THOSE who have been wondering where the Federal Government kept recovered funds got an answer yesterday.
About N288.6 billion is in next year’s budget, according to Budget Office Director-General Ben Akabueze, who was fielding questions during the public presentation of the 2017 budget at the old Banquet Hall of the State House, Abuja.
He said: “A total of N288.6 billion. This includes N97.6 billion, which is equivalent of $220 expected from the Swiss, part of what is called Abacha loot recovery. Then it also includes N72 billion that has already been received in recent cases of loot recovery.
“And a balance of N90 billion, other expected recoveries that are at an advanced and reasonable stage that we feel comfortable and confident that they would come through in 2017 and so they have been reflected in the budget.”
Budget and National Planning Minister Udoma Udo Udoma also allayed fears over the non-approval of the Medium Term Expenditure Framework (MTEF) by the National Assembly.
According to Udoma, the National Assembly already has both the MTEF and the 2017 budget proposal and would work on them at its own pace.
Stressing that the government was determined to pull Nigeria out of recession, he said: “We are determined to bring succour to our people. The only way is by taking strong actions to change the current trajectory of the Nigerian economy.
“To get out of the recession and bring the country back on the path of growth, government must find the resources to spend on infrastructure, and to spend to reflate the economy.”
Minister of State for Budget and National Planning Zainab Ahmed also admitted that the Social Intervention Scheme, otherwise called N-Power jobs, piloted by the Federal Government had not performed well.
The programme, she said, encountered teething problems but the issues would be solved in the 2017 budget to meet the scheme’s objective.
Giving a background to the budget proposal earlier, Udoma said: “Global economic activities remained sluggish in 2016. In particular, global GDP growth rate is projected at 3.1% for 2016 from 3.2% in 2015. Due to: (i)Lower-than-expected economic activity in the U.S, (ii) Uncertain economic, political and institutional implications of BREXIT (iii) Slowdown in China’s growth.
“(iv) Weak demand in advanced economies and its spill-over effects (v) Geopolitical tensions in several countries.”
In spite of the developments, he said that the outlook remained bright as global GDP growth rate is expected to rise to 3.4% in 2017.
The challenges in the domestic environment in 2016 included Crude oil production shut-ins resulting from vandalism of oil facilities, insurgency in parts of the Northeast, fuel shortages and increase in electricity tariffs, kerosene and PMS prices in the first half of the year and Foreign Exchange (FX) scarcity.
The factors, Udoma said, have constrained fiscal operations, real sector activities, and the external accounts.
Other challenges in the domestic economy include Contraction in growth (-2.24% in Q3), high unemployment rate (13.9% as at Q3), higher inflation rate (18.5% as at November 2016), pressures on foreign reserves ($25.04 billion as at 14th December), and slowdown in corporate sector, resulting in lower credit quality and rising non-performing loans.
Speaking on the Nigerian Economic Recovery and Growth Plan (NERGP), the minister said that a Medium Term Economic Recovery and Growth Plan (ERGP 2017 – 2020) was being finalised, which addresses the current economic challenges and is aimed at restoring growth.
“The plan builds on the existing Strategic Implementation Plan (SIP), and contains strategic objectives and enablers required to revive the economy. The strategic objectives of the NERGP are: (i) Pulling the economy out of recession; (ii)Investing in our people (iii) Laying the foundation of diversified, inclusive and sustainable growth.”
On the approach to the Budget, he said: “The 2017 Budget is designed to expand partnership between public and private sectors, including development capital to leverage and catalyse resources for growth.
“Other key objectives of the 2017 Budget include: (i) focusing on critical on-going infrastructure projects such as roads, railways, power, ICT, etc., that have quick positive effects on the economy; (ii) utilising Special Economic Zones and Industrial Parks as vehicles to accelerate domestic economic activity for innovation and wealth creation; (iii) contributing to food security and creating platform for agro-business in agriculture supply chains through the Agriculture Green Alternative Plan; (iv) establishing a Social Housing Fund to deepen the mortgage system and expand its availability across all states of the Federation; (v) encouraging and stimulating the growth of small and medium scale industries for innovation, job creation, productivity and wealth creation; and (vi) providing social safety nets for poor and vulnerable Nigerians.”
