2018: Buhari bans recruitment by MDAs, presents N8.612tn budget
Read Time:10 Minute, 27 Second
President Muhammadu Buhari on Tuesday banned fresh recruitment by all Federal Government Ministries, Departments and Agencies, except by presidential approval.
He said this was to manage a rising personnel expenditure that was expected to increase to 12 per cent in 2018.
He disclosed that overhead cost would also rise by N26bn in 2018 or 12 per cent increase.
Buhari spoke when he presented the estimates of the 2018 budget to a joint session of the Senate and the House of Representatives in Abuja.
The President laid a budget size of N8.612tn before the legislature for 2018, an increase of N1.7tn from the N7.44tn appropriated in 2017.
Buhari, who wore sky-blue Hausa native attire and a matching cap, addressed lawmakers for 1hour and13minutes amid applause and intermittent murmurs by senators and members of the House.
The President said he had released up to N450bn out of the N2.2tn budgeted for 2017 capital projects as of the end of October.
He promised to raise the implementation of 2017 budget to “about 50 per cent” by the end of December, blaming the delayed in the release of funds partly on the “late passage of the 2017 budget.”
He said to check a bloating personnel cost, he had directed all MDAs to halt fresh recruitment, else they would face sanctions.
He said, “I have directed agencies not to embark on any fresh recruitment unless they have obtained all the requisite approvals. Any breach of this directive will be severely sanctioned.”
From the proposed N8.612tn for 2018, the President said recurrent costs would be N3.494tn, while N2.652tn was earmarked for capital expenditure.
He added that debt servicing would cost N2.014tn; and statutory transfers, N456bn.
The amount earmarked as Sinking Fund “to retire maturing bond to local contractors” was N220bn.
On statutory transfers, Buhari said, “N456.46bn is provided in the 2018 budget for statutory transfers. The five per cent increase over last year’s provision is mainly due to increases in transfer to Niger Delta Development Commission and the Universal Basic Education Commission, which are related directly to the size of oil revenue.”
The budget came with a deficit of N2.005tn, a drop from the N2.36tn contained in the 2017 budget, or “1.77 per cent of Gross Domestic Product.”
On how to fund the deficit, the President stated, “We plan to finance the deficit partly by new borrowings estimated at N1.699tn.
“Fifty per cent of this borrowing will be sourced externally, while the balance will be sourced domestically. The balance of the deficit of N306bn is to be financed from proceeds of privatisation of some non-oil assets by the Bureau of Public Enterprises.”
Other key assumptions of the budget are a crude oil benchmark of US$45 per barrel ($44 in 2017); and oil production estimate of 2.3 million barrels per day, including condensates (2.2mbpd in 2017).
The exchange rate of N305/US$ was planned for 2018, the same rate for 2017 budget.
The President also spoke on how his administration would tackle the country’s debt challenge, saying, “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.
“Presently, domestic debt accounts for about 79 per cent of the total debt. Our medium-term strategy is to reduce the proportion of our domestic debt to 60 per cent by the end of 2019 and increase external debt to 40 per cent.
“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.”
Buhari gave a detailed analysis of the country’s overall revenue expectations in 2018 and the anticipated jump in the shares of the three tiers of government.
He said, “Based on the fiscal assumptions and parameters, total federally-collectible revenue is estimated at N11.983tn in 2018. Thus, the three tiers of government shall receive about 12 per cent more revenues in 2018 than the 2017 estimate. Of the amount, the sum of N6.387tn is expected to be realised from oil and gas sources.
“Total receipts from the non-oil sector are projected at N5.597tn.
“The Federal Government’s estimated total revenue is N6.607tn in 2018, which is about 30 per cent more than the 2017 target.
“As we pursue our goal of revenue diversification, non-oil revenues will become a larger share of total revenues. In 2018, we project oil revenues of N2.442tn and non-oil as well as other revenues of N4.165tn.
“Non-oil and other revenue sources of N4.165tn include share of Companies Income Tax of N794.7bn; share of Value Added Tax of N207.9bn; Customs & Excise receipts of N324.9bn; FGN independently-generated revenues of N847.9bn; Amnesty Income of N87.8bn; and various recoveries of N512.4bn, and N710bn as proceeds from the restructuring of government’s equity in Joint Ventures and other sundry incomes of N678.4bn.”
Buhari gave the indication that the government would recover more funds from treasury thieves, saying the whistle-blower policy would be exploited to recover looted money.
For sectoral allocations on recurrent expenditure, N510.87bn was budgeted for Ministry of Interior; N435.bn for Education; N422.43bn for Defence and N269.34bn for Health.
For the sectoral allocations on capital expenditure, Power/Works/Housing got N555.88bn; Transport got N263.10bn; Special Intervention Programmes, N150bn; Defence got N145.00bn; Agriculture and Rural Development, N118.98bn; Water Resources, N95.11bn; Industry, Trade and Investment, N82.92 bn; Interior: N63.26bn; Education N61.73bn; Universal Basic Education Commission, N109.06bn; Health, N71.11bn and Federal Capital Territory, N40.30bn.”
Others are Zonal Intervention Projects, N100bn; North-East Intervention Fund, N45.00bn; Niger Delta Ministry, N53.89bn; and Niger Delta Development Commission, N71.20bn.
