President Muhammadu Buhari says the economy has been negatively affected by the poor revenue collection by the Federal Inland Revenue and the Nigerian Customs Service in 2016.
The president said this while presenting the 2017 Appropriation Bill before the joint session of the National Assembly on Wednesday in Abuja.
He said the significant shortfalls in projected revenue were due to the combination of relatively low oil prices in the first quarter of 2016, and disruptions in crude oil production.
He said as at September 30, the aggregate revenue inflow was N2.2tn or 25 per cent less than the projections.
He added that N3.6tn had been spent by the same date on both recurrent and capital expenditure.
He said, “In 2016, the budget was prepared on the principles of zero based budgeting to ensure our resources were prudently managed and utilised solely for the public good.
“This method was a clear departure from the previous incremental budgeting method. We have adopted the same principles in the 2017 Budget.
“You may recall that the 2016 Budget was predicated on a benchmark oil price of US$38 per barrel, oil production of 2.2 million barrels per day and an exchange rate of N197 to the US dollar.
“On the basis of these assumptions, aggregate revenue was projected at N3.86tn while the expenditure outlay was estimated at N6.06tn.
“The deficit of N2.2tn, which was about 2.14 per cent of GDP was expected to be mainly financed through borrowing.”
However, the president said in spite of the challenges, the federal government met both its debt service obligations and personnel costs.
He added that overhead costs were largely covered.
“Although capital expenditure suffered as a result of project formulation delays and revenue shortfalls, in the five months since the 2016 Budget was passed, the amount of N753.6 billion has been released for capital expenditure as at the end of October 2016.
“It is important to note that this is one of the highest capital releases recorded in the nation’s recent history. In fact, it exceeds the aggregate capital expenditure budget for 2015.
“Consequently, work has resumed on construction of new terminals at the country’s four major airports; numerous major road projects; key power transmission projects; and the completion of the Kaduna-Abuja railway.
“We remain resolute in our commitment to the security of life and property nationwide.
“The courageous efforts and sacrifices of our heroes in the armed forces and paramilitary units are clear for all to see. The gradual return to normality in the North East is a good example of the results.
“Our spending in the 2016 fiscal year focused on ensuring these gallant men and women are properly equipped and supported.
“In June 2016, a conditional Budget Support Programme was introduced, which offered State Governments N566 billion to address their funding shortfalls.’’
On the 2017 Budget priorities, the president said, the budget tagged “Budget of recovery and Growth’’, will be a continuation of 2016 plans.
He added that there would be only a little adjustment to reflect new additions made in the Economic Recovery and Growth Plan.