Connect with us

Economy

2018 budget: FG Targets N311bn From Asset sale, Privatisation

Published

on

udo-udoma
  • 2018 budget: FG Targets N311bn From Asset sale, Privatisation

The Federal Government is aiming to generate of N311bn from privatisation of public properties and the sale of national assets next year to partly finance the 2018 budget.

This is contained in the 2018 budget proposals submitted last Tuesday to a joint session of the National Assembly by President Muhammadu Buhari.

The Minister of Budget and National Planning, Udo Udoma, during a public presentation of the 2018 budget proposals in Abuja on Tuesday, stated that the sum of N306bn was being expected from privatisation proceeds, while the balance of N5bn would come from the sale of government assets.

Present at the event were the ministers of Education, Adamu Adamu; Finance, Mrs. Kemi Adeosun; Information, Alhaji Lai Mohammed; Petroleum Resources, Dr. Ibe Kachikwu; and the Head of the Civil Service of the of the Federation, Mrs. Winifred Oyo-Ita, among others

Udoma said the amount was part of the financing items of N6.6tn that would be used to fund the 2018 budget of N8.6tn.

Giving a breakdown of the expected sources of revenue, he stated that crude oil would contribute 37 per cent of the total revenue for the budget, adding that Companies Income Tax, Value Added Tax and customs duties would account for 12 per cent, 3.1 per cent and 4.9 per cent, respectively of the projected revenue for the 2018 fiscal year.

Others are recoveries, 7.8 per cent; tax amnesty, 1.3 per cent; signature bonus, 1.7 per cent; Joint Venture equity restructuring, 10.7 per cent; grants and donor funding, three per cent; and others, 5.5 per cent.

Udoma said the 2018 revenue projection reflected new funding mechanism for Joint Venture operations, allowing for cost recovery in lieu of the previous cash call arrangement.

He added that there would be additional oil-related revenues, including royalty, new marginal field licences, early licensing renewals and a review of fiscal regime for oil production sharing contracts.

According to him, the government is restructuring its equity in the JV oil assets, adding that the proceeds would be reinvested in other assets.

In addition, the minister said there were plans to increase excise duty rates on alcohol and tobacco, noting that this would help improve the revenue performance of the government.

Providing insights into the revenue performance of the 2017 budget, Udoma stated that oil revenue as well as that of the Nigeria Customs Service performed according to their respective targets.

For instance, he said the sum of N1.6tn was earned from oil between January and September, while the revenue generated by the Customs was N207bn out of the N208.17bn pro-rated as of the end of September.

This, he noted, was a performance of 99 per cent for the NCS.

He put collections from Companies Income Tax and Value Added Tax at N407.59bn and N95.57bn, respectively, adding that this implied revenue performance of 67 per cent and 53 per cent, respectively of the pro-rated budget.

Udoma, however, lamented that independent revenue did not perform according to target as only N155.14bn, which was just 20 per cent of the target, was remitted by agencies of government.

He said as a result of the poor performance of the agencies, the Federal Government was considering a review of their operational efficiency to make them more fiscally responsible.

The minister stated, “Despite the delay in the passage of the budget, we have been able to spend N450bn as of October 31, 2017. As a result of the challenges in the economy, our growth target for 2017 is revised downwards from 2.19 per cent to 1.5 per cent.

“Engagements are continuing with stakeholders in the Niger Delta to ensure stability in oil production. Efforts are also ongoing to ensure that all taxable Nigerians and companies comply with the legal requirements to declare income from all sources and remit taxes due to the appropriate authorities.

“In addition, we are working to improve government-owned enterprises’ revenue performance by reviewing their operational efficiency and cost-to-income ratios, and generally ensuring they operate in a more fiscally responsible manner.”

On the focus of the 2018 budget, the minister said the government would continue to spend more on ongoing infrastructure projects that had the potential for job creation and inclusive growth.

He added that the Federal Government would continue to leverage private capital and counterpart funding for the delivery of infrastructure projects.

The minister said for the 2018 capital projects, the government would carry out huge projects in transportation; power, works and housing; health; water resources; agriculture and rural development; mines and steel development; industry, trade and investment; and education, among others.

