EDITORIAL- An appraisal of Nigeria’s 2017 budget
The Federal Government has presented a breakdown of the nation’s budget proposal for the 2017 fiscal year, warts and all.
The analysis follows the presentation of a ‘budget of recovery and growth’ by President Muhammadu Buhari to a joint session of the National Assembly on Wednesday, December 14.
AljazirahNigeria gathered that the 2017 budget is based on a crude oil benchmark price of $42.50 per barrel, with an output of 2.2 million barrels per day.
In the 2016 Budget, we recall crude oil benchmark price was put at $38 per barrel, while production level was 2.2 million barrels per day.
The highlights of the budget include improved business environment, governance as well as security of lives and property.
The government’s expenditure is to be funded with the sum of N4.94 trillion while oil is to contribute N1.98 trillion of the amount.
The deficit of N3.63 trillion, which is 2.18% of GDP, is to be financed through borrowing of the sum of N2.23 trillion.
Of this sum, N1.7 trillion would be from external borrowing while N1.254 trillion would be sourced domestically.
Key capital spending provisions would be on power, works and housing, which have been allocated the highest amount of N529 billion, followed by transport – N262 billion, social intervention – N150 billion, defence – N140 billion while the judiciary got an increased allocation of N100 billion.
The area of education got N50 billion while universal basic education got a direct allocation of N92 billion.
The sum of N51 billion was also allocated to health.
At AljazirahNigeria, we feel the budget has huge potentials to turn around the ailing economy even though it has inherent loopholes.
Of course, the N7.298 trillion 2017 budget, against the N6.06 trillion for 2016 budget is higher in size and potentials.
The 2017 figure has an increase of 20.4% over the 2016 estimates.
The 2017 capital and recurrent expenditures rose by 15.44 per cent and 9.43 per cent over the 2016 Appropriation figures of N1.8 trillion and N2.65 trillion respectively.
President Buhari’s budget of growth and recovery is quiet an interesting one and has received flaks from different quarters due to its lack of priorities in some cases.
For example, ‘sewage charges’ of Aso Rock was put at N52,827,800.
In comparison, sewage charge went up by 1050% compared with the 2015 budget, and 850% when compared with the 2016 budget.
That has made many to wonder jocularly what kind of defecation goes on at the villa.
In addition, President Buhari will spend a huge part of 2017 national revenue to service debts, pay salaries and run every day business of governance.
This means capital allocation like it has been the case for many Nigerian governments is still not much of a priority.
Analysis of the budget shows that N1.837 trillion (about 25.2%) of the total budget estimates is for debt servicing and N1.8 trillion on personnel costs or costs of governance.
For AljazirahNigeria, these aspects of 2017 budget are troubling and threatening to the economy.
On the flipside, the 2017 budget showed there was no allocation made for new minimum wage or salary increment for government workers in the proposed budget for 2017, an issue many workers are not happy with in the light of declining economic power due to recession.
Be that as it may, AljazirahNigeria still believes the budget represents a glimmer of hope if it is fully implemented and can take Nigeria out of recession with political will.
Implementation and execution of budget has always been a major challenge every year as low implementation of budgets in the past had led to high rate of project abandonment cum unemployment across the country.
Over the years, Nigerians have witnessed situations whereby the country’s annual budgets were padded, messed up after presentation, and not properly implemented.
The 2016 budget was not fully implemented, and did not reflect on the economy and lives of Nigerians
We call on President Buhari to put viable policies and structured programmes in place to ensure that the contents of the budget are not misused or siphoned by politicians and government officials.
We at AljazirahNigeria challenge the Buhari-led administration to hit the ground running in its quest to provide food, health, security and dividends of democracy to its already disillusioned citizens.
We also urge Nigerians to give President Muhammadu Buhari and his economic team a fighting chance to rectify the ills of the economy in 2017.