Buhari proposes N8.83 trillion budget for 2019 fiscal year

By Editor on 20/12/2018

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Buhari
Buhari

President Muhammadu Buhari yesterday presented N8.83 trillion Appropriation Bill for 2019 to a joint session of the National Assembly.

The proposal, which is less than this year’s Appropriation Act of N9.12 trillion, includes grants and donor funds of N209.92 billion, the President said.

The President said it was higher than the N8.6 trillion 2018 estimates.

The budget deficit, he said, was projected to decrease to N1.86 trillion (or 1.3 per cent of the Gross Domestic Product) in 2019 from N1.95 trillion projected this year.

“This reduction”, he said, “is in line with the country’s plans to progressively reduce deficit and borrowings.”

President Buhari explained that the proposed N8.83 trillion of 2019 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 will 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.

The President put the provision for Statutory Transfers in 2019 at N492.36 billion (a seven per cent reduction from 2018).

He noted, however, that the 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  N2.14 trillion was provided for debt service.

Of the amount, he said 80 per cent is voted to service domestic debt which accounts for about 70 per cent of the total debt.

He said: “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.”

On recurrent expenditure, President Buhari said that a substantial part of the recurrent cost proposal for next year is for the payment of salaries and overheads in ministries providing critical public services such as:

Interior ministry (N569.07 billion);

Defence ministry (N435.62 billion);

Education ministry (N462.24 billion); and

Health ministry (N315.62 billion).

The allocations to the ministries, he said, “represent significant increases over votes in previous budgets, underscoring our commitment to increase investment in national security and human capital development.”

On personnel costs, President Buhari noted that “personnel costs, estimated at N2.29 trillion, currently amount to nearly 40 per cent of projected revenues.”

He added that “substantial savings have been made from wider use of the Integrated Personnel Payroll Information System (IPPIS) platform.”

The President said that he has “directed that all MDAs must implement the IPPIS by March, 2019,” adding that President said that they have made provisions for staff promotion arrears and recruitments by the armed forces, police and para-military agencies.

He continued: “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.”

The President said that one per cent of the Consolidated Revenue Fund, amounting to N51.22 billion, has been earmarked for the Basic Health Care Provision Fund, and other related commitments.

Throwing more light on the implementation of the new national minimum wage Buhari 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 minimize its inflationary impact, as well as ensure that its introduction does not lead to job losses.”

On capital expenditure Buhari said: “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 per cent of the 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.”

On allocation to social investment projects Buhari said:

“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.”

To maintain the peace in the Niger Delta, the President said that the provision of N65 billion for the Presidential Amnesty Programme has been retained in the 2019 budget.

“Similarly, the sum of N45 billion 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.

The president continued, “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.”

On the vision of his government for the future of the country he 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 six 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”, Buhari said, “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 the government and larger enterprises.

“They will leverage the Government Enterprise and Empowerment Programme and the Anchor Borrowers Programme.”

He added: “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.”

Posted 20/12/2018 06:50:40 AM

 

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