For instance, he said N35.4bn had been set aside for the Federal Government’s National Housing Programme; N10bn for the Second Niger Bridge; N294bn for construction and rehabilitation of major roads nationwide; N8.9bn for procurement of vaccines; and over N50bn for water supply, rehabilitation of dams and irrigation projects nationwide.

Udoma added that N25.1bn had been earmarked for the promotion and development of value chains across 30 different commodities; N4bn for agri-business and market development; N46.3bn for special economic zone projects across the geo-political zones to drive manufacturing and exports; and N19.28bn in form of tax credit to support export through the Export Expansion Grant, among others.

He added, “Our journey out of recession has helped us rest our priorities and to focus on more reforms and activities that have both short and long-term bearings on sustainable economic growth. Already, diversification efforts are yielding positive results with significant growth in the non-oil sector.

“Government will continue to create the enabling environment for the different sectors to increase their investments and contribute significantly to job creation and economic growth. The goal of the 2018 budget is to consolidate the gains recorded so far by this administration and ensure that all Nigerians benefit from economic progress.”

Also speaking at the event, Adeosun stated that the government would continue to come up with reforms that would boost tax revenue.

She stated that the current administration did believe in granting tax waivers to businesses, noting that rather than giving waivers, it was working on how to make the investment climate friendlier for enterprises to thrive

The Finance minister blamed the country’s low tax paying culture for the failure of previous administrations to emphasise the collection of taxes because of the huge money that the country was making from oil revenue.

She said now that oil revenue was no longer coming like it was in the past, there was a need to look inwards on how to raise the country’s tax to Gross Domestic Product ratio above the current six per cent.

Adeosun lamented that out of the estimated 69 million working population in the country, only 14 million of were actually paying taxes, a situation she described as unacceptable.

She said many high net-worth individuals were not paying taxes, stating that this was what made the government to come up with the nine-month amnesty window under the Voluntary Asset and Income Declaration Scheme.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Economy

Minister of Power Pledges 6,000 Megawatts Electricity Generation in Six Months

Published

on

power project

Adebayo Adelabu has made a bold pledge to ramp up electricity generation to 6,000 megawatts (MW) within the next six months.

This announcement comes amidst ongoing efforts to tackle the longstanding issue of inadequate power supply that has plagued the country for years.

During an appearance on Channel Television’s Politics Today program, Adelabu said the government is committed to resolving the issues hindering the power sector’s efficiency.

He expressed confidence in the administration’s ability to overcome the challenges and deliver tangible results to the Nigerian populace.

Currently, Nigeria generates and transmits over 4,000MW of electricity with distribution bottlenecks being identified as a major obstacle.

Adelabu assured that steps are being taken to address these distribution challenges and ensure that the generated power reaches consumers across the country effectively.

The minister highlighted that the government has been proactive in seeking the expertise of professionals and engaging stakeholders to identify the root causes of the power sector’s problems and devise appropriate solutions.

Adelabu acknowledged the existing gap between Nigeria’s installed capacity of 13,000MW and the actual generation output, attributing it to various factors that have impeded optimal performance.

Despite these challenges, he expressed optimism that the government’s initiatives would lead to a substantial increase in electricity generation, marking a significant milestone in Nigeria’s energy sector.

Addressing concerns about the recent decline in power generation due to low gas supply, Adelabu assured Nigerians that measures are being taken to rectify the situation.

He acknowledged the impact of power outages on citizens’ daily lives and reiterated the government’s commitment to providing stable electricity supply within the stipulated timeframe.

The Minister’s assurance of achieving 6,000MW of electricity generation in the next six months comes as a ray of hope for millions of Nigerians who have long endured the consequences of inadequate power supply.

With ongoing reforms and targeted interventions, there is optimism that Nigeria’s power sector will witness a transformative change, ushering in an era of improved access to electricity for all citizens.

Continue Reading

Economy

Nigeria’s Economic Woes to Drag Down Sub-Saharan Growth, World Bank Forecasts

Published

on

world bank - Investors King

The World Bank’s latest report on the economic outlook for Western and Central Africa has highlighted Nigeria’s sluggish economic growth as a significant factor impeding the sub-region’s overall performance.

According to the report, while economic activities in the region are expected to increase, Nigeria’s lower-than-average growth trajectory will act as a hindrance to broader economic expansion.

