President Muhammadu Buhari has said that the deficit of N2.36 trillion for 2017, which is about 2.18 per cent of GDP, will be financed mainly by borrowing a projected N2.32 trillion.
The president said this in Abuja on Wednesday while presenting the 2017 budget estimates of N7.298 trillion before the joint session of the National Assembly.
According to him, government’s intention is to source N1.067 trillion or about 46% of the borrowing from external sources while N1.254 trillion will be borrowed from the domestic market.
“This fiscal plan will result in a deficit of N2.36 trillion for 2017 which is about 2.18 per cent of GDP.
“The deficit will be financed mainly by borrowing which is projected to be about N2.32 trillion.
“Our intention is to source N1.067 trillion or about 46 per cent of this borrowing from external sources while, N1.254 trillion will be borrowed from the domestic market.”
The President stated that the proposed aggregate expenditure of N7.298 trillion would comprise statutory transfers of N419.02 billion; debt service of N1.66 trilliion; Sinking fund of N177.46 billion to retire certain maturing bonds;
He said it would also comprise non-debt recurrent expenditure of N2.98 trillion and Capital Expenditure of N2.24 trillion (including capital in Statutory Transfers).
On Statutory Transfers, the president said “we have increased the budgetary allocation to the Judiciary from N70 billion to N100 billion.
He said the increase in funding the judiciary was meant to enhance the independence of the judiciary and enable them to perform their functions effectively.
He also disclosed that a significant portion of recurrent expenditure had been provided for the payment of salaries and overheads in institutions providing critical public services.
The budgeted amounts for these items are N482.37 billion for the Ministry of Interior; N398.01 billion for Ministry of Education; N325.87 billion for Ministry of Defence and N252.87 billion for Ministry of Health.
“We have maintained personnel costs at about N1.8 trillion.It is important that we complete the work that we have started of ensuring the elimination of all ghost workers from the payroll.
“Accordingly, adequate provision has been made in the 2017 Budget to ensure all personnel that are not enrolled on the Integrated Personnel Payroll Information System platform are captured.
“We have tasked the Efficiency Unit of the Federal Ministry of Finance to cut certain overhead costs by 20 per cent.”
He reassured that his administration would continue to eliminate all non-essential costs to free resources to fund capital expenditure.
He said the size of the 2017 capital budget of N2.24 trillion (inclusive of capital in Statutory Transfers), or 30.7 per cent of the total budget, reflected his administration’s determination to spur economic growth.
“These capital provisions are targeted at priority sectors and projects.
“Specifically, we have maintained substantially higher allocations for infrastructural projects which will have a multiplier effect on productivity, employment and also promote private sector investments into the country.”
He said key capital spending provisions in the Budget included Power, Works and Housin, N529billion; Transportation, N262 billion; Special Intervention Programmes, N150 billion; Defence, N140 billion; Water Resources, N85 billion and Industry, Trade and Investment, N81 billion.
Others are Interior, N63 billion; Education, N50 billion; Universal Basic Education Commission, N92 billion; Health, N51 billion; Federal Capital Territory, N37 billion; Niger Delta Ministry, N33 billion and Niger Delta Development Commission, N61 billion.
He said N100 billion had been provided in the Special Intervention Programme as seed money into the N1 trillion Family Homes Fund that would underpin a new social housing programme.
According to him, the substantial expenditure is expected to stimulate construction activity throughout the country