The key assumptions and macro-framework for the 2017 Budget are: (i)Oil production – 2.2mbpd, (ii)Benchmark oil price – US$42.5/b, (iii)Exchange rate – N305/US$, (iv)Inflation rate- 15.74%, (v)GDP Growth Rate- 2.5%, (vi)Nominal Consumptio (N’trillion)- 87.95, (vii)Nominal GDP (N’trillion)-107.96
According to him, the Key Budgetary Reform Initiatives to improve the revenue base of the country include: (i) Subjecting the JV operations to a new funding mechanism, which will allow for Cost Recovery, (ii) Sustaining the use of TSA to monitor the financial activities of over 900 MDAs from a single platform; (iii) Broadening the tax base, improve effectiveness of revenue collecting agencies, improve tax compliance etc;
(iv) Reducing leakages by tacking trade mis-invoicing and introducing the single window to drive Customs efficiencies; (v) Improving the performance of independent revenue of government by ensuring that all MDAs (particularly revenue generating MDAs) present their budget in advance, and remit their operating surpluses as required by the FRA; (vi) Extension of the Integrated Personnel Payroll Information System (IPPIS) to all MDAs.
Giving an overview of the Revenue framework, Udoma said: “Based on the key assumptions and budgetary reform initiatives, the 2017 Budget envisages a total revenue of N4.94 trillion, exceeding FY 2016 projection by 28%. The Projected revenue receipt from oil is N1.985 trillion and Non-oil is N1.373 trillion. The contribution of oil revenue is 40.2% compared to 19% in FY 2016 driven mainly by JVC cost reduction, higher price, exchange rate and additional oil related revenues.”
The largest recurrent allocations, according to him, are i. Ministry of Interior – N482.37 billion; ii. Ministry of Education – N398.01 billion; iii. Ministry of Defence – N325.87 billion; iv. Ministry of Health – N252.86 billion.
“These four MDAs collectively take up about N1.46 trillion (about 70% of the combined provision for personnel and overhead). They have the largest share because of the size of their personnel. Some of the agencies and parastatals under these MDAs are yet to be captured on the Integrated Personnel Payroll Information System (IPPIS) platform.
“The sum of N2 billion has been provided in the 2017 Budget for the capturing to ensure all personnel that are not enrolled on the platform are captured.
Udoma said the Administration had allocated at least 30% of the Budget to Capital expenditure against 16% allocation in 2015.
“In dollar terms, the 2017 budget proposal (at $23.80bn) is lower than 2016 estimates ($30.76bn)… we have grown the size of the Budget from 4.7% in 2015 to 5.9% in 2016 and to 6.7% in 2017. Compared with South Africa (20.7%) and Ghana (19.2%) as at 2015, this is very low. The ratio of capital spending in total increased from 16% in 2015 to 30% in 2016 and 30.7% in 2017.
“The increase in infrastructure spending is expected to enhance revenue generation opportunities and over time significantly reduce deficit,” Udoma said.
Tag: 2017 budget
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N289 billion looted fund captured in 2017 Budget
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Buhari, recession and 2017 Budget
NOT a few Nigerians have ugly tales to tell about the economic recession that took over the country in the past months.
Signs of the economic woes started showing towards the tail end of the ex-President Goodluck Jonathan’s administration.
Prices of oil in the international market that used to sell above $100 per barrel started tumbling.
It got as low as $30 in the wake of President Muhammadu Buhari’s administration with great consequences for the Nigerian economy that was largely dependent on oil revenue.
It was also believed in some quarters that Nigeria has stayed long in the recession because the savings that should have been made from past high sales of oil per barrel were frittered away by past administrations.
Many Nigerian economists saw the hard time coming long before Buhari’s tenure was inaugurated.
It got so bad under Buhari that more than 27 states of the Federation could no longer pay workers salaries and allowances in their states.
They had to run cap in hand to the Federal Government for bailouts in order to settle accumulating debts and meet other obligations in the states.
