Highlights of 2018 FGN Budget of Consolidation Presentation Speech

Budget and Plans
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Wednesday, November 08, 2017 3:55PM / Arthur Steven Asset Management Research 

The 2018 FGN Budget termed budget of consolidation is expected to reinforce and build on the achievements of previous budgets, sustain reflationary policies of the government and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020.

Key Parameters and Assumptions for The 2018 Budget
The key parameters and assumptions for the 2018 Budget are as set out in the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). These include the following:
a.      Benchmark oil price benchmark of US$45 per barrel;

b.      Oil production estimate of 2.3 million barrels per day, including   condensates;

c.       Exchange rate of N305/US$ for 2018;

d.      Real GDP growth of 3.5 percent; and

e.      Inflation Rate of 12.4 percent. 

Federally-Collectible Revenue Estimates

Total federally-collectible revenue is estimated at N11.983 trillion in 2018 of which oil and gas will contribute 53%  .However ,total receipts from the non-oil sector is projected to be N5.597 trillion.
 

Federal Government Revenue Estimates
The Federal Government’s estimated total revenue is N6.607 trillion in 2018 and Oil revenues is projected to be N2.442 trillion. To accentuate the revenue diversification policy of the , Non-oil and other revenue is projected to be N4.165trillion which  includes : Share of Companies Income Tax (CIT) of  N794.7 billion, share of Value Added Tax (VAT) of  N207.9 billion , Customs & Excise Receipts of  N324.9billion , FGN Independently Generated Revenues (IGR) of N847.9 billion , FGN's Share of Tax Amnesty Income of  N87.8 billion , and various recoveries of N512.4 billion , N710 billion as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of N678.4 billion .

Proposed Expenditure For 2018
A total expenditure of N8.612trillion is proposed for 2018, an increase of 16% above the 2017 Budget estimate and it comprises: 
a. Recurrent Costs of N3.494trillion;

b. Debt Service ofN2.014trillion;

c. Statutory Transfers of about N456billion;

d. Sinking Fund of N220 billion (to retire maturing bond to Local Contractors);

e. Capital Expenditure of N2.428 trillion (excluding the capital component of Statutory Transfers). 

Fiscal Deficit  
It is expected that FGN fiscal operations would result into a deficit of N2.005trillion or 1.77% of GDP. However, the government plans to finance the deficit partly by new borrowings estimated at N1.699 trillion which will be sourced equally from both domestic and external sources. The balance of the deficit of N306 billion is to be financed from proceeds of privatization of some non-oil assets by the Bureau of Public Enterprises (BPE).  

Capital Expenditure

Key capital spending allocations in the 2018 Budget include: 
a.      Power, Works and Housing: N555.88 billion;

b.      Transportation: N263.10 billion;

c.       Special Intervention Programmes: N150.00 billion;

d.      Defence: N145.00 billion;

e.      Agriculture and Rural Development N118.98 billion;

f.        Water Resources: N95.11 billion;

g.      Industry, Trade and Investment: N82.92 billion;

h.     Interior: N63.26 billion;

i.        Education N61.73 billion;

j.        Universal Basic Education Commission: N109.06 billion;

k.      Health: N71.11 billion;

l.        Federal Capital Territory: N40.30 billion;

m.   Zonal Intervention Projects N100.00 billion;

n.     North East Intervention Fund N45.00 billion;

o.      Niger Delta Ministry: N53.89 billion; and

p.      Niger Delta Development Commission: N71.20 billion. 

Recurrent Expenditure
Key figures earmarked under this item include :
a.      N510.87 billion for Interior;

b.      N435.01 billion for Education;

c.       N422.43 billion for Defence; and

d.      N269.34 billion for Health.  

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