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Defence, security dominates Nigeria’s 2019 Budget with N1.03trn allocation 

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Subsidy to gulp N305bn

Jude Johnson

Nigeria’s President Muhammadu Buhari has on Wednesday, presented to the federal legislators a 2019 budget of N8.83 trillion with allocations to the Defence and Security sector taking larger chunk of the estimated expenditure.

 The 2019  budget estimate is N300 billion lower than the N9.1 billion being implemented for the current fiscal year but the combined allocation for the National Security is over N1 trillion.

An analysis of the sectoral allocations, indicated that the Ministry of Interior got the highest figure of  N569.07billion, followed by  Education (N462.24 billion) , Defence (N435.62 billion), and Health (N315.62 billion). The combined expenditure for Interior and defence at N1,031.31 trillion.

The significant sectoral budgetary allocation to defence and security mirrors the fact that the country is currently plagued with diverse security challenges with an ongoing military operations in 34 of 36 states in the country.

Also, the upsurge in Boko Haram terrorists attacks in the North East, farmers-herders conflict in the North Central and banditory in the North West as well as the Niger Delta militancy have upped the stakes in national security measures.



Another major highlight of the budget is the provision of N305 billion for under-recovery by the NNPC on petrol or fuel subsidy.

“We have allowed N305 billio, equivalent to one billion US dollars for under-recovery by the NNPC (Nigeria National Petroleum Corporation on Premium Motor Spirit in 2019,” the President said.

According to the budget proposal, projected revenue stood at N6.97 trillion, representing  about three per cent lower than the 2018 estimate of N7.17 trillion.

The estimates left a fiscal deficit of about N1.86 trillion, as against the N1.950 trillion deficit contained in the current budget.

The president who addressed a joint session of the National Assembly, proposed to spend N4.04 trillion which represented over N500 billion over the 2018 recurrent expenditure of N3.15 trillion.

It was an indication of a departure from the administration’s pledge to increase the Capital vote against recurrent.

Capital vote was down from N2.873 trillion in 2018 to N2.031 trillion in the proposed budget.

Statutory transfers also fell from 530 billion to a new figure of N492.36 billion in the proposed budget.

The sum of N2.14 trillion was provided for debt servicing in the 2019 budget, which was a slight increase when compared with the N2. 014 trillion in the previous budget.

He said that 2019 budget which he tagged, “Budget of Continuity,” was based on a crude oil benchmark price oil price of $60per barrel, with an output of Oil production estimate of 2.3 million barrels per day.

According to the President, the  exchange rate of N305/US$ would be used in 2019, the same figure as in the 2018 budget, although real exchange rate has been hovering around N360/$1 for a long period in the foreign exchange market.

” />President Muhammadu Buhari (M), presenting the 2019 Budget at the National Assembly in Abuja on Wednesday-Vanguard Photos

A Real Gross Domestic Product (GDP) growth of 3.01 percent was projected, with an inflation rate of 9.98percent.

President Buhari gave a breakdown of the expected revenue consisting of oil revenue projected at N3.73 trillion, and non-oil revenue estimated at N1.39 trillion.

“The estimate from non-oil revenue consists of N799.52 billion from company income tax; N229.34 billion from value added tax, and customs duties of N302.5 billion. We have reduced our expectations from independent revenue  to N624.58 billion.

“Other revenues expected in 2019 include various recoveries of N203.38 billion; N710 billion as proceeds from the restructuring of government equity in joint ventures, and other sundry incomes of N104.1 billion,” he said.

The President explained that the total N8.83 trillion proposed expenditure for 2019 included grants and donor funds amounting to N209.92 billion.

He added that although the 2019 estimate was lower than the 2018 budget of N9.1 trillion, it was higher than the N8.6 trillion contained in the Medium Term Economic framework.

On the deficit, the president said that “Reduction is in line with our plan to progressively reduce deficit and borrowings over the medium term.”

An analysis of the sectoral allocations, indicated that the Ministry of Interior got the highest figure of  N569.07billion, followed by  Education (N462.24 billion)   Defence (N435.62 billion), and Health (N315.62 billion).

According to the President, allocation to the Social Intervention Projects, SIP, was retained at N500 billion, consisting of N350 billion recurrent and N150 billion capital, reflecting  government’s  continued determination to pursue inclusive gender-sensitive and pro-poor growth.

President Buhari said that as part of moves by the government to sustain the peace in the Niger Delta, the provision of N65 billion for the Presidential Amnesty Programme had been retained in the 2019 budget.

The sum of N45 billion was provided for the North East Intervention Fund and another N10 billion as take-off grant for the North East Development Commission.

President Muhammadu Buhari in a meeting with Nigeria’s security chiefs



Budget 2018  performance

Earlier in his review of the 2018 budget, President Buhari said that it had achieved 67 per cent in terms of expenditure, with revenue recording 53 per cent, as at the end of the third quarter.

His words, “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 per cent 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.

“Of the total appropriation of N9.12 trillion, N4.59 trillion had been spent by September 30, 2018 against the prorated expenditure target of N6.84 trillion. 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 June 20, 2018, the sum of N820.57 billion had been released for capital projects as at  December 14, 2018. We have carried over capital projects that were not likely to be fully funded by year-end 2018 to the 2019 budget.”

New minimum Wage

On minimum wage, President Buhari promised to send an Executive Bill to the National Assembly to address the lingering problem of minimum wage, adding  “Let me say something about the minimum wage issue. I am committed to addressing the issue of a new minimum wage and I will be sending a bill to the National Assembly on this. However, in order to avoid a fiscal crisis for the Federal Government, as well as the states, it is important to devise ways to ensure that its implementation does not lead to an increase in the level of borrowing.


“I am accordingly setting up a high-powered technical committee to advise on ways of funding an increase in the minimum wage, and the attendant wage adjustments, without having to resort to additional borrowings.

“The work of this technical committee will be the basis of a Finance Bill which will be submitted to the National Assembly, alongside the Minimum Wage Bill. In addition, the Technical Committee will recommend modalities for the implementation of the new minimum wage in such a manner as to minimize its inflationary impact, as well as ensure that its introduction does not lead to job losses.”

Credits | Vanguard

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