As if that was not enough, many Nigerians were further impoverished with the high inflation rate that resulted from the high exchange rate of the naira to a dollar and increase in pump price of fuel from N86 to N145 per litre in May.
While the economy and Nigerians were suffering from low prices of oil in the international market, weak purchasing power of the naira and the new pump price regime at the petrol stations, their situations were further worsen by commencement of bombing and destruction of oil pipelines and power installations in the Niger Delta early this year.
The destructions not only cut daily oil production by more than 50 percent, reduced oil revenue and pushed the country deeper into recession, they also made implementation of the N6.06 trillion 2016 Budget very difficult.
But President Buhari was confident that the N7.3 trillion 2017 Budget proposal he laid before the National Assembly last Wednesday will take Nigeria out of the recession.
In his Eid-el-Maulud message to Nigerians last week Sunday, Buhari said: “As we look forward to 2017 with hope and huge expectations, let me assure you that with collective dedication and hard work, we will overcome the mountain of economic difficulties, and return our country to the path of prosperity.
“The 2017 Budget proposals which I will lay before the National Assembly on Wednesday, will contain measures that we are confident will get the nation out of its economic woods.”
The 2017 Budget proposal laid before the lawmakers was based on oil benchmark price of $42.5 per barrel against $38 in the 2016 Budget.
While daily oil production was still estimated at 2.2 million barrels like in the 2016 Budget, exchange rate in the 2017 Budget was fixed at N305 to one dollar against N195 to a dollar in 2016 Budget.
The 2017 Budget also increased revenue projection to N4.94 trillion from N3.86 trillion in 2016 Budget.
Despite being difficult to implement the 2016 Budget due to a number of factors, the 2017 Budget, which has expenditure estimate higher by N1.238 trillion, has more deficit than in the 2016 Budget.
While the 2016 Budget has N2.2 trillion deficit representing 2.14% of GDP and financed by borrowing, the deficit in the 2017 Budget proposal is N2.36 trillion representing 2.18% of GDP and to be financed by N2.32 borrowing.
With all these, it will not be out of place to say that the 2017 Budget proposal may face more challenges to implement than the 2016 Budget except if oil prices in the international market and daily production in Nigeria continue to rise.
But very optimistic, the President told the lawmakers: “This Budget, therefore, represents a major step in delivering on our desired goals through a strong partnership across the arms of government and between the public and private sectors to create inclusive growth.
“Implementation will move to centre-stage as we proceed with the process of re-balancing our economy, exiting recession and insulating it from future external and domestic shocks.” He added
While the National Assembly will settle down to consider the 2017 Budget proposal after the Christmas and New Year break, it is hoped that those factors that worked against proper implementation of 2016 Budget or made Nigerians not to feel the real impact of the 2016 Budget, will urgently be addressed in order to succeed in taking Nigeria out of recession in 2017.
Apart from continuation of the economy diversification efforts of the government in 2017, nothing should be allowed to work against the 2017 Budget including hostilities in the Niger Delta.
It is also hoped that the fortune of oil in the international market will really improve in 2017.
More kudos for Osinbajo
Vice President Yemi Osinbajo last Thursday received more kudos that came his way. The 73th session of the National Economic Council (NEC) meeting applauded him and gave him standing ovation.
The members were marveled by his style of leadership. As the Chairman of NEC, he was commended for the way the Buhari presidency have been working transparently with state governments in the management of the national economy.
He was specifically hailed for ensuring that NEC meeting held every month since beginning of the administration.
Governor Rochas Okorocha of Imo State had moved a motion for the standing ovation just before the Council meeting ended.
The motion was unanimously supported as all members of the Council stood up and applauded.
Speaking on what transpired at the closed-door meeting, Kaduna State Governor, Nasir el-Rufai said: “The level of transparency that has been demonstrated by the Federal Government and the Vice President as Chair of this Council has never been demonstrated in this villa.”
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N289bn looted funds captured in 2017 Budget
The Director-General of Budget Office, Ben Akabueze on Monday disclosed that a total of N288.6 billion looted funds partly recovered have been captured in the 2017 Budget proposal presented to the National Assembly by President Muhammadu Buhari last week.
