Issues arising on 2018 Nigeria budget

President Muhammadu Buhari presented the 2018 Budget estimates to a joint session of the Senate and the House of Representatives last week. The N8.612 trillion budget is N1.7trn or 16 percent higher than the N7.44trn appropriated in 2017.

The proposed budget has a deficit of N2.005trn. This is a drop from the N2.36trn in the 2017 Budget. Other key assumptions of the budget include crude oil benchmark of $45 per barrel, oil production estimate of 2.3 million barrels per day (mbpd), and an exchange rate of N305/$, the same as in the 2017 Budget. A breakdown of the budget shows that the Ministry of Power, Works and Housing was allocated N555.88bn, followed by Transport and Defence, with N263bn and N145bn, respectively. Others are Agriculture and Rural Development, N118.98bn, Water Resources, N96bn, Education, N61.73bn, and Health, N71bn.

Breakdown of the 2018 budget estimates:

Benchmark Oil Price – $45 per barrel

Oil Production: 2.3mbpd

Exchange rate: N305/$1

Inflation Rate: 12.4%

Expenditure Estimates

Recurrent Costs of N3.494 trillion

Debt Service of N2.014 trillion

Statutory Transfers of about N456 billion

Sinking Fund of N220 billion

Capital Expenditure of N2.428 trillion

Recurrent Expenditure

87 billion for Interior

01 billion for Education

43 billion for Defence

34 billion for Health

Capital Expenditure

Power, Works, and Housing: N555.88 billion

Transportation: N263.10 billion

Special Intervention Programmes: N150.00 billion

Defence: N145.00 billion

Agriculture and Rural Development N118.98 billion

Water Resources: N95.11 billion

Industry, Trade, and Investment: N82.92 billion

Interior: N63.26 billion

Education N61.73 billion

Universal Basic Education Commission: N109.06 billion

Health: N71.11 billion

Federal Capital Territory: N40.30 billion

Zonal Intervention Projects N100.00 billion

North East Intervention Fund N45.00 billion

Niger Delta Ministry: N53.89 billion

Niger Delta Develo pment Commission: N71.20 billion.

Nigeria’s education sector has again been allocated much lower than the 26 percent of national budget recommended by the United Nations.

The global organisation recommended the budgetary benchmark to enable nations adequately cater for rising education demands.

But in the proposal presented to the National Assembly on Tuesday, President Muhammadu Buhari allocated only 7.04% of the 8.6 trillion 2018 budget to the education.

The total sum allocated to the sector is N605.8 billion, with N435.1 billion for recurrent expenditure, N61.73 billion for capital expenditure and N109.06 billion for the Universal Basic Education Commission.

The allocation is lower than the 7.4 percent the government gave the education sector in the of N7.4 trillion 2017 budget.

The breakdown of the N550 billion allocated in 2017 was N398 billion for recurrent expenditure, N56 billion for capital expenditure and N95 billion to UBEC.

Although the N605 billion allocated to the sector this year is higher in naira terms than the N550 billion allocated in 2017, there is a decrease in percentage terms.

This decrease, apart from expanding the gap with respect to the UN recommendation, is also in spite of the government committing to increase spending on education following a strike from August 13 by the Academic Union of Universities, ASUU, that forced Nigerian universities to shut down until the strike was called off on September 18.

The university teachers were protesting poor funding of universities and the failure of government to implement an agreement it signed in 2009 with ASUU to improve facilities and enhance staff welfare at the institutions.

The Senior Staff Association of Nigerian Universities, SSANU, Non-Academic Staff Union of Universities, NASU and the National Association of Academic Technologists, NAAT, commenced a nationwide strike on September 11, although it was called off 10 days later.

To pacify the teachers and other workers, the government undertook to increase funding of the universities and to implement the 2009 agreement and others, which also increased the financial commitment of the government to the universities.