President Muhammadu Buhari on Wednesday presented an annual budget of N7.298 trillion for the 2017 fiscal year.
The presentation made at a joint session of the National Assembly has Power, Works and Housing receiving the lion share of N529 billion.
Christened budget of budget of recovery and growth, Buahri proposed that the implementation of the Budget will be based on the economic recovery and growth strategy.
The President noted that with regard to expenditure, government has proposed a budget size of N7.298 trillion which is a nominal 20.4 per cent increase over 2016 estimates.
He said that 30.7 per cent of the expenditure will be capital in line with government’s determination to reflate and pull the economy out of recession as quickly as possible.
President Buhari also said that fiscal plan will result in a deficit of N2.36 trillion for 2017 which is about 2.18% of GDP.
The deficit, he said, will be financed mainly by borrowing which is projected to be about N2.32 trillion.
He noted that the intention of government, is to source N1.067 trillion or about 46% of the borrowing from external sources while, N1.254 trillion will be borrowed from the domestic market.
On expenditure estimates, he said that the proposed aggregate expenditure of N7.298 trillion will comprise: Statutory transfers of N419.02 billion; Debt service of N1.66 trillion; Sinking fund of N177.46 billion to retire certain maturing bonds; Non-debt recurrent expenditure of N2.98 trillion; and Capital expenditure of N2.24 trillion (including capital in Statutory Transfers).
The President added that on Statutory Transfers government increased the budgetary allocation to the Judiciary from N70 billion to N100 billion.
The increase in funding, he said, is further meant to enhance the independence of the judiciary and enable them to perform their functions effectively.
Buhari said that that the plan, which builds on the 2016 Budget, provides a clear road map of policy actions and steps designed to bring the economy out of recession and to a path of steady growth and prosperity.
Buhari said that as the country continues to face the most challenging economic situation in the history of the nation, nearly every home and nearly every business in country is affected one way or the other.
The President said that in 2017, government will focus on the rapid development of infrastructure, especially rail, roads and power.
He added that efforts to fast-track the modernization of railway system are a priority in the 2017 Budget.
According to him, in 2016, government made a lot of progress getting the necessary studies updated and financing arrangements completed.
The Federal Government, he said, has an ambitious programme for growing the country’s digital platforms in order to modernise the Nigerian economy, support innovation and improve productivity and competitiveness.
“We will do this through increased spending on critical information technology infrastructure and also by promoting policies that facilitate investments in this vital sector,” Buhari assured.
Buhari noted that in 2016, government conducted a critical assessment of the power sector value chain, which is experiencing major funding issues.
He said that although Government, through the CBN and other Development Finance Institutions has intervened, it is clear that more capital is needed.
He said that government must also resolve the problems of liquidity in the sector adding that on its part, Government has made provisions in its 2017 Budget to clear its outstanding electricity bills. This we hope, will provide the much needed liquidity injection to support the investors.
Buhari noted that although a lot of problems experienced by his Administration were not created by them, they are determined to deal with them.
One of such issues that the Federal Government is committed to dealing with frontally, he said, is the issue of its indebtedness to contractors and other third parties.
He said that government is at an advanced stage of collating and verifying these obligations, some of which go back ten years, which we estimate at about N2 trillion.
He assured that government will continue to negotiate a realistic and viable payment plan to ensure legitimate claims are settled.
The President said that the government will continue to prioritise defence spending “till all our enemies, within and outside, are subdued.”
Buhari noted government’s efforts on cost containment have continued throughout the year.
He said that they restricted travel costs, reduced board members’ sitting allowances, converted forfeited properties to Government offices to save on rent and eliminated thousands of Ghost workers.
“These, and many other cost reduction measures will lead to savings of close to N180 billion per annum to be applied to critical areas including health, security and education,” he said
Talking specifically on 2017 budget priorities, Buhari noted that Government’s priorities in 2017 will be a continuation of our 2016 plans but adjusted to reflect new additions made in the Economic Recovery and Growth Plan.
He explained that in order to restore growth, a key objective of the Federal Government will be to bring about stability and greater coherence between monetary, fiscal and trade policies while guaranteeing security for all.
He said that the effort to diversify the economy and create jobs will continue with emphasis on agriculture, manufacturing, solid minerals and services.