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…Fixes:
Oil benchmark price for $42.5 per barrel
Daily crude oil production estimate at 2.2 million barrels per day
Exchange rate pegged at N305 to the dollar
Government to spend about N2.243 trillion on capital projects and N2.9 trillion as recurrent expenditure
President Muhammadu Buhari has presented the 2017 budget to the joint house of the National Assembly.
Buhari presented a proposal of N7.298 trillion for the 2017 budget, which is a 20.4% increase over the 2016 estimate.
The budget is themed: ‘Budget of Recovery and Growth’
While presenting the budget, Buhari assured that there will be no padding in the 2017 budget.
“Nigeria is at a stage where the patience and resilience of its citizens are being tested due to the economic recession.”
He admitted that the problems of sustaining policies is in the area of execution.
He said the 2016 budget was hampered by low oil prices in the first quarter of the year.
“I stand my ground that under my watch all Nigerians will slowly but surely grow. We will change our habits. We will grow businesses in Aba, Calabar, Lagos and others.
“We are already working to make Nigeria self-sufficient in three years. To achieve this, a lot will need to be done. We will support local Nigerian businesses in order to promote import substitution.
“Although we can’t control oil prices, we’re determined to have our high oil production level back.
“2016 budget was based on zero budgeting method, the same will be employed in the 2017 budget. Despite the challenges with the 2016 budget, we met both our capital expenditures and debt commitments.
“In 2017, we will focus on the development of infrastructure, especially rail, road and power. In 2017, we want to source 46% of our debts from outside Nigeria and get the rest from local sources.
“We are increasing funding to the judiciary in order to allow them function even better.”
However, details of the proposed budget showed that it was based on crude oil benchmark price of $42.5 per barrel, against the benchmark price of $38 per barrel used in the 2016 budget.
Daily crude oil production estimate was put at about 2.2 million barrels per day, same as the figure in last year’s budget, while the exchange rate was put at N305 to the dollar as against N197 to the dollar in 2016.
Further details of the proposed budget showed that government proposed to spend about N2.243 trillion on capital projects and N2.9 trillion as recurrent expenditure.
The 2017 proposed capital and recurrent expenditures were higher than the N1.8 trillion and N2.65 trillion respectively provided in the 2016 Appropriation, representing about 15.44 and 9.43 per cent respectively.
About N1.66 trillion has been allocated for servicing of domestic debts, for which N1.3 trillion earmarked in the 2016 budget, with foreign debt expected to take about N175.9 billion as against N54.5 billion last year.
Detailed analysis later…