Economy
Udoma To Give Budget Breakdown December 19
By Modupe Gbadeyanka
Minister of Budget and National Planning, Mr Udoma Udo Udoma, will on Monday, December 19, 2016, give a breakdown of the highlights of the 2017 budget estimates presented on Wednesday December 14, to the National Assembly by President Muhammadu Buhari.
This is contained in a statement released to the press by the Media Adviser to the Minister on December 14, 2016.
According to the statement, those expected at the briefing, which will be held at the Banquet Hall of the State House in Abuja, include media practitioners, Heads of Federal Government Ministries, Departments and Agencies, Representatives of States and Local Governments, Private Sector Operators and Associations, Captains of industry and Civil Society Organizations.
While presenting the broad estimates to the National Assembly on Wednesday, President Muhammadu Buhari said that the implementation of the 2017 budget will be based on government’s economic recovery and growth strategy.
The plan, which builds on the Strategic Implementation Plan for the 2016 budget, provides a clear road map of policy actions and steps designed to bring the economy out of recession and to a path of steady growth and prosperity.
According to the President “We continue to face the most challenging economic situation in the history of our Nation. Nearly every home and nearly every business in Nigeria is affected one way or the other. Yet I remain convinced that this is also a time of great opportunity.”
Adding, “We have reached a stage when the creativity, talents and resilience of the Nigerian people is being rewarded. Those courageous and patriotic men and women who believed in Nigeria are now seeing the benefits gradually come to fruition.
“I am talking about the farmers who today are experiencing bumper harvests, the manufacturers who substituted imported goods for local materials and the car assembly companies who today are expanding to meet higher demand.”
Vowing that his government will change the Nigerian economic focus from dependence on a single commodity and the habit of Nigerians depending on foreign goods, the President said government will increasingly grow and process local food, engage in local manufacturing and refining of petroleum products.
“We will buy ‘Made in Nigeria’ goods. We will encourage garment manufacturing and Nigerian designers, tailors and fashion retailers. We will patronize local entrepreneurs. We will promote the manufacturing powerhouses in Aba, Calabar, Kaduna, Kano, Lagos, Nnewi, Onitsha, and Ota. From light manufacturing to cement production and petrochemicals, our objective is to make Nigeria a new manufacturing hub.”
President Buhari explained that the implementation of the 2016 budget was hampered by the combination of relatively low oil prices in the first quarter of 2016, and disruptions in crude oil production which led to significant shortfalls in projected revenue. “This contributed to the economic slow-down that negatively affected revenue collections by the Federal Inland Revenue Service and the Nigerian Customs Service.”
Government’s priorities in 2017, according to him, will be a continuation of the 2016 plans but adjusted to reflect new additions made in the Economic Recovery and Growth Plan. “In order to restore growth, a key objective of the Federal Government will be to bring about stability and greater coherence between monetary, fiscal and trade policies while guaranteeing security for all.”
He said the 2017 budget is based on a benchmark crude oil price of $42.5 per barrel; an oil production estimate of 2.2 million barrels per day; and an average exchange rate of N305 to the US dollar.
Based on these assumptions, aggregate revenue available to fund the federal budget is N4.94 trillion. This is 28 percent higher than 2016 full year projections. Oil is projected to contribute N1.985 trillion of this amount.
Non-oil revenues, largely comprising Companies Income Tax, Value Added Tax, Customs and Excise duties, and Federation Account levies are estimated to contribute N1.373 trillion. We have set a more realistic projection of N807.57 billion for Independent Revenues, while we have projected receipts of N565.1 billion from various Recoveries. Other revenue sources, including mining, amount to N210.9billion.
With regard to expenditure, he said “we have proposed a budget size of N7.298trillion which is a nominal 20.4 percent increase over 2016 estimates. 30.7 percent of this expenditure will be capital in line with our determination to reflate and pull the economy out of recession as quickly as possible.”
This fiscal plan will result in a deficit of N2.36 trillion for 2017 which is about 2.18 percent of GDP. The deficit will be financed mainly by borrowing which is projected to be about N2.32 trillion. “Our intention is to source N1.067 trillion or about 46 percent of this borrowing from external sources while, N1.254 trillion will be borrowed from the domestic market’, he said.
By Aduragbemi Omiyale
The chief executive of the Nigerian Exchange (NGX) Limited, Mr Jude Chiemeka, has emphasised the importance of non-interest finance in the economy and the nation’s capital market.
Speaking at the 7th African International Conference on Islamic Finance (AICIF) in Lagos recently, he said non-interest finance drives sustainable economic transformation and enhances market inclusion.
According to him, this was why the stock exchange created a special board for the sub-market segment to attract ethical investors.
