2018 Budget: Fiscal consolidation or toppling?
- Although the President’s speech at the budget presentation session beamed with optimism and on the surface is well aligned with the recovery plan, implementation while crucial remains inexact. The 2018 budget dubbed the ‘budget of consolidation’ proposes a 16% YoY expansion in aggregate spending to N8.6 trillion split into non-debt recurrent expenditure (41%), capital expenditure (28.2%), debt service (23.3%), sinking fund (2.6%) and statutory transfers (5.3%). Based on attribution, recurrent outlay continues to expand while the capital leg remains depressed. More daring is the FG’s ambitious revenue target which narrowed the deficit picture relative to prior year. Notably, the FG plans to raise N306 billion from sale of non-oil assets with a tilt towards higher external borrowing (50% apiece for domestic and external borrowing) which implies additional borrowing of $2.8 billion offshore in 2018.
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