President Muhammadu Buhari yesterday presented the 2018 Budget proposal of N8.612 trillion to the joint session of the National Assembly. This was against the N7.44 trillion 2017 budget passed by the National Assembly last year December. The 2018 Appropriation Bill is N1.172 billion higher.

In the budget, which financial experts described as a make-or-mar economic blueprint for his administration, Buhari, who announced allocations to different projects in the country’s geopolitical zones, was silent on the figure for the South East region. There have been relentless agitations in the South East over what the people of the zone described as persistent marginalisation by the present administration.

The agitations reached a climax with the demand by secessionists led by Nnamdi Kanu, leader of the proscribed Indigenous Peoples of Biafra (IPOB), seeking a separate Biafra Republic. The campaign for Biafra State was doused by the military, who stormed Afaraukwu, Umuahia home of Kanu during the just-concluded Operation Python Dance II in the South East. Since then, the whereabouts of Kanu have remained unknown.

In a breakdown of the regional spending in fiscal 2018, Buhari said that priority would be given to peace, security and development in the country. He said that “to maintain peace and security in the Niger Delta for economic and social activities to thrive, the provision of N65 billion for the Presidential Amnesty Programme has been retained in the 2018 Budget. “In addition, the capital provision for the Ministry of Niger Delta Affairs has been increased to N53.89 billion from the N34.20 billion provided in 2017. This is to further support the development in the region. We will complete all critical projects, including the East-West Road, which has a provision of about N17.32 billion in 2018.

The Zonal Intervention Projects got N100 billion, North East Intervention Fund N45 billion, and Niger Delta Development Commission, N71.20 billion. “Across the nation, and particularly in the North East region, our commitment to the security of life and property remains absolute. We will ensure that our gallant men and women in arms are properly equipped and well-motivated,” he said.

This is the third budget since he assumed office in 2015. The first two budgets (2016 and 2017) have been rated by experts as poorly implemented. This year’s budget offers the president the opportunity to correct the failures of the past.

Yesterday, some members of the National Assembly rated the 2017 budget as the worst executed in Nigeria. They said that less than 10 percent of the budget was implemented. “The 2018 Appropriation Bill when passed by the National Assembly offers Buhari the opportunity to show that he is serious about governance”, said an economic expert. He said that 2019 will be an election year and the president would have nothing to prove to Nigerians if he fails to do well in 2018.

According to the President, a substantial part of the recurrent cost proposal for 2018 is for the payment of salaries and overheads in key ministries providing critical public services.

While the Ministry of Interior got N510.87 billion, Ministry of Education received N435.01 billion. Defence Ministry had N422.43 billion and the Ministry of Health got N269.34 billion.

On the capital expenditure, the President explained that Ministry of Power, Works and Housing was allocated N555.88 billion, Ministry of Transportation N263.10 billion, Ministry of Special Intervention Programmes N150 billio).

Defence got N145 billion; Agriculture and Rural Development, N118.98 billion; Water Resources, 95.11 billion; Industry, Trade and Investment, N82.92 billion; Interior, N63.26 billion; Education, N61.73 billion; Universal Basic Education Commission, N109.06 billion; Health, N71.11 billion; Federal Capital Territory, N40.30 billion. The President further explained that the 2018 Budget has a nominal increase of 16 percent above the 2017 Appropriation Act, adding that in keeping with “our policy, 30.8 percent (or N2.652 trillion) of aggregate expenditure (inclusive of capital in Statutory Transfers) has been allocated to the capital budget.

“We expect our fiscal operations to result in a deficit of N2.005 trillion or 1.77 percent of Gross Domestic Product (GDP). This reduction is in line with our plans under the Economic Recovery Growth Programme (ERGP) to progressively reduce deficit and borrowings.

“We plan to finance the deficit partly by new borrowings estimated at N1.699 trillion. Fifty percent of this borrowing will be sourced externally, whilst the balance will be sourced domestically. The balance deficit of N306 billion is to be financed from proceeds of privatisation of some non-oil assets by the Bureau of Public Enterprises (BPE).”

On the aggregate expenditure of the budget, President Buhari put recurrent costs at N3.494trillion, Debt Service at N2.014 trillion, Statutory Transfers, N456 billion, Sinking Fund, N220 billion (to retire maturing bond to local contractors), capital expenditure at N2.428 trillion (excluding the capital component of Statutory Transfers).

According to the President, “N456.46 billion was provided in the 2018 Budget for Statutory Transfers. The five percent increase over last year’s provision is mainly due to increases in transfer to NDDC and the Universal Basic Education Commission (UBEC), which are related directly to the size of oil revenue.”

On the debt restructuring, the President said: “We are closely monitoring our debt service to revenue ratio. We shall address this ratio through our non-oil revenue-generation drive and restructuring of the existing debt portfolio. At present, domestic debt accounts for about 79 percent of the total debt.

“Our medium-term strategy is to reduce the proportion of our domestic debt to 60 percent by the end of 2019 and increase external debt to 40 percent. It is noteworthy that re-balancing our debt portfolio will enhance private sector access to domestic credit.

“In addition, annual debt service costs will reduce as external debts are serviced at lower rates and repaid over a longer period than domestic debt,” the President said.

Buhari further explained that the key parameters and assumptions for the 2018 Budget are set out in the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

According to him, the benchmark of oil price is US$45 per barrel, with oil production estimate of 2.3 million barrels per day, including condensates; exchange rate of N305/US$, real GDP growth of 3.5 percent; and inflation rate of 12.4 percent.