He spoke while fielding questions during the Public Presentation of the 2017 Federal Budget at the old Banquet Hall of the State House, Abuja.
Akabueze said: “A total of N288.6 billion. This includes N97.6 billion which is equivalent of $220 dollars expected from Switzerland, part of what is called Abacha loot recovery. Then it also includes N72 billion that has already been received in recent cases of loot recovery.
“And a balance of N90 billion other expected recoveries that are at an advanced and reasonable stage that we feel comfortable and confident that they would come through in 2017. So they have been reflected in the budget.”
The Minister of Budget and National Planning, Udoma Udo Udoma, also allayed fears over the non approval of the Medium Term Expenditure Framework, (MTEF) presented to the National Assembly before the presentation of the 2017 budget proposal.
Udoma said the National Assembly already have the MTEF and the 2017 budget proposal and would work on them at their own pace.
He said: “With respect to the question about the MTEF, the National Assembly has the MTEF which has been updated. And they have the budget, so everything is with them. So, they will determine how they treat it. I am sure the sequence will be they do the MTEF before they do the budget. But everything is with the National Assembly.”
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2017 Budget: Buhari sets up committee on revenue generation
President Muhammadu Buhari has constituted a committee to raise additional revenues from oil and other sectors to support the funding of the 2017 budget.
The Minister of Budget and National Planning , Sen. Udoma Udo Udoma, made this known at the public presentation of the 2017 budget proposal in Abuja on Monday, the News Agency of Nigeria (NAN) reports.
He stated the report of the committee would be ready in time for the National Assembly to take into account while considering the budget next year.
The minister said, “We should not allow ourselves to be discouraged by those who say we can’t find the money to fund the spending required to implement this budget.
“We must, and we can, find the resources.
“We will challenge our revenue generating agencies, particularly the FIRS and Customs to improve their efficiencies and broaden their reach so as to achieve the targets set for them in the 2017 budget.
“Indeed, a cabinet committee has been set up by President Muhammadu Buhari to come up with innovative and creative ways to raise additional revenues from the oil sector, and other sectors, to support the funding of the 2017 budget.
“The President is determined that we must find the resources; we must fund this budget; we must implement this budget; we must exist recession and we must move back on the path of growth.
“The report of that committee will be ready in time for the National Assembly to take this into account in considering the budget in the New Year, when they return from their Christmas recess.’’
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Obaseki presents 2017 budget to Edo Assembly
Edo State Governor, Mr. Godwin Obaseki, on Monday presented a budget estimate of N150bn for the 2017 fiscal year to the state House of Assembly.
The 2017 budget is 29 percent larger than the 2016 estimate.
Tagged a “Budget of Consolidation and Prosperity, “Obaseki said recurrent expenditure is N74.9bn, while capital expenditure is N75.1bn.
The governor said the budget has a deficit of N25bn which would be funded by external borrowing in the first tranche of the World Bank support project.
He said the 2017 budget was planned around six key policies including economic revolution, institutional reforms, social welfare enhancement and tourism among others.
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Rural electrification, roads main thrust of 2017 budget – Ortom
Benue State Governor, Samuel Ortom, has disclosed that rural electrification and roads would form the major thrust of the 2017 budget.
He spoke when the Sankera Youths Progressive Forum paid a solidarity visit on him at the Benue Peoples House yesterday.
Governor Ortom said particular emphasis would be laid on the rural areas because of majority of the people of the state live there.
He also announced that his administration would also review revenue collection points across the state with a view to improving on the current internally generated revenue.
Governor Ortom lamented that the total amount generated for the state was hovering around N250 million as a result of leakages and non remittance of money collected a development he said was affecting the plans of his administration to meet financial obligations.
The governor promised to mobilize the Sole Administrator of Ukum local Government Area to rehabilitate the yam market road in Zaki Biam even as he assured of the provision of more critical infrastructure in the area.
He said his administration has recorded major milestones in the health, education, and other sectors despite the financial challenges confronting the state.