The report indicates that economic activity in Western and Central Africa is set to rise from 3.2 percent in 2023 to 3.7 percent in 2024 and further accelerate to 4.2 percent in 2025–2026.

However, Nigeria’s growth, projected at 3.3 percent in 2024 and 3.6 percent in 2025–2026, falls below the sub-region’s average.

The World Bank underscores the importance of macroeconomic and fiscal reforms in Nigeria, which it anticipates will gradually yield results.

It expects the oil sector to stabilize with a recovery in production and slightly lower prices, contributing to a more stable macroeconomic environment.

Despite these measures, the report emphasizes the need for structural reforms to foster higher growth rates.

In contrast, economic activities in the West African Economic and Monetary Union are projected to increase significantly, with growth rates of 5.9 percent in 2024 and 6.2 percent in 2025.

Solid performances from countries like Benin, Côte d’Ivoire, Niger, and Senegal are cited as key drivers of growth in the region.

The report also highlights the importance of monetary policy adjustments and reforms in supporting economic growth.

For instance, a more accommodative monetary policy by the Central Bank of West African States is expected to bolster private consumption in Côte d’Ivoire.

Also, investments in sectors such as agriculture, manufacturing, and telecommunications are anticipated to increase due to improvements in the business environment.

However, Nigeria continues to grapple with multidimensional poverty as highlighted by the National Bureau of Statistics.

Over half of Nigeria’s population is considered multidimensionally poor, with rural areas disproportionately affected. The World Bank underscores the need for concerted efforts to address poverty and inequality in the country.

Sub-Saharan Africa as a whole faces challenges in deepening and lengthening economic growth. Despite recent progress, growth remains volatile, and poverty rates remain high.

Continue Reading

Economy

Fitch Downgrades China’s Outlook to Negative Amid Real Estate Slump

Published

on

fitch Ratings - Investors King

Fitch Ratings has downgraded China’s economic outlook to negative, citing concerns over the country’s mounting debt and the ongoing slump in its real estate sector.

This decision casts a shadow over China’s economic recovery efforts and raises questions about the resilience of its financial system in the face of mounting challenges.

The downgrade comes at a critical juncture for China as the government grapples with the fallout from a prolonged downturn in the real estate market, which has long been a cornerstone of the country’s economic growth.

Fitch’s decision underscores the severity of the challenges facing China’s economy and the urgent need for policymakers to implement effective measures to address the underlying issues.

Amid growing uncertainty about the outlook for the world’s second-largest economy, Fitch warned that the Chinese government is likely to accumulate more debt as it seeks to stimulate economic growth and mitigate the impact of the real estate slowdown.

The agency’s negative outlook reflects concerns that China’s debt burden could continue to rise, posing risks to the stability of its financial system.

The real estate sector, which has been a key driver of China’s economic growth in recent decades, has been experiencing a pronounced slowdown in recent months.

This downturn has been exacerbated by government measures aimed at curbing speculative investment and addressing housing affordability concerns. As property prices continue to decline and housing sales stagnate, fears of a broader economic slowdown have intensified.

China’s government has sought to downplay concerns about the impact of the real estate slump on the broader economy, emphasizing its commitment to maintaining stability and pursuing sustainable growth.

However, Fitch’s downgrade suggests that the challenges facing China’s economy may be more significant than previously thought and require a more comprehensive and coordinated policy response.

The negative outlook from Fitch follows a similar move by Moody’s Investors Service in December, highlighting the growing consensus among rating agencies about the risks facing China’s economy.

While financial markets initially showed little reaction to Fitch’s announcement, analysts warn that the downgrade could weigh on market sentiment in the near term, especially as investors await key economic indicators due to be released in the coming weeks.

China’s public debt has surged in recent years, fueled by government stimulus measures aimed at supporting economic growth and offsetting the impact of the COVID-19 pandemic.

With public debt nearing 80% of gross domestic product (GDP) as of mid-last year, according to the Bank for International Settlements, concerns about the sustainability of China’s debt levels have been mounting.

Despite these challenges, China’s sovereign bond market remains relatively insulated from external pressures, with foreign ownership accounting for a small fraction of total holdings.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending