Gabriel Omoh
3 December 2008
Lagos — PRESIDENT Umaru Yar' Adua, yesterday, presented a deficit budget with a total expenditure of N2.87 trillion on an expected federal revenue forecast of N1.778 trillion including Independent Revenue of N306 billion leaving a financing gap of N1.09 trillion or 38 per cent of the total budget.
According to the President, "The fiscal balance in the proposed 2009 budget is a deficit of N1.09 trillion or 3.95 per cent of GDP, based on our assumed benchmark oil price of $45/barrel and forecast production of 2.292mbpd.
BUDGET 2009 PRESENTATION: President Umaru Yar'Adua at the presentation of the Budget 2009 to the National Assembly, in Abuja yesterday. Photo: Gbemiga Olamikan.
The deficit is to be financed by outstanding signature bonuses, proceeds of ongoing privatisation, the recall of $200 million from the Nigerian Trust Fund of the African Development Bank, any unspent balances from the 2008 Budget, domestic borrowing and a Naira-denominated international bond issue of $500 million.
The latter bond issue is primarily for the development of a benchmark for the pricing of local and foreign currency denominated sovereign debt instruments."
A breakdown of the budget proposal showed that N140.7 billion is for Statutory Transfers, N283.6 billion for Debt Service, N1.649 trillion for Recurrent (Non-Debt) Expenditure and N796.7 billion for Capital Expenditure.
According to the President, the Federal Government will in 2009 execute five key projects that will move the economy towards achieving the seven-point agenda of the government. Delivering the budget speech to the joint sitting of the National Assembly, the President said: "The 2009 Budget is predicated on certain key assumptions that take a realistic fiscal outlook for 2009.
These include: Oil production of 2.292mbpd, benchmark oil price of $45/barrel; Joint Venture cash calls of $5billion; GDP growth rate of 8.9 per cent; Inflation rate of 8.2 per cent.
According tohim, "On the basis of these assumptions, taking into account the revenue sharing formula, the total federally collectable revenue is projected at N5.131 trillion, which includes oil revenues of N2.9405 trillion and non-oil revenues of N1.973 trillion as well as other non-Federation Account items such as grants and special levies amounting to N217.5 billion. The total Revenue for the Federal Government Budget is forecast at N1.778 trillion, including Independent Revenue of N306 billion."
He told members of the National Assembly that "the aggregate expenditure for 2009 is N2.87 trillion, comprising N140.7 billion for Statutory Transfers, N283.6 billion for Debt Service, N1.649 trillion for Recurrent (Non-Debt) Expenditure and N796.7 billion for Capital Expenditure."
According to him, "This aggregate expenditure represents a 4.45 per cent increase over the N2.748 trillion initially appropriated in 2008 and an 8.42 per cent increase over the 2008 Amended Budget's level of expenditure of N2.647 trillion. More crucially, the capital vote of N796.7 billion is significantly higher than the actual capital expenditure of N491 billion in 2007.
7 key projects for 2009
He said seven key projects would be executed in 2009 in power, petroleum, roads, transport, health, agriculture and Niger Delta.
Power
The key projects that will be funded by the 2009 Budget in the power sector include the Mambilla Hydro-electric power generation project for which N3.5 billion has been voted, N21.5 billion vote for other generation projects (including N6.5 billion for the completion of the Niger Delta Power Holding Company's NIPP projects), N32 billion for Transmission projects, and N19.25 billion for Distribution projects;
Petroleum
In Petroleum Resources, the President said N903.9 million had been voted for the Trans-Sahara Gas Pipeline, N6.7 billion for the Calabar-Umuahia-Ajaokuta Gas Pipeline, N10.3 billion for the Ajaokuta-Abuja-Kano pipeline and N1.1 billion for the Gas Supply Pipeline to PHCN Delta IV.
Roads, bridges
According to him, N10.7 billion has been voted for Access Roads to six NNPC refineries and ports, N56.86 billion for highways construction and rehabilitation, N4.3 billion for the construction of the 2nd River Niger Bridge at Onitsha and N3.6 billion for the Guto/Bagana Bridge across the River Benue (both bridges are being constructed through PPP arrangements) and provisions for several other Presidential Initiative and Priority road projects.
Transport
In the transport sector, "N12.4 billion has been voted for the completion of the Ajaokuta-Warri line to the Delta Steel Jetty; N8.3 billion for the modernisation of locomotives, coaches and wagons, rehabilitation works and procurement of railway equipment, and N8.4 billion for the dredging of the Lower River Niger.
In the health sector, set aside is N6.5 billion for HIV/AIDS, N3 billion for Midwifery Services Scheme, N7.7 billion for maternal and children's health, and N6 billion for polio eradication.
Agriculture
For agriculture and water resources, the sum of N4.6 billion has been voted for the development of livestock production infrastructure, N15 billion for the supply of fertiliser, N6.5 billion for tractor service PPP schemes, N9.2 billion for the construction and rehabilitation of dams, and N11.6 billion for water supply and sanitation.
On the Niger Delta, the President said: "The new ministry will invest N28.4 billion on the East-West Road to improve accessibility to the region; N92.8 million on projects to improve and restore the environment and N18.6 billion on other projects, particularly the establishment of two sophisticated skills acquisition centres to help the youths from the region acquire practical skills relevant to the energy and petrochemicals industry."
Security
In specific areas such as security, the President said "the Police are investing N5.738 billion in a new initiative in enhancing security and community policing in seven cities across the nation, namely Abuja, Lagos, Kano, Ibadan, Port Harcourt, Maiduguri and Onitsha.
The Nigeria Police Force is committed to reducing crime by 40 per cent in these seven cities over the next year. The Interior Ministry is investing N1.8 billion in prison infrastructure rehabilitation to improve the security of the prisons and provide better facilities for reorienting convicted felons for rehabilitation into society.
"The Ministry of Works proposes in 2009 to complete the construction and rehabilitation of 3,293km length of roads. Under the FERMA programme, 10,676km of federal roads will be kept in motorable condition under the Retainership Programme, and 20,000km of roads will undergo emergency repair work. The Zonal Intervention Roads project will cover a total of about 2,400kms of roads. This Administration is also committed to accelerating the enhancement of road works by maintaining
10,000km of roads every year for the next three years.
On power, he said: "We are increasing investment in power generation by enhancing NNPC's ability to provide 1.2 billion SCF of gas to the domestic market, so as to ensure that this Administration can deliver 6,000 MW of power by the end of 2009.
"Notwithstanding the global downturn, Nigeria's economic growth remains on track, buoyed by the strong performance of the non-oil sector. Growth in the non-oil sector, particularly in agriculture, remains robust, at an estimated 9 per cent. The oil sector's GDP contracted in 2008 by about 2.5 per cent due to reduced production levels precipitated by the ongoing situation in the Niger Delta. Overall, real GDP growth for 2009 is estimated to be about 7.5% which compares favourably with the 6.6 per cent recorded so far in 2008.
"This out turn lays the foundation for sustainable double-digit growth over the medium-term horizon, as we increase investments in critical infrastructure, implement sectoral reforms, maintain macroeconomic stability and ensure lasting peace, security and development, not only in the Niger Delta, but across the nation, as a whole.
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