Nigeria’s government says despite shrinking oil revenues, it was able to generate a total of N2.17trillion revenues as at end September 2016, representing 75 percent of total projections for this fiscal year.
Releases so far for capital and recurrent expenditures presently amounts to N3.58trillion representing 79percent of the prorated figures in the budget.
President Muhammadu Buhari said on Wednesday while presenting the proposed N7.298 trillion proposed 2017 budget to a joint session of the National Assembly that the releases so far were despite the fact that government aggregate revenue inflow were below projections.
“As at 30 September 2016, aggregate revenue inflow was N2.17 trillion or 25percent less than pro rated projections. Similarly, N3.58 trillion had been spent by the same date on both recurrent and capital expenditure, Buhari said adding that this is equivalent to 79percent of the pro rated full year expenditure estimate of N4.54 trillion as at the end of September 2016,” the president stated.
He said despite huge financial challenges faced by the country, debt service obligations and personnel costs have been met while overhead costs have been largely covered.
In his speech shortly before presenting the 2017 budget estimates a the joint session, Buhari said the releases for capital projects are by far the highest in recent history.
“Although capital expenditure suffered as a result of project formulation delays and revenue shortfalls, in the five months since the 2016 Budget was passed, the amount of N753.6 billion has been released for capital expenditure as at the end of October 2016.
“It is important to note that this is one of the highest capital releases recorded in the nation’s recent history. In fact, it exceeds the aggregate capital expenditure budget for 2015” Buhari said at the National Assembly.
The 2016 Budget of change was predicated on a benchmark oil price of US$38 per barrel, oil production of 2.2 million barrels per day and an exchange rate of N197 to the US dollar.
On the basis of these assumptions, aggregate revenue was projected at N3.86 trillion while the expenditure outlay was estimated at N6.06 trillion. The deficit of N2.2 trillion, about 2.14% of the GDP was expected to be mainly financed through borrowing.
The implementation of the 2016 Budget, assented to in May this year has been largely hampered by a combination of relatively low oil prices in the first quarter of the year, and disruptions in crude oil production leading to significant shortfalls in projected revenue.
This, according to the President negatively affected revenue collections by the Federal Inland Revenue Service and the Nigerian Customs Service.
The President explained that the 2016 N6.06trillion budget of change was prepared on the principles of zero based budgeting to ensure resources were prudently managed and utilized solely for the public good. The same principles were used in the preparation of the 2017 budget, he said.
On efforts to reflate the economy, Buahri said the government will continue to focus on the stabilisation of sub-national government finances as a key objective to stimulate the economy.
He recalled that in June 2016, a conditional Budget Support Programme was introduced, which offered State Governments N566 billion to address their funding shortfalls.
To participate, State Governments were required to subscribe to certain fiscal reforms centered around transparency, accountability and efficiency.
For example, States as part of this program were required to publish audited accounts and introduce biometric payroll systems with the goal of eliminating ghost workers.
Cost cutting measures which include restricted travel costs, reduced board members’ sitting allowances, conversion of forfeited properties to Government offices to save on rent and elimination of ghost workers the President said will lead to savings of close to N180 billion per annum which will be applied to critical areas including health, security and education.
He said work has also resumed on a number of stalled infrastructure projects such as the construction of new terminals at the country’s four major airports.
While major road projects, key power transmission projects, and the completion of the Kaduna – Abuja railway have also commenced.
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