Connect with us

Economy

How FG’ll Raise N9.1tn to Fund 2018 Budget

Published

on

budget
  • How FG’ll Raise N9.1tn to Fund 2018 Budget – Udoma

The Minister of Budget and National Planning, Udo Udoma, has explained how the N9.1tn revenue to finance the 2018 budget will be raised by the Federal Government.

Speaking during the public presentation of the 2018 budget on Thursday in Abuja, Udoma expressed optimism that the government would be able to generate enough revenue to finance its programmes as contained in the fiscal document.

The event was attended by the Minister of Finance, Mrs Kemi Adeosun; Minister of State for Budget and National Planning, Hajiya Zainab Ahmed; the Director-General, Budget Office of the Federation, Mr Ben Akabueze, and other top government officials.

The 2018 budget, which was designed to consolidate on the Economic Recovery and Growth Plan, was presented to the National Assembly on November 7, 2017.

It was passed by the lawmakers on May 16, 2018, transmitted to President Muhammadu Buhari on May 25 and assented by him on June 20.

The fiscal document signed by Buhari had a total proposed spending of N9.1tn, made up of N2.87tn for capital expenditure, N3.51tn for recurrent (non-debt) expenditure and N2.01tn projected to be spent on debt servicing.

Giving a breakdown of how the N9.1tn budget would be financed, Udoma said the sum of N2.99tn would be generated from oil revenue, N31.25bn would come from dividend to be received from the Nigerian LNG Limited, while N1.17bn was expected to be realised from minerals and mining revenue.

The minister stated that the Federal Government was targeting to generate N658.55bn from Companies Income Tax, N207.51bn from Value Added Tax, N324.86bn from Customs duties, while N57.87bn was expected to come from Federation Account levies.

In the same vein, he said the government was expecting N847.95bn as independent revenue from its agencies, while tax amnesty income, signature bonus and unspent balance from previous years would provide N87.84bn, N114.3bn and N250bn, respectively.

He also said the sum of N374bn was expected to be realised from domestic recoveries and fines, while N138.44bn would come from other Federal Government recoveries.

The minister added that the sum of N710bn would be realised from the sale of oil assets, while grants and donor funding would contribute N199.92bn.

He stated that N146.64bn would be realised from other unnamed revenue sources, while the budget deficit of N1.95tn would be financed through borrowing of N1.64tn.

The N1.64trn borrowing is made up of domestic borrowing of N793bn and foreign debt of N849bn.

In addition, the minister said about N306bn was expected from privatisation proceeds, while N5bn was projected to be realised from the sale of other government property to partly finance the deficit.

He noted that the government would be implementing some key reform initiatives contained in the ERGP in order to boost its revenue.

Some of them are deployment of new technology to improve revenue collection, upward review of tariffs and tax rates where appropriate, and stronger enforcement action against tax defaulters.

The government, according to Udoma, will improve the revenue performance of government-owned enterprises by reviewing their operational efficiency and cost-to-income ratios.

He said, “The 2018 revenue projections reflect new funding mechanism for Joint Venture operations, allowing for cost recovery in lieu of the previous cash call arrangement; and additional oil-related revenue, including royalty recovery, new/marginal field licences and early licensing renewals.

“Our journey out of the recent economic recession has helped us reset our priorities and to focus more on reforms and activities that have both short and long-term bearings on sustainable economic growth.

“In line with the ERGP, we are seeking to optimise derivable benefits from oil by restructuring our equity in JV oil assets while we intensify our efforts at accelerating economic diversification and non-oil revenue generation.”

The minister added, “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 private sector to increase its investment and contribute significantly to job creation and economic growth.”

With the slashing of funds meant for the completion of key projects between this year and the next by the lawmakers, the implication, according to him, is that there may be a shift in their completion dates.

This, he noted, was because the available funds were insufficient to cater for the costs of the projects.

While calling for the cooperation of the legislature, Udoma noted that the Executive would soon approach them with a request for a readjustment of the already signed budget.

“We are determined to ensure that the budget is effectively implemented. We will work closely with the National Assembly where we need adjustment or a supplementary budget. We hope that they will cooperate with us,” he added.

Akabueze, on his part, promised that the 2018 budget would be the last time that the government would present the annual budget estimates to the National Assembly late.

He said the country would never experience any delay in the commencement of the budget under his watch as the DG of the Budget Office, adding that the development was slowing down the expected growth of the economy.

He noted that the understanding between the executive and legislature would be strengthened to accelerate a cordial working relationship.

Akabueze stated, “This event is holding just a day after the budget was signed, which underscores the seriousness we attach to what we are doing and also a sense of decency to which we must approach the vision of this project.

“This will be the last time, hopefully, that the Federal Government’s budget for any fiscal year will be delayed.”

In her presentation at the event, Ahmed debunked claims that the money meant for the Special Intervention Programme, including the home-grown school feeding programme, was mismanaged.

She explained that those who tried to sabotage the programme were caught and punished accordingly.

She said, “We run the programme in such a way that there are checks and balances. And there has been an attempt from different levels to short-change the programme, but because of the things we have put in place, we have easily found out and taken it up with security agencies, and we are trying to curb the challenges.”

“We have had some people that have been apprehended for short-changing the system.”

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Continue Reading
Comments

Economy

Finance Minister Edun Lauds Nigerians for Enduring Economic Reforms Amidst Hardships

Published

on

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has commended Nigerians for enduring the hardships caused by the economic reforms of President Bola Tinubu.

Minister Edun, who spoke on Thursday during an interactive session with the Senate Committee on Finance at the National Assembly in Abuja, highlighted that these reforms have begun to yield positive results.

Edun explained that two critical reforms initiated by the Tinubu government are now at the stage of delivering results.

