President Muhammadu Buhari on Wednesday presented a total expenditure of N8.83 trillion in 2019 Budget Proposal tagged “Budget of Continuity” to the National Assembly.
He factored in, the implementation of the N30,000 National Minimum Wage into the budget proposal, informing the lawmakers that a bill to that effect was on its way to the National Assembly.
In order to maintain peace in the Niger Delta, Buhari said the provision of N65 billion for the Presidential Amnesty Programme had been retained in the 2019 budget. Similarly, he disclosed that the sum of N45 billion had been provided for the North East Intervention Fund, as well as the sum of N10 billion Naira as take-off grant for the North East Development Commission.
Buhari who was accompanied to the National Assembly by Vice President, Yemi Osinbajo, and members of the Federal Executive Council (FEC), led by the Secretary to the Government of the Federation, Boss Mustapha, said the N8.83 trillion estimated expenditure for 2019, included grants and donor funds of N209.92 billion.
The president who noted that this was his last Budget Speech to the 8th National Assembly, explained that: “This provision is less than the 2018 FGN appropriated expenditure estimate of N9.12 trillion. However, it is higher than the N8.6 trillion originally proposed by the Executive Branch to the National Assembly for 2018.”
He added that the budget deficit was projected to decrease to N1.86 trillion (or 1.3 percent of GDP) in 2019 from N1.95 trillion projected for 2018. This reduction, he said was in line with “our plans to progressively reduce deficit and borrowings.”
He said aggregate expenditure comprises: Recurrent Costs of N4.04 trillion, Debt Service of N2.14 trillion; Statutory Transfers of about N492.36 billion, Sinking Fund of N120 billion which would be used to retire maturing bond to local contractors and Capital Expenditure of N2.031 trillion including capital supplementation but excluding the capital component of Statutory Transfers.
President Buhari further explained that the 2019 Budget Proposal “is intended to further place the economy on the path of inclusive, diversified and sustainable growth in order to continue to lift significant numbers of our citizens out of poverty.
“The underlying drivers of the 2019 revenue projections have been adjusted to reflect current realities. On the expenditure side, allocations to Ministries, Departments and Agencies of Government were guided by the 3 objectives of the Economic Recovery and Growth Plan (ERGP), which are, (i) Restoring and Sustaining Growth; (ii) Investing in our People and (iii) Building a Globally Competitive Economy.”
Buhari informed the lawmakers that his administration had prioritised the completion of already ongoing projects as opposed to starting new ones.
On the National Minimum Wage he said: “Let me say something about the minimum wage issue. I am committed to addressing the issue of a new minimum wage and I will be sending a bill to the National Assembly on this. However, in order to avoid a fiscal crisis for the Federal government, as well as the states, it is important to devise ways to ensure that its implementation does not lead to an increase in the level of borrowing.
“I am accordingly, setting up a High Powered Technical Committee to advise on ways of funding an increase in the minimum wage, and the attendant wage adjustments, without having to resort to additional borrowings.
“The work of this Technical Committee will be the basis of a Finance Bill which will be submitted to the National Assembly, alongside the Minimum Wage Bill. In addition, the Technical Committee will recommend modalities for the implementation of the new minimum wage in such a manner as to minimise its inflationary impact, as well as ensure that its introduction does not lead to job losses.”
The president proposed a $60 per barrel oil price for the budget, put oil production estimate at 2.3 million barrels per day, including condensates; exchange rate of N305/$; Real GDP growth of 3.01 percent; and Inflation Rate of 9.98 percent.
He said: “Notwithstanding the recent softening in international oil prices, the considered view of most reputable analysts is that the downward trend in oil prices in recent months is not necessarily reflective of the outlook for 2019. However, as a responsible administration, we will continue to monitor the situation and will respond to any changes in the international oil price outlook for 2019.
“With regard to oil production, I have directed the NPPC to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day.”
Buhari put government estimated revenue at N6.97 trillion (which is 3 percent lower than the 2018 estimate of N7.17 trillion), consisting of oil revenue projected at N3.73 trillion while non-oil revenue is estimated at N1.39 trillion.
According to him, “we have allowed for N305 billion ($1 billion) for under-recovery by NNPC on PMS in 2019. We will continue working to bring it downwards so that such resources are freed up to meet the developmental needs of our people.
