Buhari proposes N8.83 trillion spending for 2019

19 Dec 2018
Financial Nigeria


The Federal Government has proposed recurrent expenditure of N4.04 trillion (50.31 percent of aggregate spending) and capital expenditure of N2.03 trillion (22.98 percent of total spending) in 2019.

Nigerian President Muhammadu Buhari

President Muhammadu Buhari, today, presented a proposed budget of N8.83 trillion for the 2019 fiscal year to a joint session of the National Assembly (NASS) in Abuja. The 2019 Appropriation Bill is N300 billion lower than the N9.1 trillion budget for 2018.

According to Buhari, the 2019 budget proposal is based on an oil production estimate of 2.3 million barrels per day and an exchange rate of N305 per dollar. Nigeria’s gross domestic product (GDP) is also expected to grow at 3.01 percent next year, while inflation rate is projected to drop to 9.98 percent.

The total projected revenue for the 2019 fiscal year is N6.97 trillion. Oil revenue is estimated to reach N3.73 trillion, while estimated non-oil revenue is N1.39 trillion. The non-oil revenue component consists of N799.52 billion from company income tax, N229.34 billion from value added tax, and customs duties are expected to generate N302.5 billion.

“We have reduced our expectations from independent revenue to N624.58 billion,” said Buhari. “N203.38 billion is expected from various recoveries, N710 billion as proceeds from the restructuring of government equity in joint ventures, and other sundry incomes of N104.1 billion.”

He added that the N8.83 trillion proposed expenditure for 2019 includes grants and donor funds, amounting to N209.92 billion.

Buhari explained that 50.31 percent (or N4.04 trillion) of the proposed budget for 2019 is earmarked for recurrent expenditure, while 22.98 percent (or N2.03 trillion) is the proposed spending for capital projects.

N2.14 trillion is allocated for debt servicing, N492.36 billion for statutory transfers and N120 billion for the sinking fund. “The sinking fund will be used to retire maturing bonds to local contractors,” the president explained.

The 2019 Appropriation Bill has a proposed deficit of N1.86 trillion, compared with the N1.95 trillion budget deficit in the 2018 budget.

“This reduction is in line with our plan to progressively reduce deficit and borrowings over the medium term,” the President said.

On sectoral allocation, the president said that the ministry of education will receive N462.24 billion; the ministry of interior, N569.07 trillion; and ministry of health will receive N315.62 billion in 2019.

During his presentation, the president said a bill on the new minimum wage will soon be sent to the NASS.

“It is important to devise ways to ensure that its implementation does not lead to an increase in the level of borrowing,” he said. “I am accordingly setting up a high-powered technical committee to advise on ways of funding an increase in the minimum wage and attendant wage adjustments without having to resort to additional borrowing.”

Buhari said that the committee will recommend modalities for the implementation of the new minimum wage.

Earlier in November, the Tripartite Committee on the Review of National Minimum Wage, led by Amal Pepple, a former Minister of Lands, Housing and Urban Development and Head of Service of the Federation, recommended N30, 000 as the new national minimum wage.

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