The federal government yesterday gave a breakdown of how the proposed N7.28 trillion appropriation for 2017, tagged “Budget of Recovery and Growth” would be funded, ruling out tax increase and retrenchment of workers as funding options.
The government explained that rather than increase the tax burden on the people, it planned to fund the proposed budget by borrowing from internal and external sources, in addition to oil and non-oil revenue.
The Minister of Budget and National Planning, Senator Udoma Udo Udoma, who disclosed this at the public presentation of the details of the 2017 budget in Abuja, said the government plans to borrow about N2.32 trillion to finance the budget and that N1.067 trillion, representing 46 per cent would be sourced externally, while N1.25 trillion would be from domestic sources.
The minister also noted that the N288.6 billion recovered loot would be used as part of the funds to execute the 2017 budget.
Udoma assured that there was no plan to retrench workers “but we will make sure personnel costs are managed and taxes will not be increased.”
He also disclosed that a cabinet committee had been set up by President Muhammadu Buhari to find creative ways of getting additional revenue from the oil sector, adding that the report of that committee would be ready in time to be presented to the National Assembly before they resume from their Christmas recess.
The minister stressed government’s determination to take definite steps to pull the country out of its current state.
“Nigeria is in recession. Inflation and unemployment have been rising. As a government, we are determined to bring succor to our people. The only way we can do this is by taking strong action to change, in a fundamental way, the current trajectory of the Nigerian economy.
“This is not the time for timid and cautious approach. This is a time for bold and focused action. To get out of this recession and back on the path of growth, government must find the resources to spend on infrastructure and to spend to reflate the economy.
“This spending will help to stimulate and attract private sector capital and private sector spending. This is what the 2017 budget proposal seek to do,” he said.
Udoma further noted that the federal government will invest in new projects and initiatives as captured in the 2017 budget.
“Some of the new initiatives with their proposed budget are the new social housing programme which is billed for N100 billion; N50 billion for special economic zone projects to be set up in each of the geo-political zones, to drive manufacturing/exports; N20 billion voted for the revival of export expansion grant in the form of tax credit, while for recapitalisation of Bank of Industry (BOI) and Bank of Agriculture (BOA), N15 billion has been provisioned to support these development finance institutions to support Micro, Small and Medium Scale Enterprises (MSMEs),” he explained.
Elaborating on the infrastructure spending, the budget minister said it is aimed at engendering good governance practices and providing enablers for economic recovery and growth.
He listed some of the key sectoral capital allocations in the 2017 budget to include; governance and security, 20 per cent; economic reforms, 12 per cent; social development, seven per cent; states and regional development, four per cent and environment, one per cent.
Consequent upon the recent kidnappings in schools, the minister said that N5 billion was allocated for the provision of security infrastructure in 104 colleges (perimeter fencing, solar street lights, solar-powered motorised boreholes and CCTV).
Also in a bid to stop medical tourism, about N7.65 billion for procurement of vaccines and devices, and N6.46 billion for global fund and GAVI counterpart funding were provisioned in the budget.
He added that N6.55 billion was allocated for the dualisation of East – West road (section 1 to 5, covering Warri-Ahaoda-Port Harcourt – Eket- Oron-Calabar) and N8billion counterpart fund contribution for East-West Road.
Answering questions on how much the government has recovered so far, the director-general of Budget Office, Ben Akabueze, said the total is N288.6 billion, which includes N97.6 billion ($220 million) expected from the Swiss government, part of what is called Abacha loot.
He said, “A total of N288.6 billion. This includes N97.6 billion, which is equivalent of $220 million expected from the Swiss government, part of what is called Abacha loot recovery. Then it also includes N72 billion that has already been received in recent cases of loot recovery.
“And a balance of N90 billion other expected recoveries that are at an advanced and reasonable stage that we feel comfortable and confident that they would come through in 2017, and so they have been reflected in the budget.”