He added that these reforms will restore the fiscal viability of the country.

“The two critical reforms on the market-based price of Premium Motor Spirit (PMS) and foreign exchange are now at the stage of delivering results, which will, by extension, restore the viability of the nation’s economy through fiscal restoration.”

“These two pillars of the economic reforms, which are now taking positive shape, portend additional revenue for the government, recovery of NNPCL’s finances, and a strong foundation for growing the economy, attracting investment, and creating jobs.”

“I think we need to commend Nigerians for staying the course to this stage of realizing these benefits,” he stated.

The Chairman of the Committee, Senator Sani Musa, said that the session was important as it gave stakeholders the opportunity to deliberate on pressing issues.

He said, “Today, we gather to deliberate on pressing matters related to the sale of crude oil to domestic refineries in Nigeria in naira, its implications on the approved Medium-Term Expenditure Framework and Fiscal Strategy Paper for 2024-2026, and what we should expect for 2025-2027.”

The committee reaffirmed the need for accountability in the NNPC, stating, “Additionally, we will examine shortfalls in NNPCL revenue remittances, focusing on key areas such as foreign and domestic excess crude accounts, the signature bonus accounts, NNPCL cash call accounts, and any outstanding or remitted revenue linked to under-recoveries.”

“This meeting underscores our commitment to transparency, accountability, and responsible management of our national resources.”

Musa concluded that with relevant collaboration, solutions can be identified.

He stated, “I am confident that with the collaboration of the Ministry of Finance under the able leadership of the Coordinating Minister of the Economy, the Office of the Accountant General of the Federation, the Central Bank of Nigeria, the Revenue Mobilization and Fiscal Commission, and other critical stakeholders present here, we will identify solutions and ensure that due processes are upheld for the benefit of our economy and the Nigerian people.”

Continue Reading

Economy

President Tinubu Approves Concrete Redesign for Abuja-Kaduna Road Amid Contract Termination

Published

on

lekki

The Federal Government has announced plans to address the difficulties faced by road users on the Abuja-Kaduna-Zaria-Kano road with the redesign of the dual carriageway.

This announcement was made by the Minister of Works, David Umahi via a statement on Wednesday.

The Ministry revealed that the 127 kilometers project has been approved by President Bola Tinubu.

This development comes two days after the Ministry of Works announced the termination of its contract with Julius Berger for the Section I (Abuja-Kaduna) of the Abuja-Kaduna-Zaria-Kano Dual Carriageway project in FCT, Kaduna, and Kano States.

Investors King understands that the contract for the rehabilitation of the road was awarded to Messrs Julius Berger (Nig.) Plc on December 20, 2017.

The project, initially valued at N155.7 billion, with a 36-month completion period was further categorized into three sections.

However, only Section II (Kaduna-Zaria) has been completed and partially handed over.

Section III (Zaria-Kano) is partially finished while Section I remains in a severely deteriorated state.

A statement from the Ministry explained that the decision to terminate the contract with Berger was based on non-compliance with reviewed cost, scope, and terms, stoppage of work, and refusal to remobilise to site.

The ministry on Wednesday, November 6, confirmed that Section I has been redesigned and re-scoped.

The statement reads, “The President, His Excellency, Bola Ahmed Tinubu, GCFR has approved that the remaining 127 kilometres of the Rehabilitation of Abuja – Kaduna – Zaria – Kano Dual Carriageway, Section I (Abuja – Kaduna) be redesigned using continuously reinforced concrete pavement (CRCP) instead of the present asphaltic one.”  

“The contract, divided into three (3) sections, was awarded to Messrs Julius Berger (Nig.) PLC on 20th December 2017 at an initial sum of N155, 748,178,425.50 billion (one hundred and fifty-five billion, seven hundred and forty-eight million, one hundred and seventy-eight thousand, four hundred and twenty-five naira, fifty kobo) with a completion period of thirty-six (36) months.” 

Continue Reading

Economy

Tax Expert Warns Tinubu: VAT, PAYE Hikes Will Deepen Hardship for Nigerians

Published

on

Company Income Tax (CIT) - Investors King

Due to Nigeria’s economic situation, tax expert Adebisi Oderinde has urged President Bola Ahmed Tinubu to halt plans to increase the VAT and Pay-As-You-Earn (PAYE) tax rates.

Oderinde, who is also the CEO of AOC-Adebisi Oderinde & Co, made the statement during the inauguration of the company’s Head Office in the Kara area of Ogun State.

He said the country’s economic conditions are challenging and particularly unfavorable for SMEs and warned that implementing tax reform could destabilize many small businesses as inflation has already eroded purchasing power in Nigeria.

With over 28 years of experience as a tax consultant, Oderinde noted that new tax reforms would likely worsen hardship across the country.

“My advice is to make hay while the sun shines, as the journey of a thousand miles begins with a single step, and slow and steady wins the race. The country is hard! As a tax practitioner, I continue to pray for our President, but he must heed the advice of elders, especially when it concerns tax reform,” he said.

“This is not the right time to reform any tax, nor to adjust rates. Nigerians’ purchasing power is very low. While some may think of VAT reform as beneficial, it would have a negative impact, especially on Lagos State. One part of the reform aims to cancel the consumption tax, which would hit Lagos hard, as the state earns more from consumption tax than any other state in the federation,” he added.

Oderinde further advised northern Nigeria not to support the proposed policy, warning it could disproportionately affect the region.

“They also want to increase PAYE, and recent data from the NBS in 2023 shows that the total IGR from the 36 states plus the FCT is about N2.4tn, with PAYE accounting for about 63%. If PAYE is raised, it will impact many states significantly. Instead of focusing on VAT, the northern states should consider that an increase in PAYE would affect them even more than VAT,” he explained.

Continue Reading

Trending