As part of moves to get the country out of recession, the Federal Government has outlined new revenue sources to fund the 2017 budget.
This is even as the House of Representatives also yesterday passed for the Second Reading the 2017-2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The Minister of Budget and National Planning, Udoma Udo Udoma, who unfolded the new revenue measures, stated this when he appeared before a joint committee of the Senate on Appropriation and Finance, to defend the MTEF/FSP. He said the Federal Government will issue new oil licences, review the current joint venture arrangements with oil companies, review marginal oil fields and mount pressure on revenue generating agencies to surpass expected targets.
Also, the government has stated that the 2017 budget oil benchmark will be pegged at $42.50. This is a departure from $38 per barrel which was used for 2016 budget.
Daily oil production volume for next year was retained at 2.2 million barrels. The exchange rate was put at N305 to the dollar. The new exchange rate is significantly higher than that of 2016. The 2016 budget exchange rate was pegged at $197.
Udoma said N10 trillion is being targeted by the government as revenue during the 2017 fiscal year. Out of this amount, about N5 trillion is expected to be generated from sales of crude oil.
Non-oil revenues will rake in about N5.06 trillion. These revenues are expected to come from corporate and company taxes, Nigeria Liquefied Natural Gas, Stamp Duties, capital gains tax, Value Added Tax (VAT), Customs, Excise, fees, surcharges on luxury items, special levies and Federal Government independent revenue.
The 2017 budget which was initially pegged at N6.6866 trillion, has also been raised to N7.298 trillion. In 2016, the government submitted an ambitious N6.059 proposal to the National Assembly.
Out of this, the government is expected to expend N1.488 trillion in servicing domestic debts. In 2016 budget, the Federal Government earmarked N1.307 trillion.
On foreign debt, the Federal Government will spend N175.882 billion. It spent N54.480 on foreign debt servicing in the 2016 budget.
On capital expenditures, the Federal Government budgeted N2.058 trillion. In the 2016 budget, N1.587 was earmarked by the Federal Government for capital projects.
Recurrent expenditures will gulp N1.866 trillion. About N1.748 was budgeted for the same purpose in the 2016 Appropriation. The new figure is coming, despite claims by the Federal Government that thousands of ghost workers have been yanked off from government’s payroll.
The Federal Government also intends to borrow N2.321 trillion. Out of this, N1.253 will be sourced locally, while N1.067 will be gotten from foreign sources. In the 2016 budget, N1.182 was reportedly borrowed locally, while N635.8 billion was gotten through foreign borrowing.
On budget projections, Udoma said: “I know N7 trillion seems larger than N6 trillion. In actual dollar term, the 2017 budget is smaller. We have had challenges in revenue generation in funding the 2016 budget. We are trying to get to the bottom of revenue generating agencies in order to raise more money.
“We want to issue a presidential order to ensure that revenue generating agencies are unable to spend money unless payment of salaries until their budgets are passed.
President Muhammadu Buhari is expected to present the 2017 budget proposal today before a joint session of the National Assembly.
Unlike in the past, the budget submission will go ahead, despite the non-passage of MTEF and FSP by the Senate.
Meanwhile, the House of Representatives yesterday passed for Second Reading, the 2017-2019 MTEF/FSP submitted by Mr. President.
The document was referred to the joint Committees on Appropriations, Finance and Loans, Aids and Debt Management. It contains plans for capital expenditure for 2016 increased to N635.77 billion.
It also has a revenue target of N4.169 trillion (against N3.856 trillion in 2016) and total expenditure of N6.687 trillion.
A further breakdown of the MTEF showed the Gross Domestic Product (GDP) is expected to grow at 3.02% in 2017, with crude oil benchmark pegged a $42.5 per barrel and 2.2mbpd oil production; foreign exchange pegged at N350/$ while fiscal deficit was pegged at 3 percent.
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