2019 Budget Proposal: Seven Things To Note About Buhari’s Next Level Budget

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BudgetThe 2019 Elections

President Muhammadu Buhari presented the 2019 budget to the National Assembly on Wednesday afternoon, in what could be his final appearance in the Senate chambers.

Senate President Bukola Saraki and Speaker Yakubu Dogara were present.

While the president gave his speech, explaining the performance of the 2018 budget, he was often heckled by legislators, supposedly of the Opposition, and applauded by members of his party. Seated in the audience were a number of Buhari’s ministers notably Zainab Usman (Finance), Babatunde Fashola (Power, Works and Housing) and Rotimi Chibuike Amaechi (Transport).

The president got through his speech without any incidents. Here are seven things to take not of from his presentation.

Capital Expenditure: <30%

The Buhari administration projects to spend a total of N8.83trillion in the next fiscal year. A breakdown of this figure shows Non-Debt Recurrent Expenditure will take N4.04 trillion while Debt service is pegged at N2.14 trillion. The government intends to use 80% of the debt service allocation to settle domestic obligations while paying bondholders N1.71tn in interest payments. Statutory transfer of N492.36 billion and Sinking fund of N120 billion and Capital expenditure at N2.031 trillion make up the rest of the expenditure plan. Capital expenditure makes up 23% of the budget.

Basis For The Estimates

Buhari’s pre-election budget was drafted based on the following benchmarks:

  • Oil price: $60 per barrel
  • Daily production rate of 2.3 million barrels
  • Exchange rate of N305 to $1
  • Real GDP growth: 3.01 per cent, and
  • Inflation rate: 9.98 per cent.

At the moment, Brent Crude is trading around $56 per barrel, with changes in OPEC and supply glut creating price instability.  November figures for inflation was 11.28 per cent.

Plans For More Revenue

This is another deficit budget, though the expenditure plan is lower. The revenue projections for 2019, like in other years, are optimistic:

Total Revenue is expected to be N6.97tn, with oil contributing N3.73tn and N1.39tn from non-oil sources. Others avenues are expected to yield N1.85tn.

However, the federal government’s actual total revenue in 2017 was barely a trillion over what Buhari hopes to gain from non-oil in the next year. What does it plan to do differently to be able to gather more revenue? He did mention, in his speech, about working the National Assembly to increase tax collections.

2018 Performance; More Roads In The North?

Before presenting the 2019 figures, Buhari enumerated achievements from the past Budget, mentioning roads and other projects. This part of the address generated considerable heckling from the president’s opponents in the chamber, with interjections like “It’s a lie” and “only in the north” often heard.

In reality, the president’s address referred to ongoing or about to be completed projects in southern places like Ugep, Cross River state, and Ariaria in Abia state.

Education and Health Allocations

These are two sectors directly linked with Nigerian’s human capital development. They have not received enthusiastic support from the Buhari government in the past three years and the reduction in the overall expenditure plan probably casts off any hopes of drastic upward change in fortunes.

Beside allocations for the National Assembly, security, INEC, the line items on education and healthcare when published will once again generate much dissatisfaction.

Budget For Another President?

Presidential Election day is two months away. Whoever wins will have 102 days to prepare for inauguration.

Should Buhari win, it will simply be a continuation. But the event of a successor could factor into the period and process it will take the National Assembly to (pad and) pass the budget. The 2018 budget, presented in December 2017, was signed in June 2018. Were Buhari to lose the elections, federal legislators may likely delay passage to accommodate the interests of the incoming president and have him sign it.

Buhari or the Dude From Sudan?

Towards the end of his speech, the president coughed. There was the brief pause that stirred interest on what would happen next.

Then he continued, perhaps intentionally trying to play the mind games he had started with his response at Poland to being Jubril from Sudan. This writer has not had issues with the identify of the man occupying Aso Rock.

There was nothing from his presentation to provide further evidence to those still forensically auditing photos of Buhari’s ears. Whoever this was sounded strong and looked like some man from Daura who campaigned in 2014 to be president.

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