“Let me also take this opportunity to address and clarify the under-recoveries or subsidy on petrol. In a period of economic challenges where purchasing power is weak, we must reduce some of the burden on Nigerians.
“The problem with subsidies in the past is abuse and corruption. Today the government through the NNPC is the sole importer of PMS and therefore, the under-recovery is from the NNPCs trading account. This means the possibility of some marketers falsifying claims is removed.”
According to him, “the estimates for non-oil revenue consists of N799.52 billion from Companies Income Tax (CIT), N229.34 billion from Value Added Tax (VAT) and Customs Duties of N302.55 billion. We have reduced our expectation from Independent Revenues to N624.58 billion. Other revenues expected in 2019 include various recoveries of N203.38 billion, N710 billion as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of N104.11 billion.”
President Buhari said the provision for Statutory Transfers in 2019 is N492.36 billion which is a seven- percent decrease from 2018. He explained that “transfers to Niger Delta Development Commission (NDDC) and Universal Basic Education Commission (UBEC) are projected to be higher as they are directly related to the quantum of oil revenue.”
On debt management, the president said the sum of N2.14 trillion had been provided for debt service. “Of this amount, 80 percent is to service domestic debt which accounts for about 70 percent of the total debt. Although our national debt is within sustainable limits, we need to increase our domestic resource mobilisation to bring down our debt-revenue ratio over the medium term.”
Buhari further stated that a substantial part of the recurrent cost proposal for 2019 was for the payment of salaries and overheads in ministries providing critical public services such as: N569.07 billion for the Ministry of Interior; N435.62 billion for the Ministry of Defence; N462.24 billion for the Ministry of Education and N315.62 billion for the Ministry of Health.
“The allocation to these ministries represent significant increases over votes in previous budgets, underscoring our commitment to increase investment in national security and human capital development,” he said.
For personnel costs, Buhari put the estimate at N2.29 trillion, which he said currently amounted to nearly 40 percent of projected revenues. “Substantial savings have been made from wider use of the Integrated Personnel Payroll Information System platform. I have directed that all MDAs must implement the IPPIS by March, 2019. We have made provisions for staff promotion arrears and recruitments by the armed forces, police and para-military agencies.
“We have also provided for the settlement of inherited outstanding pension liabilities. Again we have included provisions for the implementation of a new national minimum wage.
“Furthermore, one percent of the Consolidated Revenue Fund amounting to N51.22 billion has been earmarked for the Basic Health Care Provision Fund, and other related commitments.
“Let me say something about the minimum wage issue. I am committed to addressing the issue of a new minimum wage and I will be sending a bill to the National Assembly on this. However, in order to avoid a fiscal crisis for the Federal Government, as well as the States, it is important to devise ways to ensure that its implementation does not lead to an increase in the level of borrowing.”
The president disclosed that in the proposal, “we have allocated N2.28 trillion for capital spending, inclusive of capital in statutory transfers.
“For comprehensiveness and transparency, the expenditure plans of the larger Government Owned Enterprises (GOEs) as well as Multi-lateral and Bi-lateral project-tied loans have been integrated into the 2019 -to- 2021 Medium Term Fiscal Framework.
“With the inclusion of N275.88 billion representing capital for the larger GOEs and N556.02 billion for Multi-lateral/Bi-lateral project-tied loans, the aggregate capital budget is N3.12 trillion. This represents 30 percent of the total FGN proposed expenditure for 2019.
“In order to get full value for monies expended by the government over time and to avoid duplication and waste, our emphasis will continue to be on completion of existing projects. Accordingly, provisions have been made to carry over projects that are not likely to be fully funded under the 2018 budget to the 2019 capital budget.
“The allocation to the Social Intervention Projects (SIP) has been retained at N500 billion, consisting of N350 billion recurrent and N150 billion capital. This reflects our continued determination to pursue inclusive gender-sensitive and pro-poor growth.
“In addition, to maintain the peace in the Niger Delta, the provision of N65 billion for the Presidential Amnesty Programme has been retained in the 2019 budget. Similarly, the sum of N45billion has been provided for the North East Intervention Fund, as well as the sum of N10 billion as take-off grant for the North East Development Commission.
