President Muhammadu Buhari on Wednesday gave an overview of the implementation of the N9.12 trillion 2018 budget, saying 67 per cent performance had so far been recorded by Ministries, Departments of Agencies (MDAs) of government.
The President revealed this when he presented the 2019 budget estimates at a joint session of the National Assembly in Abuja.
The joint session, in the view of observers, had its high and low points, with one stakeholder noting that “The Budget Presentation was a theater of the absurd; one side of the opera occupied by the oleaginous & obsequious choristers craving for the attention of Mr Prez, cheering even a sip of water; And the other occupied by unruly bands of impudent hecklers & discourteous objectors.”
According to President Buhari, out of the total appropriation of N9.12trillion, N4.59 trillion had been spent by Sept. 30, 2018, against the prorated expenditure target of N6.84 trillion.
He said: “This represents 67 per cent performance. Debt service and the implementation of non-debt recurrent expenditure, notably payment of workers’ salaries and pensions are on track.
“Despite the delay in the passage of the 2018 Budget on 20th June 2018, the sum of N820.57 billion had been released for capital projects as at 14th December, 2018. We have carried over capital projects that were not likely to be fully funded by year-end 2018 to the 2019 budget.’’
The President said the 2018 budget was based on a benchmark oil price of 51 dollars, oil production of 2.3 million barrels per day and an exchange rate of N305 to the dollar.
He added that based on these assumptions, the federal government’s aggregate revenue of N7.17 trillion was projected to contribute to the 2019 budget of N9.12 trillion while the projected deficit of N1.95 trillion (or 1.73 percent of GDP) was to be financed mainly by borrowing.
“In 2018, average oil production up to end of the third quarter was 1.95 mbpd, as against the estimated 2.3 mbpd for the entire year. However, average market price of Bonny Light crude oil was higher (an average of $74 per barrel as at October) than the benchmark price of $51.
“As at the end of the third quarter, federal government’s actual aggregate revenue was N2.84 trillion, which is 40 percent higher than 2017 revenue.
“The overall revenue performance is only 53 percent of the target in the 2018 budget largely because some one-off items are yet to be actualized. We have now rolled this revenue item over to 2019,” he said.
While urging the lawmakers to expedite action for the passage of the 2019 budget, the President stressed the need for the legislature to partner with the executive arm of government for the benefit of Nigerians.
Meanwhile, President Buhari on Wednesday said N305 billion had been earmarked for petrol subsidy in the 2019 budget proposal.
Buhari stated this in his budget presentation speech to a joint session of the National Assembly in Abuja.
“We have allowed N305 billion equivalent to one billion U.S. dollars for under-recovery by the NNPC (Nigeria National Petroleum Corporation) on Premium Motor Spirit in 2019.
“Let me take this opportunity to address and clarify the under-recoveries on petrol.
“In a period of economic challenges where purchasing power is weak, we must reduce some of the burden on Nigerians,” he said.
The News Agency of Nigeria (NAN) reports that the Buhari administration had withdrawn subsidy on petrol in 2016, forcing independent oil marketers to pull out of importation of the product.
Their withdrawal left the NNPC as the sole importer of petrol, whose pump price remained capped at N145 per litre against a landing and supply cost of N185/litre.
Since then, the NNPC has been drawing from the Nigeria Liquefied Natural Gas (NLNG) dividend fund to cover the under-recoveries amounting to N40/litre in importation of petrol.
So far, the NNPC has utilised 1.05 billion dollars or N320 billion of the fund to cover the under-recoveries, according to its Group Managing Director, Mr Maikanti Baru.
However, this has drawn the anger of the Senate, which believes the oil company lacked the legal powers to unilaterally spend the money without appropriation by the National Assembly.
According to analysts, the provision for subsidy in the 2019 budget proposal will lay to rest the disagreement between the lawmakers and the NNPC on the matter.
Buhari said the problem with subsidy in the past was abuse and corruption especially by independent oil marketers.
“Today, the government-owned NNPC is the sole importer of PMS, and therefore the under-recovery is from the NNPC trading account.
“This means the possibility of some oil marketers filing bogus claims is removed.
“We will continue working to bring it (subsidy) downward to ensure such revenue sources are freed up to meet the developmental needs of our people,” the president said.