BUDGET OF CONSOLIDATION
His Excellency, President Muhammadu Buhari
President, Federal Republic of Nigeria At the Joint Session of the National Assembly, Abuja Tuesday, 7TH of November 2017
PROTOCOLS
1. I am here to present 2018 Budget Proposals. Before presenting the Budget, let me thank all of you Distinguished and Honourable Members of the National Assembly, and indeed all Nigerians, for your support and prayers for my full recovery while I was on medical vacation.
2. I am very pleased to address this Joint Session of the National Assembly, on the revenue and expenditure estimates, and related matters, of the Federal Government of Nigeria for the 2018 fiscal year.
3. The 2018 Budget will consolidate on the achievements of previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020.
OVERVIEW OF ECONOMIC DEVELOPMENTS IN 2017
4. 2017, so far, has been a year of uncertainty on many fronts across the world. Whether it is Brexit, the crisis in the Korean Peninsular, or indeed, the political uncertainty in key oil producing nations of the Middle East and South America, we can all agree that these developments have in one way or another impacted Nigeria’s economic fortunes.
5. By all accounts, 2018 is expected to be a year of better outcomes. The tepid economic recovery is expected to pick up pace and the global political terrain is expected to stabilize. The International Monetary Fund (IMF) is anticipating global GDP growth of 3.7 percent in 2018. Emerging markets and developing economies are expected to lead with GDP growth of 4.9 percent, while advanced economies are projected to grow at a slower rate of 2 percent.
6. Nigeria’s journey out of the recent recession was a revealing one. We heard many opinions from within and outside Nigeria on how best to address our economic woes. We listened carefully and studied these proposals diligently. Our belief has always been that the quickest and easiest solution may not necessarily be the best solution for a nation as diverse as ours. We took our time to create a balanced and equitable response, keeping in mind that only tailored Nigerian solutions can fix Nigeria’s unique problems.
7. And from the recovery that we are seeing today, it is clear that we made the right decisions. Distinguished and Honourable Members of the National Assembly, I am now asking you to continue to support our economic policies in order to consolidate and sustain on the success achieved so far. We simply cannot go back.
8. In the non-oil sector, crop production has been one of the main contributors to non-oil growth, which rose to 0.45 percent in the second quarter of this year. This was primarily driven by our ongoing financial, capacity building and infrastructure development programs.
9. The Ministry of Agriculture and Rural Development, working with development partners and the private sector, have embarked on numerous capacity building projects. We have also completed over 33,000 Hectares of Irrigation Projects that have increased water availability in key food producing states. We shall continue to intensify our interventions through the Anchor Borrowers’ Programme and the Presidential Fertilizer Initiative to ensure that this momentum is sustained. We have also made provisions in the 2018 Budget to complete ongoing Irrigation Projects at Ada, in Enugu State; Lower Anambra, in Anambra State; and Gari, in Jigawa State. In 2017, many factories and projects in the food and agricultural sectors were commissioned in Kebbi, Nasarawa, Kaduna, Anambra, Edo, Jigawa, Rivers, Niger, Ogun and Ebonyi States, to mention a few. This is a clear statement that our economic diversification and inclusive growth ambitions are coming to fruition.
10. Significant progress has also been made in the Solid Minerals development sector. In Ondo State, for instance, work is ongoing to fully exploit the bitumen resources to meet the 600,000 MTs of asphalt imported per annum for roads and other construction projects. To consolidate on these efforts, we have also established a 30 billion Naira Solid Minerals Development Fund to support other minerals exploration activities across the country.
11. In the oil and gas sector, the relatively higher crude oil prices supported our economic recovery. Our mutually beneficial engagement with oil producing communities in the Niger Delta contributed immensely to the recovery in oil production experienced in recent months. We would like to thank the leadership and communities in the Niger-Delta for their continued support and to also reiterate our assurances that this Administration will continue to honour our commitments to them. We cannot afford to go back to those dark days of insecurity and vandalism. We all want a country that is safe, stable and secure for our families and communities. This means we must all come together to address any grievances through dialogue and peaceful engagement. Threats, intimidation or violence are never the answer.
12. We are working hard on the Ogoni Clean-up Project. During the year, we engaged 8 international and local companies proposing different technologies for the mandate. To enable us select the best and most suitable technology for the remediation work, we asked each company to conduct Demonstration Clean-up Exercises in the 4 Local Government Areas of Ogoni Land. These Demonstrations were recently concluded and the results are being studied by the Governing Council of the Ogoni Clean-up Project. Although the Project will be funded by the International Oil Companies, we have made provisions in the 2018 Budget for the costs of oversight and governance, to ensure effective implementation.
13. On the international front, I would like to thank our friends and partners in the Joint OPEC / Non-OPEC Ministerial Monitoring Committee (JMMC) who graciously granted Nigeria an exemption from the output cuts imposed on OPEC Member Countries in January 2017. This exemption, which was extended in September 2017, significantly helped during our most challenging time. We shall continue our positive engagement with other oil producing nations to ensure that the momentum generated is sustained.
14. Permit me, Mr. Senate President and Right Honourable Speaker, to state that despite the downturn in oil prices and our challenging economic circumstances, this Administration was able to invest an unprecedented sum of over 1.2 trillion Naira in capital projects through the 2016 Budget. This is the highest ever in the history of this country. This is a clear demonstration of our commitment to consolidate on our economic diversification reforms and lay a stronger foundation for future growth and development.
15. Our Sovereign Wealth Fund, which was established in 2011 with US$1 billion, did not receive additional investment for 4 years when oil prices were as high as US$120 per barrel. However, despite record low oil prices, this Administration was able to invest an additional US$500 million into the Fund. This further demonstrates that in our struggle to have a stable and secure nation today, we have not, and will not, lose sight of the need to lay a solid foundation for the future prosperity of successive generations.
16. We have asked the Sovereign Wealth Fund to look inward and invest locally. Some of the successes we are seeing today in the agricultural sector are driven by this new investment approach by the Nigeria Sovereign Investment Authority (NSIA). The NSIA also has a very strong pipeline of local investments that will support our inclusive and diversified economic growth plan.
17. Stability has been restored to the foreign exchange market due to the interventions by the Central Bank of Nigeria to improve access to liquidity, discourage currency speculation and increase net foreign exchange inflows. As at the 30th of October, 2017, our external reserves had increased to US$34bn. This stability has supported our efforts to provide the enabling environment and interventions needed to empower Micro, Small and Medium-Sized enterprises, investors, manufacturers and exporters, to sustain and in some cases, grow their operations. Indeed, by the second quarter of 2017, exports significantly outpaced imports, resulting in a trade surplus of 506.5 billion Naira.