“At NGX, our Non-Interest Finance Board represents more than a platform, it embodies our commitment to unlocking ethical capital, diversifying investment opportunities, and driving sustainable development.
“By leveraging innovation and strategic partnerships, we are creating pathways for inclusive growth and positioning Nigeria at the forefront of Islamic finance in Africa,” Mr Chiemeka stated at the event organised by The Metropolitan Skills Limited in collaboration with the Securities and Exchange Commission (SEC).
Business Post reports that Nigeria’s non-interest capital market has recorded significant expansion in recent years, with sovereign Sukuk issuances at over N1.4 trillion for multiple projects nationwide.
It was gathered that the two-day AICIF attracted policymakers, regulators, development partners, and market participants, who explored policy reforms, product innovation, and strategies to unlock liquidity across Africa’s Islamic finance markets.
Also speaking, the chairman of NGX Group Plc, Mr Umaru Kwairanga, said NGX’s Non-Interest Finance Board has become a central platform for expanding access to Sharia-compliant financial instruments and attracting investors seeking transparency, inclusivity, and sustainability.
“Through the Non-Interest Finance Board, NGX is building a dedicated platform for Sukuk, Islamic collective investment schemes, and non-interest exchange-traded funds. Our goal is to broaden market participation while channelling capital towards productive sectors of the economy,” he said.
On his part, the Vice President of Nigeria, Mr Kashim Shettima, represented by the Special Adviser to the President on Economic Matters, Mr Tope Fasua, described Islamic finance as a credible mechanism for fostering equitable prosperity and sustainable development, urging broader adoption across African economies.
By Adedapo Adesanya
The Nigeria Employers’ Consultative Association (NECA) has backed the proposed 15 per cent fuel import tariff introduced by the President Bola Tinubu-led government.
According to NECA Director General, Mr Wale Smatt Oyerinde, the move will enhance local production of the commodity.
“We support the policy of a 15 per cent tariff on imported petroleum products — not on locally produced ones.
“If the 15 per cent tariff is the ‘punishment’ we must bear collectively for our recklessness in allowing our four refineries to collapse, then so be it,” he said when he was interviewed on Channels Television on Friday.
“Even developed nations like the US are introducing protectionist policies to protect their local industries. We don’t have much excuse not to do the same,” the NECA boss said.
Recall that President Tinubu had approved the 15 percent tariff increase in a letter sent to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, mandating its enforcement.
Critics have faulted the move, arguing it will lead to an increase in the landing cost of the product, with petrol and diesel expected to see further increment.
However, support for the programme has come from many quarters including energy businessman, Mr Femi Otedola, who backed move recently.
The NECA chief also believes the policy is a step in the right direction, adding that a similar actions should be extended to other areas.
“The president gave approval about two weeks ago, and the OPS has done its analysis. We’re also looking beyond petrol and diesel.
“To ramp up production in the manufacturing and real sectors, this kind of policy should extend there too. Why do we import things we can produce locally? It affects forex and other aspects of the economy,” Mr Oyerinde said.
“We’ve said that everything we can produce locally should attract import duties, provided we have made sufficient arrangements for local production to meet our needs. If we have to give businesses a one- or two-year moratorium to integrate backward, then fine, but let’s reduce the tendency to import,” he added.
By Adedapo Adesanya
Shell Nigeria Exploration and Production Company has given US-based Halliburton an integrated drilling contract to work on the oil major’s $2 billion shallow-water HI offshore gas project in Nigeria.
According to reports, the financial terms of the deal, awarded by Shell, were not disclosed.
Halliburton, based in Houston, said it will deploy remote operations and automated technologies for the work.
In October, Shell announced HI, located in Nigeria’s Oil Mining Licence (OML) 144. The UK major operates the HI project with a 40 per cent working interest alongside its local partner, Sunlink Energies and Resources, which owns a 60 per cent stake.
The project, when completed, will supply 350 million standard cubic feet (approximately 60 thousand barrels of oil equivalent) of gas per day at peak production to Nigeria LNG (NLNG; Shell interest 25.6 per cent), which produces and exports liquefied natural gas (LNG) to global markets.
According to a statement, production is expected to begin before the end of this decade.
At the time of the announcement, Mr Peter Costello, Shell’s Upstream President, said that “This Upstream project will help Shell grow our leading Integrated Gas portfolio, while supporting Nigeria’s plans to become a more significant player in the global LNG market.”
The gas will be sent to the delayed Train 7 of the Nigeria Liquefied Natural Gas (NLNG) plant, currently being built by a Saipem-led consortium.
The increase in feedstock to NLNG, via the Train 7 project that aims to expand the Bonny Island terminal’s production capacity, is in line with Shell’s plans to grow its global LNG volumes by an average of 4-5 per cent per year until 2030.
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