Earlier, Mr. Saater Uva, Orzer Ikyondo, and Mde Jiji who spoke on behalf of Ukum, Katsina-Ala and Logo appealed to the Governor to revive the water schemes initiated by the late Governor Aper Aku in the area, rehabilitate town ship roads and provide electricity to their communities.
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Senate will fast- track 2017 budget – Saraki
Senate President, Bukola Saraki, on Thursday assured that the Senate will work assiduously to fast -track the consideration and passage of the 2017 budget.
He gave the assurance in his remarks before the Senators embarked on their Christmas recess.
He said the Senate would address the budget and “see how we can fast track and do it at the earliest possible time when we return for plenary on January 10, 2017.”
President Muhammadu Buhari presented the 2017 budget to the joint session of the National Assembly on Wednesday.
Saraki said, “The leadership supporting me plus all our colleagues. I was just looking at the statistics of what we have been able to achieve from the time we came back and we are discussing the economic recession. But we did go ahead to agree to address some of our 11 economic bills at this shortest period of time. All these bills have gone for second reading and they have gone for public hearing and they are all about to be laid within the short period of time.
“More importantly, between September, 2016 when we came into this session till now, we have passed about 64 bills for second reading. Also between September 9 and now we have passed 18 bills. To give you an idea from the entire May 2015 to September, 2016 we only passed 14 bills.
“In one and half years what we did in this three months surpassed what we have done in a year and half and concurrence with the House of Representatives we did about 34.
“This is truly very commendable and it won’t have been done without the support of everybody. I hope that after the break that we truly all deserve we would come back to address the issue of budget and see how we can fast track and do it at the earliest possible time.”
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Obaseki seeks Assembly approval for budget presentation
Edo State Governor, Godwin Obaseki, will on Friday present the 2017 appropriation bill subject to approval by the state House of Assembly.
This was contained in a letter sent to the Assembly seeking approval to present the budget.
The letter dated December 14 was signed by the Secretary to State Government, Mr. Osarodion Ogie.
The letter reads, “I write to inform the House that governor Godwin Obaseki proposes to present the year 2017 appropriation bill on Friday, December 16, 2016. “
The speaker, Justin Oknonboh, in his reaction, said the House will meet to consider the governor’s request.
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Buhari presents 2017 Budget to NASS
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 saidTalking 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. -
Lagos Assembly orders committees to start work on 2017 budget immediately
Lagos State House of Assembly has ordered all its standing committees to earnestly work on the budget estimates for 2017 by inviting Ministries, Departments and Agencies (MDAs) of governments for the defence of the proposals. The directive was given at plenary on Thursday by the Speaker, Hon.Mudashiru Obasa?
The Majority Leader, Hon. Sanai Agunbiade, urged the various committees of the House to get all the necessary papers from the MDAs in order to assist in carrying out thorough verifications of their proposals. The House resolved to go ahead with the invitation of the MDAs having taken the first and second readings simultaneously of the budget proposal as presented by the governor, Akinwunmi Ambode.
Ambode had on Tuesday 29th November, presented a budget proposal of N813billion to the House of Assembly, assuring that the budget would be judiciously implemented to continue the massive infrastructural renewal and the enhancement of Lagos as one of the foremost tourism and investment destination in Africa.
The lawmakers who took turns to debate the components of the estimates, expressed satisfaction over the proposal, saying the readiness of the state government to spend more on capital expenditure indicated the sensitivity of government to the plight of the people.
Some of the lawmakers also allayed the fears of the public on the possibility of government to be able to generate 70 percent of the Internally Generated Revenue (IGR) as proposed by the Governor.
In his comments, Chairman House committee on Public Account (local), Hon. Bisi Yusuff, stated that the budget proposal would address the challenges of unemployment. Chairman House committee on Waterfront, Hon. Gbolahan Yishawu, said that “I am gladdened the budget estimate strives to take care of making money available to the people.”
The Chief Whip, Hon. Rotimi Abiru, expressed reservation over the ability of the state government to generate the 70 percent IGR being proposed by the Governor. Abiru, however, pointed out that “the MDAs have not given detailed reports of third quarter of 2016.”