Reps abort planned protest
Members of the House of Representatives had planned to protest against the non-implementation of the 2017 budget while Buhari delivered his address.
The members had held placards and filed into the chambers with a plan to raise them to register their protests, but they later dropped the idea.
Findings indicated that an executive session the Speaker, Mr. Yakubu Dogara, called shortly before Buhari’s arrival, helped to douse tension.
Saraki gives conditions for passing budget
President of the Senate, Bukola Saraki, in his opening speech at the ceremony, stated that the 2018 Appropriation Bill would enjoy speedy passage if there was cordial relationship between the executive and the National Assembly.
Saraki told Buhari to lobby members of the National Assembly to ensure successful implementation of the programmes and policies of his administration.
He said, “Mr. President, I will like to advise and caution that there is no better time in this administration than now for a rigorous drive for good working relationship between the executive and the legislature.
“The early passage of the 2018 budget will depend on this good working relationship. The passage of important executive bills that improve the ease of doing business is also dependent on this. So, Mr. President, the 469 members in this chamber are your true partners that will ensure the success of your administration in achieving its goals and objectives. So, lobby them – not the PDP way; close ranks and let them work for you.
“Let me assure Mr. President that, in considering the 2018 budget proposal, the National Assembly will work with your team, as we are convinced that more can be achieved together.”
Dogara seeks improved relationship
The Speaker of the House of Representatives, Dogara, told Buhari to improve on executive-legislature relationship for government polices to progress smoothly.
He noted that any attempt by the executive to work alone could only end in failure.
Dogara said the implementation of the 2017 budget had so far not been impressive.
He said, “Mr. President, as legislators, what agitates us is the prospects of totally abandoning the 2017 budget and the dire consequences of doing so.
“The questions that must be answered include whether we have effectively enforced 2017 fiscal targets and whether managers have complied with the budget as authorised by the legislature.
“We have to redouble our efforts in implementing the 2017 budget. No need to remind us that fiscal indiscipline is as grievous a problem as corruption which this government is busy eliminating.”
Senators differ on estimates
Members of the Senate however differed on the feasibility of the projections in the 2018 Appropriation Bill as well as the proposed January-December cycle for 2018.
Senator Mao Ohuabunwa (Abia-North), said the proposal was unrealistic. He stated that the 2017 Appropriation Act was still in operation.
“The 2017 Act is supposed to run for a full year; what are we going to do? This is the dilemma that we must resolve before we touch the 2018 budget (proposal).
“We also talk about the level of implementation (of the 2017 Appropriation Act) because now that they have presented the budget, the committees will go on oversight (visits) and part of the oversight to be done before the discussion of the budget is to look at the implementation of the 2017 budget.
“From the records available, the 2017 budget is still below 20 per cent (implementation) but the President had said the 2017 budget would be implemented up to 50 per cent. This budget was assented to in June and five months after, we have only 12 per cent implementation. I don’t know what magic we are going to perform to make it 50 per cent by December.”
Also, Senator Foster Ogola (Bayelsa-West) said Buhari did not address the issues affecting the oil-rich Niger Delta region. He pointed out that the Ministry of Niger Delta, which was created to tackle the socio-economic and environmental challenges in the South-South geopolitical zone, had been inadequately funded in successive budgets.
Ogola said, “This year, what do they have for the Niger Delta? I’m not convinced with the mention of Ogoni (clean-up); what is the percentage of Ogoniland in the Niger Delta. In the entire Bayelsa State, what is the Federal Government project there? What is for the Ijaws in Delta, Ondo and Akwa Ibom?
Senator Sani Yerima also stated that the National Assembly had yet to pass the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper, which should preceded the budget presentation.
“You know that the budget was supposed to be drawn from the MTEF, but we can carry the two along. We decided that we should receive the President so that we can start tackling the MTEF next week, then we will start with the budget and pass it before the 31st of December of this year,” he said.
In his submission, Senator Magnus Abe (South-East), described Buhari’s speech as a good presentation, saying every part of the country “got something out of the budget.”
He said, “Like every other budget, the challenge is the implementation of what was passed.
“I think the projections are sound. I also think that his explanation as to what we need to do in order not to lose time while we reorganise the budget year to January-December by rolling over some projects and plans from 2017, is also realistic if well managed.”
APC leaders accompany President
Buhari was accompanied by members of the Federal Executive Council and leaders of the ruling All Progressives Congress.
Ministers on the President’s entourage include Finance, Kemi Adeosun; Budget and National Planning, Senator Udo Udoma; Power, Works and Housing, Babatunde Fashola; Communications, Adebayo Shittu; Foreign Affairs, Geoffrey Onyema; Trade and Investment, Okechukwu Emenala; Solid Minerals Development, Kayode Fayemi; and Minister of State for Petroleum Resources, Ibe Kachikwu.
Also on the entourage were the Director General of the Budget Office of the Federation, Ben Akabueze; Senior Special Assistant to the President on Foreign Affairs and Diaspora, Abike Dabiri-Erewa.
National Chairman of the APC, Chief John Odigie-Oyegun led the leadership of the ruling party.
The Governor of Zamfara State and Chairman of the Nigeria Governors’ Forum, Abdul-Azeez Yari, was also in attendance, as well as Governor of the Central Bank of Nigeria, Godwin Emefiele.
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