Reactions Trail N7.2trn 2017 Budget

Mixed reactions have continued to trail the 2017 National budget of N7.298trillion presented to a joint sitting of the National Assembly, Wednesday by President Muhammadu Buhari.
While some see hope of recovery in the implementation of the 2017 budget as proposed, many Nigerians say the deficit budget and the quantum of borrowing needed to fund it has no promise of relief from economic hardship.
The 2017 appropriation bill of N7.298 trillion represents 20.4 per cent increase over the 2016 estimate.
Buhari, in his presentation, said the budget was predicated on a benchmark of $42.5 per barrel of oil, as against $38 in 2016, a projection of the production of 2.2million barrels per day and the exchange rate of N305 per dollar as against N197 per dollar, bench mark for 2016 budget.
Further breakdown of the Budget shows an allocation of 30.7 per cent of the budget to capital expenditure aimed at pulling the economy out of recession.
Key capital spending provisions would be on power, works and housing, which got the highest budgetary allocation of N529billion, followed by transport; N262billion, social intervention N150 billion.
Defence got N140 billion while the judiciary got an increased allocation of 100 billion naira.
Education got N50billion while Universal Basic Education got a direct allocation of N92billion, while the sum of N51 billion was also allocated to health.
According to the President, “We will continue to fortify our defence spending till all our enemies within and without are subdued, the people who voted for us are waiting for us to change the course of this nation, we are increasing funding to the judiciary in order to allow them function even better.”
Further breakdown of the budget proposals as submitted by the President shows that N419.02 billion was earmarked for statutory transfers, N1.66trillion for Debt servicing, N177.46billion as sinking fund.
Others are N2.98trillion for non debt re-current expenditure.
The president added that aggregate revenue available to fund the federal budget was N4.94 trillion, which is 28 per cent higher than 2016 full year projections.
Oil, according to him, is projected to contribute N1.985 trillion of the N4.94trillion, while non oil revenues, largely comprising Companies Income Tax, Value Added Tax, Customs and Excise duties, and Federation Account levies are estimated to contribute N1.373trillion.
“We have set a more realistic projection of N807.57 billion for independent revenues, while we have projected receipts of N565.1 billion from various recoveries.
Other revenue sources, including mining, amount to N210.9 billion”, he said.
The President added that the 2017 budget has a deficit plan of N2.36 trillion, which is about 2.18 per cent of GDP and to be financed mainly by borrowing, which was projected to be about N2.32 trillion.
“Our intention is to source N1.067trillion or about 46 per cent of this borrowing from external sources while, N1.254trillion will be borrowed from the domestic market”, he explained.
But in the votes for recurrent expenditure, the Ministry of Interior has the largest allocation of N482.7billion, followed by the Ministry of Education which has N390billion, Defence N325billion, Health N252billion, among others.
He also said that, the 2017 budget, will focus on the development of infrastructure, especially rail, road and power.
Buhari said he expects the 2017 budget to better the lives of Nigerians in a greater measure than that of 2016.
In his speech, the Senate President, Bukola Saraki, said the 2017 budget must ease the economic burden which is already overwhelming Nigerians.
He called on the executive during the formal presentation of the 2017 Appropriation Bill to implement the budget such that the lots of the less privileged Nigerians are made better.
He also said there is no hiding the fact that Nigerians are presently experiencing economic hardship.
According to him, the 8th National Assembly will work with the executive to ensure that it surmounts the present economic recession by passing the 11 economic reform laws alongside the 2017 budget.
“Our people must see that the singular pre-occupation of government is the search for solution to the current economic hardship; and the commitment to ease their burden,” Saraki said.
“They don’t want to know what political parties we belong, what language we speak or how we worship God. They have trusted their fate into our hands, and they need us now more than ever, to justify the trust that they have reposed on us”, he stated.
He added that: “The people of Nigeria will pardon us if we do some things wrong. But they will not forgive us if we do nothing. And that is why, Mr. President, the two chambers have taken a position that whatever may be our differences, or opinions on issues of the economy we will all work with one common purpose for this reason.”
Saraki noted that when the National Bureau of Statistics (NBS) confirmed that the nation’s economy has slumped into a recession, “the National Assembly rose with one voice.
“Through a joint resolution, we recommended that you make a ‘state of the nation’ address on the plan of government to get us out of recession and have 20 important Executive actions that in our view needed to be taken to get the economy back on track,” Saraki said.
“The National Assembly on its part listed and prioritized 11 economic reform bills for passage. We intend to get these bills ready alongside the 2017 Appropriation bill. We believe that the core elements of these bills will aid the Executive in mobilizing the required private capital into the general economy, but especially the infrastructure market”, he stated.
The Senate President said the harsh economic realities confronting the nation calls for greater collaboration by all arms of government to find urgent and sustainable solutions.
“It is in times like this, when we are challenged from all sides that we need to develop new relationships and cultivate more friends. No one can clap with one hand and expect to be heard. This is the time when compromise, engagement is the tool necessary for successful collaboration and cooperation.
“This is why I encouraged the Executive to continue with its engagement plans across all sections and stakeholders in the country particularly with our brothers in the Niger Delta and all parts of the country where instability is impacting on our collective economic and security aspirations,” he stated.
Similarly, the Speaker of the House of Representative, Hon Yakubu Dogara, described as frustrating, the repeated experience of poor implementation of the nation’s annual budget.
He appealed to Buhari to allow the capital component of the 2016 budget up to May, 2017, saying “it is certainly frustrating that we go through the annual Budget cycle/process of Budget presentation by Mr President, processing of same by the National Assembly, passage and signing into law every year, without unlocking the full potentials of such budgets for our citizens.
“This is because implementation and execution of the agreed Budget is always a major challenge year in year out. Sometimes, implementation rate is as low as 30 per cent, most times it is never higher than 50 per cent at the best of times. This has led to unacceptably high rate of abandonment of projects and distortions in Nigeria’s economic planning. Of course, this is an inherited problem for Mr President as he has only effectively passed through one budget cycle”.
“An Appropriation Act must be allowed to run for an uninterrupted period of twelve months, for the Executive to have enough time to execute it. This means that both Mr. President and the National Assembly must find a way to continue the execution of the 2016 Budget especially the capital component till May 6, 2017, which is twelve months from the date Mr President signed the 2016 Appropriation Bill.
“The problem is that most often the recurrent component of the Budget is implemented to an appreciable level, but the capital component execution is very low. It is crystal clear that the capital component of the 2016 Budget cannot realistically be implemented for only six months period, considering the time required for procurement processes and the raising of the revenue, including loans by government”.

Nneka Amaechi-Nnadi, Abuja