|2017 Budget Benchmark (Credit: yourbudgit.com)|
The budget benchmark is highly optimistic. The price of crude oil is on the increase and is expected to remain that way all through 2017 due to recent OPEC's resolution. However, the level of oil production is unlikely to remain at 2.2 million barrels/day largely due to the Niger delta militancy situation.
The inflation and GDP growth are way off the mark. Inflation as at december, 2016 was 18.6% and with recession biting hard, it is unlikely that inflation rate will reduce in 2017. Nigeria experienced negative GDP growth rate for 3 consecutive quarters in 2016. A GDP growth rate of 2.5 percent is highly optimistic.
Of the 7.3 trillion Naira proposed for 2017, about 2.24 trillion Naira representing 30.69 of the entire budget was earmaked for Capital expenditure while the rest goes into recurrent expenditure and debt servicing. The government expect to fund the budget from oil and non oil revenue as shown below
|2017 Revenue Projection (credit: yourbudgit.com)|
|2017 Borrowing Plan (credit: yourbudgit.com)|
The budget deficit (32.34%) is greater than the capital expenditure budget (30.69%). So, it wouldn't be wrong to say that the federal government is planning to borrow for capital expenditure in 2017.
So, there you have it. An overview of the proposed 2017 budget.