2017 Budget as Lever for Economic Recovery

After a six-month wait, acting President Yemi Osinbajo, in the absence of President Muhammadu Buhari, finally got to append his signature to the 2017 Appropriation Bill on Monday.

This year’s budget, like others before it, took a long time coming. But what stood it out from others was that the 2017 budget was devoid of rancour between the executive and National Assembly over the alterations made to the original document by the latter.

Much of the negotiations and interactions to reinstate

what had been altered in the budget were handled behind the scenes and in a discreet manner that saved the public the agony of another fight over the spending estimates.

The budget with an aggregate expenditure of N7.44 trillion has an ambitious revenue projection of N5.08 trillion. With total capital expenditure of N2.178 trillion and non-debt recurrent expenditure of N2.987 trillion, the federal government is proposing to fund the projected fiscal deficit of N2.36 trillion by borrowing.

The federal government also earmarked N1.841 trillion for debt service, which unfortunately is 24.74 per cent of the total budget and 36.3 per cent of revenue projections for the year.

By implication, for every N1 made by the federal government in 2017, about N.036 will be spent on servicing its debt, leaving it N3.2 billion for recurrent and capital spending. Expectedly, this will be augmented by borrowings from mainly foreign and, to a lesser extent, local sources.

It is noteworthy, however, that the 2017 budget, which was premised on a benchmark crude oil price of US$44.5 per barrel and oil production estimate of 2.2 million barrels per day, appears to be standing on attainable economic variables considering the near-stability in the international oil market and the relative peace in the Niger Delta region, following the peace overtures made by the federal government late