“To further support Small and Medium Scale Enterprises, which are the focus of our industrialisation drive, we have set aside the sum of N15 billion for the recapitalisation of the Bank for Agriculture and the Bank of Industry. In addition, the sum of N10 billion is provided as a grant to the Bank of Industry for the purpose of subsidizing the interest rates charged on loans to Small and Medium-Scale Enterprises. This is intended to make it possible for them to access single digit interest rate loans from the Bank of Industry.”
Speaking on the vision for the future, Buhari said: “Our vision is for much better prospects for all Nigerians. With careful economic management and continued diversification of our production and revenue bases, we will build an inclusive and stable economy for generations to come.
“In addition to the development of Special Economic Zones which will underpin our efforts to move away from a mono-economy, we intend to exploit the comparative advantages of the six geo-political zones and our 36 states by establishing 6 Industrial Parks and 109 Special Production and Processing Centres across all 109 senatorial zones including shared facilities. These clusters will have power, water, and broadband facilities with embedded regulatory services. The clusters will generate vibrant economic activity, stimulate small businesses and create jobs across the length and breadth of Nigeria.
“A key objective going forward is to further encourage and enable ‘prosperous small businesses’. Our micro, small and medium enterprises will accordingly benefit from improved access to funding, supporting infrastructure and off-take arrangements by Government and larger enterprises. They will leverage the Government Enterprise and Empowerment Programme, and the Anchor Borrowers Programme.
“Nigeria cannot afford to be left behind in the digital age. To create jobs for our young people, we will build a digital economy around the technology and creative sectors. In partnership with the states and the private sector, we are working on a project to increase broadband penetration across all geopolitical zones of the country, such that over the next four years, all the 774 LGAs will be provided with fibre connectivity.
“Modern, up-to-date infrastructure is particularly important to boost economic activity. We will continue with our emphasis on power, roads and rail. In addition to completing the Ibadan-Kano rail line we will also embark upon and move rapidly to complete the Eastern Rail from Port Harcourt to Maiduguri passing through Aba, which will connect to Abakaliki, Awka, Enugu, Owerri, Umuahia, then through Makurdi, Jos, Bauchi and Gombe. The Coastal Rail from Calabar to Lagos will also be completed as we aim to build a true national rail network that links all state capitals. Our road projects will gather pace and priority projects under the Presidential Infrastructure Development Fund such as the Abuja-Kaduna-Kano expressway, the Second Niger Bridge and the Lagos-Ibadan expressway will be fast-tracked for early completion.
“We shall expand generation, transmission and distribution of power from the national grid while developing innovative off grid solutions for schools, hospitals and markets.
“Efforts to improve hard infrastructure will be complemented by expanding reforms in the ease of doing business initiative. We will continue to remove obstacles, reduce costs and ensure timely delivery of services.
“Our social investments and social protection arrangements will continue to be deepened by extending coverage to all states and increasing the number of school children being fed daily. This will come with associated direct and indirect jobs across the value chain including farmers, aggregators, processors, transporters, cooks and servers.
‘Every child counts’! This is the guiding principle of our national educational system and entails far-reaching actions to boost digital literacy, impart functional skills to our children, and re-train tens of thousands of teachers every year. Indeed, we must equip our children from a very young age with skills for the modern era by emphasising education in science, technology, engineering, arts and mathematics.
“Health is an important part of our aspirations for human capital development and we will continue to strive to make our people healthy and happy. In addition to building world class treatment centres, including for cancer, we will be establishing a health system that prioritises primary health care so that millions of our people can be insured for a minimum package of services with the poorest exempt from co-payments. In so doing, we will reduce the stress, strains and costs that the Nigerian people face in accessing decent health care.”
Buhari in conclusion said: “This 2019 Budget Proposal, which I lay before you today, has benefited from extensive consultations and stakeholder engagements reflecting our belief that all sectors have a critical role to play in our journey towards sustainable and inclusive development. It further demonstrates our commitments to deliver the dividends of democracy to all Nigerians in a more inclusive manner. It represents another important step in building the Nigeria of our dreams, a vision that we are determined to achieve with the support of all Nigerians.
“It is therefore with great pleasure and a deep sense ofresponsibility, that I lay the 2019 Appropriation Bill before this JointSession of the National Assembly, for consideration and passage. What hasbecome evident over the past three, or so, years is that more can be achievedin the overall interest of the Nigerian people when we work together. It is myhope that despite our current preoccupation with political activities, we canall commit to an early passage of this budget in the larger interest of ourpeople and the national economy.”
SOURCE; THE SUN