Good tidings from 2019 budget

Last week’s signing into law of the 2019 appropriation bill of N8.92 trillion by President Muhammadu Buhari in spite of certain grey areas in the document is an ample demonstration of the federal government’s commitment towards the pragmatic implementation of the Nigerian Economic Recovery and Growth Plan (NERGP) 2017-2020. It also underscores the Buhari administration’s desire to exit Nigeria from the world’s poorest index.

Speaking at the event which took place at the president’s mini-conference room, Presidential Villa, Abuja, last week, President Buhari said the addition of about N90 billion to the N8.83 trillion he submitted to the legislature would make it difficult for the government to realise its set objectives.

He, however, stated that the executive arm of government would dialogue with the forthcoming ninth National Assembly so as to make life much better for Nigerians.  “Of course, some of these changes will adversely impact our programmes making it difficult for us to achieve the objectives of the Economic Recovery and Growth Plan.

“Although I will be signing this bill, it is my intention to engage the National Assembly to ensure we deliver on our promises. I will, therefore, be engaging with the leadership of the 9th National Assembly as soon as they emerge to address some of our concerns with the budget.”

President Buhari said the legislature made cuts amounting to N347 billion in the allocations to 4,700 projects submitted to them for consideration and introduced 6,403 projects of their own amounting to N578 billion.

The president said he only signed the bill because he did not want to further slow down the pace of recovery of Nigeria’s economy. He said he would send “a supplementary and/or amendment budget” to the National Assembly to rectify the critical issues he raised.

According to the president, his administration will look at how to improve the budget process in order to speed up its consideration as well as return the country to the January to December fiscal year timetable.

He appreciated the ministers of budget and national planning, finance, the budget office of the federation and all other stakeholders that played key roles in producing the document. President Buhari also lauded the leadership and members of the National Assembly for the efforts they put in passing the 2019 appropriation bill.

Earlier in his remarks, the Minister of Budget and National Planning, Udoma Udo Udoma, thanked the leadership of the National Assembly for their cooperation and support. He also thanked the Vice-President, Yemi Osinbajo, ministers and all members of the Economic Management Team for the various roles they played in producing the budget. “Because it is a collective endeavour, without their support, it would have been impossible to produce a budget.”

It is noteworthy that although much lower, the 2019 budget came earlier (May 27) than the 2018 appropriation bill of N9.120 trillion, which was signed into law by President Buhari on June 6.

Funding of the 2019 budget is hinged principally on a projected crude oil revenue of N3.7 trillion based on the production of 2.3 million barrels per day and an average crude oil price of $60 per barrel, with the average exchange rate of N305 to the dollar.

Other sources of revenue include N39.9 billion from government share of Nigeria LNG dividend; N1.3 billion from minerals and mining; N1.4 trillion from non-oil revenue sources. The non-oil revenue includes company income Tax (N813.4 billion), value-added tax (N229.3 billion), Nigeria Customs collections (N310.9 billion), and Federation Account levies (N55.6 billion).

Also, about N955.4 billion is expected from nine top government-owned enterprises; N631.1 billion from independent revenue sources; N8.3 billion from Federal Government’s share of actual balances in special accounts; and N12.9 billion from Federal Government’s balances in special levies accounts.

About N84.2 billion will be expected during the year as federal government’s share of signature bonuses, N203.4 billion from domestic recoveries, assets, and fines, N710 billion as proceeds of oil assets ownership restructuring and N209.9 billion from grants and donor funding.

While we commend President Buhari over his stance not to further delay the budget in the face of the repugnant “padding” by the legislature as hitherto has been the case, we urge Mr President to ensure a speedy resolution of all the grey areas in the budget with the incoming National Assembly. This is necessary in order to prevent the budget from suffering from the poor implementation, which has been bane of the nation’s budgets.

We also urge the president to liaise with incoming legislature with a view to returning the budget cycle to January –December in order to align Nigeria with the global economy as well as restore investor’s confidence in our national economy. This will boost the nation’s efforts at industrialisation and economic diversification from overdependence on crude oil.

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