2018 Budget: Nigeria To Spend N2.1 Trillion For Debt Servicing, Plans Borrowing N1.643 Trillion

***FG Committed To Budget Implementation, Udoma

By CLEMENT NWOJI, Abuja

Nigeria is to spend at least N2.01 trillion in debt servicing out of the N9.12 trillion 2018 Appropriation bill signed into law by President Muhammadu Buhari on Wednesday.

According to statistics presented by the Minister of Budget and National Planing, Sen. Udoma Udo Udoma, while giving the breakdown of the 2018 Budget of consolidation  on Thursday, the amount allocated for debt servicing in 2018 is 21 percent of planned spending which is about the same as that provided in 2017 financial year.

Also, Senator Udoma, said the overall budget deficit of N1.950 trillion in 2018
represents 1.74 percent of Gross Domestic Products (GDP), adding that the projected deficit within threshold stipulated in the
Fiscal Responsibility Act (FRA) 2007.

He explained that the Budget deficit is to be financed mainly by borrowing N1.643
trillion.

The breakdown of the sources of borrowing include Domestic sources -N793 billion; Foreign sources –N849 billion N306 billion is expected from privatization
proceeds and N5 billion from sale of other government property to part finance the
deficit.

However, Senator Udoma said that the focus of the 2018 Budget is on development of infrastructures in power, Works and Housing; defence (security) and human development.

He said because of the importance attached to the development of critical infrastructure such as power, roads and housing, the combined total allocation to it constitute the highest  with N682.96 billion.

Udoma stressed that the government is committed to the implementation of the budget to ensure the consolidation of the gains achieved in 2016 and 2017 budgets.

Further breakdown of the budget showed that 2018 Federal government of Nigeria spending estimated at N9.12 trillion, exceeded that of Fiscal year 2017
projection by 23 percent; Provision to retire maturing bond to local contractors increased by seven percentfrom N177 billion in Fiscal Year 2017 to N190 billion in view of the ambitious plan to liquidate all contractor arrears of the FGN going back to several years; and Recurrent (non-debt) spending expected to rise by 17 percent, from N2.99 trillion in Fiscal Year 2017 to N3.51 trillion.

Others inside the Capital expenditure (excluding transfers) higher by 22 percent from N2.36 trillion in Fiscal Year 2017 to N2.87 trillion. The Capital spending is 31.5 percent of total FGN expenditure in 2018.

Earlier, the Director General of Budget office of the Federation, Ben Akabueze, explained that the budget breakdown was being done barely less than 24 hours after President Buhari had signed the budget into law because of the importance government attached to it.