President Buhari
Dr Saraki,senate president
By Sanya Ademiluyi
President Muhammadu Buhari will present 2017 budget on Wednesday, December, 14,2016 following a request to the National Assembly for that date. The budget is supposed to be a departure from this year’s budget which was mired in controversy for several months early this year.
The President is expected to present a budget of slightly over N7 trillion ,for the approval of the National Assembly. A report by Reuters says Buhari would present a budget of N7.3 billion budget based on a oil price benchmark of US&42.5 per barrel and a daily crude oil production of 2.2 million barrels per day.Several months ago, ahead of the budget, the National Planning Ministry had drawn up and presented a Medium term Expenditure Framework, MTEF to the National Assembly. That may have served to test the waters ahead of the actual budget.
But the Senate seemed unimpressed with the proposals which Senate President, Dr Bukola Saraki was reported to have described as “poorly put together”.
The Buhari administration is expected to focus on infrastructure development and providing financial incentives for agriculture ,which the President is betting on to help diversify the economy away from petroleum exports.The administration is anticipated to pile a lot of cash into improving road infrastructure. The re-development of the North East region of the country devastated by the terrorist group, Boko Haram is also expected to get serious attention.
The issue of constituency projects which has been a contentious issue between the Buhari administration and the National Assembly would be a challenge. In spite of the fact that the public furore generated by this year’s budget was due partly to differences on constituency projects sponsored by members of the national assembly ,there is likely to be a repeat as the legislators are not backing down over the inclusion of projects they consider critical to their areas in next year’s budget. Some lawmakers even suggest in plenary, that constituency projects should take at least 17 per cent of the federal budget—an idea that the Presidency is yet to respond to.
A key challenge is the huge funding gap which the budget would incorporate The Buhari administration has been shopping for a US$30 billion foreign loan package since mid-year to meet an equally huge shortfall in funding of its key projects. And although ,it says all the money would not be required at once ,it has been an uphill task for the administration, so far, to get a sizeable part of that loan package.The foreign loan decision has been unpopular with the majority of Nigerians, even if they recognize that something has to be done –urgently, by the government to help the country wade through its economic problems ,particularly a recession which threatens to take a turn for the worse, into a depression.
A gargantuan and growing domestic debt is another source of concern. Government current account borrowing from the Central Bank of Nigeria, CBN alone since last year is said to have topped N2 trillion.Whereas, borrowing through treasury bills and bonds could add another N2.5 trillion—a worrisome development, indeed. Last week, former CBN governor and Emir of Kano, Lamido Sanusi took a swipe at the apex bank for what he sees as uncontrolled advances to the government by the CBN.
Power generation and supply should get some serious atte,ntion and funding in the 2017,observers believe. National power supply remains woeful at less than 5,000 megawatts. Many times actual output could be as low as half of that,2,500 MW in an economy considered the largest in Africa before it went into a tailspin recession.
There is a glimmer of hope as the administration rammed through the National assembly a repackaged Petroleum Industry Bill, PIB which has been stalled for several years due to political reasons, in the hope that it can offer new incentives to foreign investors especially its longstanding partners in the country’s critical Oil and gas industry.It is noteworthy that, there was also an uptick in global oil prices few days ago,as the North Sea Brent rose above $50 per barrel, the first time in several months. The Brent is the reference crude for the country’s crude streams such as Bonny light and Forcados Blend.
Economists and analysts would also look forward to see what percentage of the budget Buhari would devote to youth empowerment programmes. Such as the N500 billion social security stipend to be paid to unemployed youths across the country by the Federal Government,which was supposedly included in this year’s budget.Health care and Education are also anticipated to get substantial funding in the budget.
Many Nigerians and foreign investors eagerly await the President’s delivery of his budget 2017 to the National assembly and Nigerians.Will something change? Nigerians hope so.
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