Nigerians have received the 2007 budget presented by President Olusegun Obasanjo with reasonably positive feelings. The budget proposal presented to the joint session of the National Assembly amounted to N2.3 trillion for the 2007 fiscal year with a benchmark of $40 per barrel of crude oil. This is against the N1.9 trillion and $35 per barrel benchmark for 2006.
The budget is based on N1.8tn estimated revenue of the Federal Government, made up of N1.7tn share of the Federation Account and N100bn of independent revenue. The total revenue accruable to the Federation Account is projected at N4.3tn, with oil revenue accounting for N3.2tn.The proposed expenditure figure of N2.3tn represents 21 per cent increase over the N1.9tn authorised by the 2006 Appropriation Act.
Highlights of the budget include allocation to security of N213 billion while the Ministry of Works followed with N191 billion. Others are education, N186 billion; health, N112 billion; Millennium Development Goal (MDG), N110 billion; power, N105 billion; water, N95 billion; agriculture, N38 billion and pension, N80 billion.
The President said the stock of domestic public debt is expected to rise to about N1.8 billion at the end of the year compared to N1.5 billion as at December 2005 and in year 2007, Federal Government would borrow N200 billion from the capital market instead of resorting to the excess crude to finance it. He disclosed that the nation still has an external debt portfolio of about $4.8 billion and that N61 billion has been proposed for the servicing of the debt in 2007.
Other features of the budget presented by the President included a total revenue projection from the sale of crude oil of about N1.6 trillion, N1.1 trillion income from non-oil revenue sources made up of company's income tax, Value Added Tax and Customs and Excise duty and independent revenue accruing from operating surpluses and dividends on commercial enterprises amounting to N86 billion.
In addition to the N55 billion allocated to the Independent National Electoral Commission (INEC) in the 2006 budget, the President said that N27 billion has been proposed in 2007 for the commission to ensure adequate preparation for the general elections next year.
He put the total capital expenditure for the year at N781 billion representing an increase of 38.1 per cent over that of 2006. Payroll and overheads for the year are estimated at N652 billion and N405 billion. Both items, which constitute the recurrent expenditure, represent 57 per cent of the total budget while capital accounts for the remaining 43 per cent.
The budget also provided N11 billion for the dredging of the River Niger from Lokoja to Warri, N36 billion for the construction of the east-west
road, N21 billion for the construction of the Kano-Maiduguri Road, N17 billion for the completion of the Gurara water project, N80 billion for pension under Pay-As-You-Go system and N50 billion for the acceleration of the ongoing public service reforms.
The government expects stability in the exchange and interest rates because of strengthened public expenditure management, less inflationary tendencies and allocation of funds to the Central Bank for liquidity management.