Nigeria: Pres. Buhari presents $24bn budget for 2017

By Rafiu Ajakaye

LAGOS, Nigeria

Nigeria’s President Muhammadu Buhari has presented a budget of $24bn to the country's parliament for 2017, an increase of 20.4% compared to last year's, amid optimism that its implementation would see Abuja through the current economic recession.

Buhari nicknamed the budget one of “recovery and growth”.

He said the budget is based on an oil benchmark of $42.5 per barrel, an estimate of 2.2 million barrels production per day and exchange rate of N305 to the dollar. Buhari said he would push through ongoing engagements with the militants in the delta to avoid disruption to production, a major setback for the outgoing year when bombings of pipelines cut production by at least half until July.

“We propose that the implementation of the budget will be based on our economic recovery and growth strategy. The plan, which builds on our 2016 budget, provides a clear roadmap of policy actions and steps designed to bring the economy out of recession and to a path of steady growth and prosperity,” according to the president.

At least 30.7% of the budget targets infrastructural development, with works due to commence on major rail, power and road projects across the country while efforts are ongoing to boost manufacturing and mining, he said.

The president however called on his countrymen to patronise locally-made goods and eat stable foods grown locally to cut unabated demands for foreign exchange.

“In the past 18 months when we experienced low oil prices, we saw our foreign exchange earnings cut by about 60%, our reserves eroded and our consumption declined as we could not import to meet our needs,” according to Buhari.

In an address to the joint session of the parliament, the president said the budget is predicated on an aggregate revenue of $16.2bn of which an estimated $6.5bn will come from crude oil sale while $4.5bn will come from non-oil revenues such as taxes and levies. Independent revenues are to contribute $2.6bn while receipts from various recoveries are estimated at $.1.9bn, along with another $691mn from other revenue sources like mining.

“This fiscal plan will result in a deficit of N2.36 trillion ($7.7bn) for 2017 which is about 2.18% of GDP,” according to the speech.

“The deficit will be financed mainly by borrowing which is projected to be about N2.32 trillion ($7.6bn). Our intention is to source N1.067 trillion ($3.5bn) or about 46% of this borrowing from external sources while, N1.254 trillion ($4.1bn) will be borrowed from the domestic market,” he added.