By Simon Ateba/Lagos
The 6.06 trillion naira 2016 budget presented by President Muhammadu Buhari last year was not met mainly because of instability in the oil-rich Niger Delta region, Nigeria’s Minister of Budget and National Planning, Senator Udo Udoma said on Monday.
The government had projected for instance that between January and September 2016, it would generate at least 2.8 trillion from oil and other revenue sources, but it only generated 2.2 trillion naira, said Mr. Udoma who was presenting the 2017 budget details in Abuja.
The Federal Government had also budgeted about N1.8 trillion for capital projects in 2016 but only N753.6 billion (half of what was budgeted) was released as at October this year.
The Minister blamed it all on low oil production in the Niger Delta region where a new group of militants emerged early in the year and began blowing oil and gas installations, disrupting output.
At a time, daily oil production crashed to 1.4 million barrels.
In presenting the 2016 budget last year, President Muhammadu Buhari had projected that daily oil production would be 2.2 million barrels while oil would sell for at least 38 dollars per barrel. He had also estimated that the exchange rate would be 197 naira per dollar.
But things did not happen as the President had hoped. Although oil was slightly higher than the projected price in the latter part of the year, the activities by the Niger Delta Avengers crumbled production to a two-decade low and affected revenues, he said.
Worse, the naira completely collapsed and other revenue sources that are closely linked to the exchange rate were greatly affected.
For instance, the government had projected that it would generate 1.1 trillion naira from independent revenue sources, but only 0.2 trillion naira were generated.
With the bad exchange rate, fewer things came into Nigeria and this affected revenues generated by the Customs.
There, the government had projected that it was going to realise 0.3 trillion naira. In the end, it only made 0.2 trillion naira.
The projected non-oil tax receipts for the first to third quarter of 2016 was N0.8 trillion but only N0.5 trillion was realised, the Minister said.
He said President Muhammadu Buhari has put in place a committee that would devise innovative and creative ways to raise additional revenues from oil and other sectors. That report, he added, would be ready in time for the National Assembly to look into before considering the budget in 2017.
“We must maximise the resources we can generate from the oil and gas sector. We cannot determine the price of crude oil, but we can engage more extensively with the communities and people of the Niger Delta to minimise disruptions to oil production,” he said.
President Buhari last week presented the 2017 budget and projected that Nigeria would generate 4.94 trillion naira with oil generating almost 2 trillion naira of that sum provided production goes back to 2.2 million barrels a day and oil sells for about 42 dollars on the international market.