The Ministry of Power, Works and Housing sector takes the larger chunk of the 30.8% proposed for capital expenditure in the 2018 budget estimate presented by President Muhammadu Buhari to the joint session of the National Assembly on Tuesday.
Key capital spending allocations in the 2018 budget include: N555.88 billion for Power, Works and Housing N263.10 billion for Transportation; N150 billion for Special Intervention Programmes; N145 billion for Defence; N118.98 billion for Agriculture and Rural Development; N95.11 billion for Water Resources; N82.92 billion for Industry, Trade and Investment; N63.26 billion for Interior; N61.73 billion for Education while N109.06 billion is for Universal Basic Education Commission.
Also the sum of N71.11 billion is for Health: N40.30 billion for Federal Capital Territory: N100 billion for Zonal Intervention Projects while N45 billion is for North East Intervention Fund.
He also unveiled plans for the launch of the first African Sovereign Green Bond in December 2017, adding that the bond will be used to finance renewable energy projects which is expected to solve many of our energy challenges, especially in the hinterland.
Buhari also expressed enthusiasm over the Q2 2017 exports with trade surplus of N506.5 billion above import.
While noting that non-oil sector accounted for over 90 percent of total Nominal GDP, the President observed that Government’s revenues are not as diversified yet, adding that Nigeria’s Tax-to-GDP ratio of about 6% is one of the lowest in the world.
In the bid to boost tax revenue, he unveiled plans by the administration to “ensure that all taxable Nigerians comply with the legal requirement to declare income from all sources and remit taxes due to the appropriate authorities.
“Already, we have introduced the Voluntary Assets and Income Declaration Scheme (VAIDS) on the 1st of July, 2017. The Scheme provides non-compliant taxpayers with a nine-month window to regularise their tax status relating to historical periods. In return, overdue interest and penalties will be forgiven. In addition, no investigations or criminal charges will be brought against participating taxpayers. We expect that this Scheme will widen the tax net for both the Federal and State Governments. I am therefore, asking all Nigerians to seize this opportunity and do right thing. Let us not shy away from our duty to build a better Nigeria.”
On Rail, he disclosed that two additional locomotives and 10 standard gauge coaches for the Abuja-Kaduna Rail Line were received adding that the Itakpe-Ajaokuta-Warri Rail Line which was kick-started by the present administration will be commissioned by September 2018 with 7 standard gauge coaches.
“In addition to the road, we have also commenced the extension of the Lagos-Ibadan Standard Gauge Rail Line to connect Apapa and Tin Can Port Complexes. This project will significantly ease the congestion at the ports and enhance both export and import operations.
“This project shall be completed by December 2018. Already, working with the private sector, we have repaired the Apapa Port Narrow Gauge Line which is currently being used to evacuate goods from the port, thereby easing congestion,” Buhari told the lawmakers.
The President also unveiled plans to support investors and State Governments, towards accelerating the establishment of at least 6 Staple Crop Processing Zones, in the first phase.
According to him, the initiative is targetted at developing “infrastructure for the production, processing and storage of strategic commodities. The focus is on backward integration for grains, horticulture, livestock, fisheries and sugar; as well as exportable commodities such as cocoa, cassava and oil palms.”
Through its Social Investment Program, Buhari’s administration is to feed over 4.5 million primary 1 to primary 3 pupils in public schools; engage over 200,000 unemployed graduates have been employed under the N-Power Scheme in education, health and agricultural sectors; disburse N12.5 billion to over 250,000 enterprises to enable entrepreneurs expand their businesses; and suport over 110,000 households through Conditional Cash Transfer programme across the country.
While giving update on the 2017 budget performance, Buhari noted that total revenue of N5.084 trillion from aggregate expenditure of 7.441 trillion, total collections were 14 percent below target as of September 2017, mainly due to the shortfall in non-oil revenues.
“A key revenue shortfall was from Independent Revenues; only N155.14 billion was remitted by September 2017 as against the projected pro-rated sum of N605.87 billion. This represents a 74 percent shortfall, which is very disappointing.
“This recurring issue of under-remittance of operating surpluses by State Owned Entities is absolutely unacceptable. You will all recall that in September 2017, the Joint Admissions Matriculation Board (JAMB) announced that they were ready to remit N7.8 billion back to the Government. The shocking discovery was that in the last decades, JAMB only remitted an aggregate of N51 million.
“This clearly illustrates the abuses that occur in State Owned Entities as well as their potential for increased Independent Revenues, if only people would do the right thing. We all need to play our role to ensure the right thing is done. I would also like to remind Nigerians that the Whistle Blower lines are still open.
“Accordingly, I have directed the Economic Management Team (EMT) to review the fiscal profiles of these agencies, to ensure strict compliance with the applicable Executive Orders and Financial Regulations. There may be a need to consider a review of the Fiscal Responsibility Act and the Executive will be approaching the National Assembly on this issue in due course.
“On the expenditure side, a total of 450 billion Naira of the capital vote had been released as at the end of October 2017. With your support for our funding plan, our target is to release up to 50% of the capital vote for MDAs by the year’s end. We have prioritised payments of our counterpart obligations on our concessionary loans, as well as funding of critical infrastructure and other projects with socio-economic benefits. Furthermore, MDAs have made provisions to carry over to the 2018 Budget, capital projects that are not likely to be fully funded by year-end 2017, to ensure project continuity,” Buhari assured.
In his remarks, Speaker Yakubu Dogara urged President Muhammadu Buhari not to totally abandon the 2017 budget, adding that its fiscal targets must be enforced and provisions complied with as authorised by the Legislature.
He however noted that the 2018 budget passage may suffer delay caused by inadequate consultations between the MDAS and various over- sighting Committees of the National Assembly.
Dogara said: “Mr. President, as legislators, what agitates us is the prospects of totally abandoning the 2017 Budget and the dire consequences of doing so.
“The questions that must be answered include whether we have effectively enforced 2017 fiscal targets and whether managers have complied with the budget as authorized by the legislature.
“Our experience with the implementation of the 2016 budget amply demonstrates that obeying our Appropriation Laws maximises the release of our potentials while violating the Appropriation Laws caps the release of our national potentials.
“This means that we have to redouble our efforts in implementing the 2017 Budget, if we must retire it in January or at the very least rollover most of the projects in 2017 budget to 2018. No need to remind us that fiscal indiscipline is as grievous as corruption which this government is busy eliminating.”
While commending President Muhammadu Buhari for honouring the provisions of the 2016 Appropriation Act which required the budget to last for 12 months in line with the provisions of S. 318 of the Constitution, from May 2016 when it was assented to, to May 2017, he said the singular act “enabled the Executive to report an accomplishment of over N5 trillion expenditure out of the N7.4 trillion budgeted for 2016, an unprecedented record by all standards, made possible only because the execution of the budget was allowed to last for 12 months.That is what the National Assembly has always called for inline with the original intent of the framers of our constitution.
On the 2018 budget preparation, he stated, “Once again, let me place it on record that the 2018 Budget preparations suffer from inadequate consultations between the MDAS and various over-sighting Committees of the National Assembly. Consequently, one can only hope and pray that it does not lead to delay in consideration and passage of the budget.”
He also tasked Buhari to ensure policy consistency and synergy between all stakeholders in order to sustain economic growth and development, and a full implementation of President Buhari’s well crafted and thought-out Economic recovery and Growth Plan which was launched in January 2017.