FG Targets N7.9 Tn 2018 Budget As Senate Approves $1.8bn External Borrowing

Proposes $45/b, 2.3mbpd in MTEF Six states get nod for $750bn foreign loans

The federal government projects that it would spend about N7.9 trillion next year, about N500 billion more than its N7.44 trillion appropriation for this year.

The government’s plan came to light yesterday through the Minister of Budget and National Planning, Senator Udoma Udo Udoma, during an interactive session with top government officials, civil societies organisations and Organised Private Sector (OPS) on the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The minister who also said the 2018 estimates would be presented to the National Assembly by October, stated that the government was proposing in the MTEF, a $45 per barrel of oil and a 2.3 million barrel per day (mbpd) oil production quota for the 2018 budget.

He added that the budget would also be predicated on an exchange rate of N305/$; 12.42 inflation rate; a 4.8 per cent GDP growth rate; nominal GDP of N133.97 trillion and N81.60 trillion nominal consumption.

He said the early submission of the budget to the legislature would provide the lawmakers ample time to consider the fiscal document and pass it on time.

"The MTEF outlines the Federal Government fiscal policies and our macroeconomic projections for the next three years from 2018 to 2020 and it provides the broad framework for the 2018 budget,” he said, adding: "We are committed to delivering the 2018 budget to the National Assembly by the beginning of October.”

The minister said the fiscal deficit was expected to rise to N2.77 trillion in 2018 from N2.35 trillion, adding that there was no need for Nigerians to panic about the country's debt burden.

The nation's debt profile, he noted, was sustainable as it was still within the threshold approved by the Fiscal Responsibility Act (FRA), 2007.

He also explained that there was no country in the world that did not borrow, pointing out that the federal government was capable of meeting its obligations to its creditors.

"We are maintaining our deficit and debts within sustainable limits. Debt financing will be restructured gradually in favour of foreign financing as part of a strategy to lower debt service burden and free up more fiscal space for the private sector," he added.

Udoma also disclosed that the government was targeting a total oil production volume of 2.3 million barrels per day with an oil price benchmark of $45 per barrel.

Government's plan in 2018, he added, was to reduce inflation rate to 12.42 per cent with a Gross Domestic Product growth rate of 4.8 per cent and nominal GDP of N133.97tn.

In terms of revenue projections, he said the government was targeting N5.16tn for 2018 as against N5.08tn in 2017.

The amount would be generated from oil revenue N2.1tn, non-oil revenue N1.36tn, dividend from Nigeria Liquefied Natural Gas N29.58bn, and minerals and mining N1.06bn.

Others are independent revenue from agencies of government N847.9bn, domestic recoveries and fines N364bn, other Federal Government recoveries N138.43bn and grants and donor funding N281.6 billion.

On the expenditure, the minister said the government was planning to spend N2.63tn on nondebt recurrent expenditure, while N350bn has been set aside for special intervention programs.

Udoma said N2.4tn would be spent on capital projects implementation as against N2.17tn approved for 2017.

He described the targets of the government in 2018 as "ambitious" but noted that they were achievable.

He said: "In line with the goals of the Economic Recovery and Growth Plan (ERGP) 2017-2020, the medium term fiscal policies of government will be directed at achieving macroeconomic stability, accelerating growth, intensifying economic diversification and promoting inclusiveness.

"The need to look onwards to boost non-oil revenues cannot be overemphasized, as we diversify.

"We are on track to achieve full recovery and return firmly to the path of growth. Fiscal prudence must be observed at all levels of governance," he stated.

On specific strategies to achieve the projected revenues, he said that the objective of government going forward was to enhance oil revenues and accelerate non-oil revenues.

According to him, this would be achieved through transition from the traditional Joint Venture Cash Call budget to the self-funding mechanism.