The House of Representatives on on Tuesday commenced debate on the the general principle of 2017 Appropriation Act, with optimism that if implement to the latter, the budget will turn around economic fortune of the country.
Majority leader of the House, Hon. Femi Gbajabiamila, who moved for a motion for consideration of the bill for second reading applauded government’s resolve towards sustaining the 30 per cent of the annual budget to capital expenditure.
He also urged the House to revisit the Steve Oronsanye and Ahmed Joda reports on the merger of government agencies so as to reduce cost of governance and free up more money from capital expenditure at a minimum of 40 percent.
Gbajabiamila however enjoined government to inject funds into the Sovereign Wealth Fund and reactivation of the existing refineries and reduce overheads and recurrent expenditure.
According to the House Leader, key assumptions in the 2017 budget are: N4.94 trillion revenue (28% more than the 2016 projection) out of which N1.98 trillion is from oil sector and N1.37 trillion from non-oil sector; Oil Production pegged at 2.2 mbpd benchmark is $42.5 per barrel and N305/$1 exchange rate and N2.36 trillion (2.18 percent of the GDP).
While expressing concern over the impact of the downward turn in the Nigerian economy as well as other many oil producing countries, Gbajabiamila emphasised the need for massive investment into capital projects and payment of local debts to contractors in the bid to stimulate the ailing economy.
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“Prior to now, we ran successive budgets averaging N4 trillion at a time when this country was earning far more than it is now at $100 to $120 a barrel. The last two budgets of this administration have upped the ante to 6 to 7 trillion at a time when oil dropped to $30 and rose to $50. This is ambitious but ambition is the precursor to success. Prior to this time, capital allocation in our yearly budget was way below 30 percent and now this administration has raised it to over 30 percent. Before now, budget performance has been about 30 percent but somehow with little resources available, this administration hovers around the mid 50s range in terms of budget performance,” he said.
He added that; “we are not there yet, 50 per cent is not even good enough but it’s important to know where we were coming from to understand where we are and are going. That’s the story of this administration. How has this administration been able to achieve this. It has blocked leakages, aggressively pursued and broadened its tax base and collection, introduced reforms such as TSA, Zero based budgeting and eliminated ghost workers.”
The House Leader also expressed optimism that the substantial funds allocated to the power sector will bring succor to the manufacturing sector.
“We are recovering from an economic downturn and press forward towards economic growth. The global GDP growth rate is expected to rise to 3.4 percent in 2017 and is one of the reasons this budget is tagged budget of growth.
“The budget is in line with the new economic recovery and growth plan which will be launched very soon. This budget is designed to expand and strengthen public/private partnership, focus on and complete ongoing infrastructural projects such as roads, rail, power, ICT that can affect the economy positively.
“It ensures food security and expand the agriculture value chain. It establishes a Social Housing Fund for a more robust mortgage system. It protects and grows small and medium scale enterprises for the purposes of innovation, job and wealth creation,” he stated.
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