*Votes N305bn for fuel subsidy
*N4.04 trillion or 50.31% earmarked for recurrent expenditure
*N2.03 trillion or 22.98% earmarked for capital projects
*N492.36bn for statutory transfers
*N2.14 trillion for debt servicing
*N120 billion as sinking fund
*Technical committee to advise govt on minimum wage
By Deji Elumoye and Shola Oyeyipo in Abuja
President Muhammadu Buhari on Wednesday presented the 2019 budget estimate of N8.83 trillion to the National Assembly with N305 billion being earmarked for fuel subsidy during the fiscal year.
The President who presented the budget proposal to the 469 members of the National Assembly in a joint session at the House of Representatives Chamber said government will continue to subsidise fuel price so as to reduce the burden on the citizenry.
The session was however characterised by rowdiness as opposition lawmakers booed the President while lawmakers elected on the platform of the President’s party hailed him.
In his presentation, Buhari said, “we have allowed for N305 billion ($1 billion) for under-recovery by NNPC on PMS in 2019. We will continue working to bring it downwards so that such resources are freed up to meet the developmental needs of our people.
” Let me also take this opportunity to address and clarify the under-recoveries or subsidy on petrol. In a period of economic challenges where purchasing power is weak, we must reduce some of the burden on Nigerians.”
The President further attributed problem with subsidies in the past to abuse and corruption adding however that “today the government through the NNPC is the sole importer of PMS and therefore, the under-recovery is from the NNPC’s trading account. This means the possibility of some marketers falsifying claims is removed”.
The 2019 total budget estimate is N300 billion lower than the N9.1 billion being implemented for 2018 fiscal year.
According to Buhari, N4.04 trillion or 50.31 per cent is earmarked for recurrent expenditure and N2.03 trillion representing 22.98 per cent for capital projects.
Other estimates are N492.36 billion for statutory transfers, N2.14 trillion for debt servicing and provision of N120 billion as sinking fund.
He explained that the sinking fund would be used to “retire maturing bonds to local contractors”.
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.
Other benchmarks are real Gross Domestic Product (GDP) growth rate of 3.01 per cent and inflation rate of 9.98 per cent.
The total projected revenue, according to the president, is N6.97 trillion, which is three per cent lower than the 2018 estimate of N7.17 trillion.
Buhari said the expected income consisted of oil revenue projected at N3.73 trillion, and non-oil revenue estimated at N1.39 trillion.
“The estimate from non-oil revenue consists of N799.52 billion from company income tax; N229.34 billion from value added tax, and customs duties of N302.5 billion.We have reduced our expectations from independent revenue N624.58 billion.
“Other revenues expected in 2019 include various recoveries of N203.38 billion; N710 billion as proceeds from the restructuring of government equity in joint ventures, and other sundry incomes of N104.1 billion,” he said.
The president explained that the total N8.83 trillion proposed expenditure for 2019 included grants and donor funds amounting to N209.92 billion.
According to him, although the 2019 estimate was lower than the 2018 budget of N9.1 trillion, it was higher than the N8.6 trillion originally proposed by the executive to the National Assembly.
The budget deficit is projected to decrease to N1.86 trillion or 1.3 per cent of the GDP in 2019 from N1.95 trillion projected for 2018.
“This reduction is in line with our plan to progressively reduce deficit and borrowings over the medium term,” he said.
On sectoral allocation, the president said the Ministry of Interior would get N569.07billion, Defence (N435.62 billion), Education (N462.24 billion) and Health (N315.62 billion).
On new minimum wage, President Buhari revealed that a Technical Committee will be constituted to advise government on mode of funding workers’ wage increase.
His words: “I am committed to addressing the issue of a new minimum wage and I will be sending a bill to the National Assembly on this. However, in order to avoid a fiscal crisis for the Federal Government, as well as the States, it is important to devise ways to ensure that its implementation does not lead to an increase in the level of borrowing.
“I am accordingly setting up a High Powered Technical Committee to advise on ways of funding an increase in the minimum wage, and the attendant wage adjustments, without having to resort to additional borrowings.
“The work of this Technical Committee will be the basis of a Finance Bill which will be submitted to the National Assembly, alongside the Minimum Wage Bill. In addition, the Technical Committee will recommend modalities for the implementation of the new minimum wage in such a manner as to minimise its inflationary impact, as well as ensure that its introduction does not lead to job losses”.