. The Federal government of Nigeria stated that the budget is fashioned to resuscitate the economy from its dying state and end the recession in a matter of months. Breakdown of the budget shows that the Federal Government plans to spend an N2.9trillion on salaries, pensions and wages while plans capital expenditure N2.24trillion – which is about 30% of the total budget. From the budget document, It is noticed that the 2017 Budget is based on an oil benchmark of $42.5 per barrel against dwindling oil prices, with an exchange rate of N305 to $1. Debt servicing increased from N1.48trillion in 2016 to N1.66trillion in 2017 suggesting more borrowings for the Federal Government. The Federal Government increased its deficit from N2.2trillion in 2016 to N2.36trillion in 2016 representing 32.34% of the budget. Expenditure to Revenue figure is N7.298Trillion: N4.94Trillion which represents the deficit gap Federal Government plans to meet through domestic borrowing (N1.252trillion) and external debts (N1.067trillion).
How does FG plan to generate Revenue
Oil Revenue – N1.985trillion based on a production of 2.2m barrels per day. FG Projection of Oil revenue witnessed a growth of 142% from its 2016 projection of N820billion. Non-Oil Revenue (which includes VAT, CIT and Customs duties) has a projection of N13.7trillion. FG’s Independent Revenue projection (income from other revenue generating agencies) is N807.57billion – a -46.16% growth from 2016 forecast. On anti-corruption, FG intends to recover funds from public officials and other breathing spaces for corruption with an expectation of N565.1bn.
Key Capital Allocation
The Ministry of Power, Works and Housing takes the number one spot as the ministry with highest capital allocation with a budget of N529billion. In the second spot is Transporation Ministry with a projection of N262billion followed by Ministry of Defence with a capital budget of N140billion.
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