- Pegs expenditure framework at N8.6trn
- The Federal Executive Council (FEC) has approved the draft 2018 National Budget and is liaising with the National Assembly on its presentation by President Muhammadu Buhari.
The Minister of Budget and National Planning, Sen. Udoma Udo Udoma, announced this to State House correspondents after the FEC meeting chaired by President Buhari.
However, Udoma declined to give details on the economic document.
He insisted that only the President has the prerogative to make the details available to Nigerians.
According to Udoma, “Council approved a draft 2018 budget proposal. So, we will be liaising with the National Assembly to agree on a date on which the President will formally submit it to them.
“It is the President’s prerogative to submit the budget, and give the details. I will be operating above my brief if I do that; the constitution gives that authority to the President.
“We did promise that the budget will be ready in October and it is ready. Before now we use to submit in December. So, there is a very big difference”.
The Medium Term Expenditure Framework (MTEF), earlier presented to the lawmakers, indicates that that the 2018 Budget will have an aggregate expenditure profile of about N8.6 trillion (including grants and donor funding of N199.91billion).
This provision exceeds the 2017 Budget aggregate expenditure estimate of N7.44 trillion by 15.5 per cent (N1.16 trillion).
The aggregate revenue to fund the 2018 Budget is expected to be around N5.65 trillion (11% or N562.50 billion over the 2017 estimate of N5.08 trillion).
About 43.2 per cent of this revenue is projected to come from oil sources while the balance is to be earned from non-oil sources.
These figures are subject to confirmation by President Buhari when he presents the fiscal proposals to the National Assembly.
Udoma declared that while he would not divulge details on behalf of the President, it was noteworthy that the Executive had kept to its promise to have the 2018 Budget ready by October.
On the performance of the 2017 Budget, the Minister of Finance, Mrs. Kemi Adeosun, announced that so far, only N450 billion has been released for capital projects.
She said that the FEC approved a Road Trust Fund to drive the quest for easier construction and rehabilitation of 33,000kms of federal roads using the private sector under a Tax Relief Scheme.
The total road network in the country is about 200,000km.
The Fund is a form of Public Private Partnership that will allow private sector operators to collectively fund road provision in exchange for tax credits. This will complement the Federal Government’s budgetary allocation to the roads.
The Road Trust Fund is a revision of the existing infrastructure tax relief scheme that allows for tax relief to companies which incur expenditure on public infrastructure, which only two companies have so far been able to take advantage of.
According to the minister, “private sector participation in what was previously a Federal Government monopoly will create more efficient delivery of road projects. Better negotiation and the promise of prompt payment to contractors is expected to materially reduce project costs”.
Participating companies will be allowed to recover 100 percent of costs incurred on road infrastructure as a tax credit against total tax payable by them (including up to 10 per cent for cost of funds).
Other incentives include: accelerated depreciation to enable recovery in three years rather than four years for standard assets; and ability to directly intervene in roads that are critical to their businesses which drives competitiveness.
Besides, the relief allows for cost recovery within a single year instead of three years for economically disadvantaged areas.
Once the roads are completed they are handed over to the Federal Government which may decide to toll the roads in accordance with the National Tolling Policy.
Meanwhile, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, announced the FEC’s approval of a N796.6 million contract for the Transmission Company of Nigeria (TCN) for the construction of 330KV transmission line to evacuate power from the Azura plant in Edo State.
The 14-km line is expected to be ready in May 2018.