N2.7trn deficit .Exchange rate at N290/$
Retains 2.2mbd of oil
As Total Debt Stock hits N16.3trn
PRESIDENT Muhammadu Buhari has proposed N6,866,335,052,740 for the 2017 fiscal year, pegging the exchange rate at N290 to $1. In its bid to sustain its developmental projects, the federal government has unveiled plans to set up a $25billion Infrastructural Development Fund as a means of attracting non-budgetary resources. This is even as the country’s debt stock hits N16.3trillion ($61.45billion) as at June 30, 2016. In adherence to the three percent threshold set out in the Fiscal Responsibility Act 2007, the 2017 fiscal deficit was projected at N2.7trillion in nominal terms. This was contained in the 2017 to 2019 Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP, sent to the National Assembly for approval. The government also projected $42.5 per barrel and 2.2million barrel per day for crude oil production, despite the volatility in global oil prices, as well as $45bpb and $50bpb respectively for 2018 and 2019 with oil production benchmark of 2.3million and 2.4million
barrels per day for the same period. The country’s “oil and gas sector is expected to rebound with an average growth rate of 9.69 percent during the period. The year-on-year inflation rate is projected at 12.92percent for 2017 and 12.57 percent for 2019. “The nominal GDP is expected to increase from N108,735billion for 2017 to N129,773billion for 2019. Similarly, private consumption expenditure is projected to grow from N80,048billion for 2017 to N91,955billion for 2019. These are important revenue projections, in addition to enhancing the capacity of the government to increase spending on core social and economic programmes during the MTEF period.” The aggregate revenue to fund the 2017 budget is projected to increase over the 2016 estimate of N3.855trillion by about eight percent or about N313billion. 33 percent of the amount is expected from oil sources while the balance is derivable from non-oil sources in consonance with the government’s renewed focus on diversification of its revenue base. Meanwhile, the recurrent (non- debt expenditure) and capital payments are projected to increase in nominal terms by N217.42billion and N177.6billion respectively in 2017 over the 2016 estimate. On the Risks to the Medium- Term Outlook, the document stated that “the Nigerian economy has remained susceptible to a number of recurring risks and persistent shocks. These risks have posed setbacks to government finances, constrained economic growth and consequently, slowed the pace of achieving development objectives. These shortcomings have been carefully considered in designing the Medium Term Strategy.” In a letter addressed to Senate President Bukola Saraki and speaker House of Representatives, Yakubu Dogara, and read on both floors of the legislative chambers on Tuesday, the president called for expeditious passage of the document. He said his request was in line with Fiscal Responsibility Act of 2007, adding that “preparation towards the submission of the 2017 budget to the National Assembly is progressing well.” The Fiscal Responsibility Act requires the executive to prepare the MTEF/FSP and send it on to the National Assembly for their consideration. It is on this basis that the budget will be fashioned. Data from the National Bureau of Statistics, NBS, showed Nigeria’s real Gross Domestic Product, GDP, growth rate declined to -0.36 percent in the first quarter of 2016 in contrast to 2.11 percent in Q4 of 2015, placing the country on economic recession. In the document, the government proposed N1.3trillion as oil revenue to fund the 2017 budget, N14billion for NLNG dividend, N1billion from share of minerals and mining while non-oil revenue is projected at N1.5trillion. Others are independent revenue N1.2trillion; federal government’s share of actual balance in special accounts as N6.5billion; government’s balances in Special Levies Accounts – N9billion, and government’s unspent balance of previous fiscal year – N50billion. The document also revealed that the amnesty programme was increased from N20billion in 2016 to N65billion in 2017; debt servicing increased from N1.326trillion in 2016 to N1.639trillion in 2017 while the Special Intervention Programme (recurrent) was raised from N300billion to N350billion. The federal government noted that the forex policy was revised in its bid to accommodate the pressures on the reserves which stand at about $26.36billion and allow effectiveness of fiscal adjustment.