Where to make money in the 2017 Budget

Looking out for business opportunities, or just hunting for a job? Nigeria’s 2017 Budget promises opportunities for money-making, job creation and beating the recession

Where the money is in 2017Nigerians — government, business community and ordinary folk alike — set much store by the 2017 budget. Expectations are high that this year’s budget contains policy instruments needed to tackle and push back three harrowing quarters of economic recession.

The N7.2 trillion government plans to spend in the fiscal year is meaningfully christened ‘Budget of Economic Recovery and Growth’. It hopes to fulfill the promise of “change” that brought in the incumbent administration, by shifting emphasis from consumption–fuelling recurrent to production-focused capital expenditure.

A hard look at the provisions of the appropriation bill reveals plenty of opportunities for businesses, entrepreneurs and the teeming populace of job seekers. As can be expected, successful businessmen do not beat about the bush. They know what they want and go for it. They follow the money trail and make a pitch for their slice of the pie. The 2017 budget, through which the Federal Government of Nigeria desires to spend the country out of recession, is no exception. At N7.2trillion, the figure is huge and only those who identify the various routes, through which these monies will travel, stand any chance of benefiting from the impending spending spree.

A cursory look at the allocations for the various Ministries, Departments and Agencies (MDAs) shows clearly where there are opportunities for money-making for the business community. Mr Babatunde Fashola’s Power, Works and Housing Ministry has N564billion to share while General Abdulrahman Bello Dambazau’s Interior Ministry is smiling on top of N482.37billion. On his part, General Mansur Muhammed Dan-Ali, Minister of Defence is financially armed to shell-out N465 billion just as his Education counterpart, Mallam Adamu Adamu will be superintending over N448billion (apart from the jumbo budget of N92billion allocated as capital expenditure to the Universal Basic Education Commission (UBEC).

Another critical sector with a large chunk of the budget is Health as the ministry which is under Professor Isaac Adewole has a total budget of N305billion with a capital outlay of N51.3billion. Mr Chibuike Amaechi’s Ministry of Transportation is to  receive N276billion of which N262billion will be spent on capital projects while Chief Audu Ogbeh, Minister of Agriculture and Rural Development is to receive a total budget of N123.4billion of which capital outlay stands at N91.6billion. The Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah is getting N81 billion to leverage on trade facilitation to grow Nigeria’s economy just as his Mines and Steel Development counterpart, Dr Kayode Fayemi is to spend N23.27billion for the development of the nation’s mining sector.

To exploit land and water resources for food security and economic prosperity, the Ministry of Water Resources under Engr. Suleiman Adamu is getting N92 billion with a capital outlay of N85billion while his colleague in the Niger Delta Ministry,  Usani Uguru Usani is receiving an allocation of N35 billion.

The Ministry of Information and Ministry of Communications Technology are not left out of the imminent spending spree. Lai Mohammed, Minister of Information and Culture has an allocation of N49.3billion to spend on information management and the repositioning of the culture and tourism sector. On the other hand, his counterpart in the Ministry of Communications, Mr Adebayo Shittu has a total of N18billion budget to shell out.

Other agencies which received substantial allocations in the 2017 budget include the Small & Medium Enterprises Development Agency (SMEDAN) which has 2.75billion war chest and the Niger Delta Development Commission (NDDC) which gets N61.36billion. Indeed, virtually all the Ministries, Departments and Agencies associated with the Nigerian government in 2017 have billions to spend. There are billions everywhere but not for everyone. The likely beneficiaries of the billions would be hardworking members of the business community ready to take up the challenge of following the money trail in the 2017 Budget.

Multiplier effect

President Muhammadu Buhari is upbeat about the potential salutary effect of the budget on the economy. His words: “Specifically, we have maintained substantially higher allocations for infrastructural projects which will have a multiplier effect on productivity, employment and also, promote private sector investments.”

Senator Udoma Udo Udoma, Budget and Planning Minister, is on the same page with the president on the new direction. The budget, he says, will “expand partnership between the public and private sectors among other objectives”.

The budget actually tilts, more than ever before, towards capital than recurrent spending — a sign that, government is breaking away from the past when an inordinate amount of resources was used up for recurrent expenses. At 30 percent of total, capital expenditure will focus on infrastructural projects to the tune of N2.24 trillion. Non-debt recurrent spending will take up N2.98 trillion, while debt service mops up the balance of N1.66 trillion. On the whole, the budget is 20 percent bigger than last year’s, albeit nominally.

Good news for the private sector

This is good news for the country’s private sector which has shouted itself hoarse over the years about the wanton neglect of infrastructure and the productive sector.

Various  sections of the organized private sector in Nigeria are warming up to the budget. Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI) agrees that efforts to correct old imbalances between recurrent and capital expenditure make sense, but wants a review of policy on the foreign exchange market. For instance, he wants items critical to the manufacturing sector’s operations removed from the 41 restricted items.

The president, Manufacturers Association of Nigeria (MAN), Frank Udemba Jacobs believes that government’s emphasis on infrastructure bodes well for manufacturers in general, including Small and Medium Scale Enterprises (SMEs).

The Director-General, Nigeria Employers Consultative Association (NECA), Olusegun Oshinowo agrees that the increased spending on infrastructure will help business in general even though he would rather government allocated as much as 35 percent of the budget than the 30.7 percent earmarked. He is pleased with the decision to pay the huge debts owed local contractors, saying it would go a long way to boost economic recovery.

More important, hundreds of thousands of workers laid off, when contractors were forced to suspend various government projects are bracing themselves to return to work and sites around the country.

Power, Works and Housing ministry takes the cream

Not surprising, Power, Works and Housing Ministry gets a lion’s share of N564 billion. Of this sum, N529 billion is earmarked for capital projects in the three sub-sectors under the ambit of the ministry. Road rehabilitation and construction will gulp N238 billion, power provision takes N87 billion, while N52 billion goes into increasing the country’s housing stock.

Contractors handling road and housing projects as well as electrification projects will benefit hugely. Suppliers of electrical cables, transformers, electric poles, and building materials should watch out for opportunities to make money. For example, the people of Ikom in Cross River State will get a lease on life as N1billion has been set aside for the construction of the Ikom bridge while the dualisation of Ibadan road (Mayfair Junction) leading to the Lagere-Iremo-Enuwa-Ilesha bypass will gulp N669 million. N450 million has been earmarked for the Lagos ring road bridge abutment and approach ramp to Third Mainland Bridge while the ministry will expend N1.6 billion on fixing and constructing bridges destroyed as a result of insurgency.

The march towards improved power supply also received a boost as N950 million is set aside for construction work at the 3050mw Mambilla Hydropower Project.

The minister, Mr Fashola sees openings for professionals in the construction industry, namely; quantity surveyors, builders, engineers and architects. Says he: “Construction professionals such as registered quantity surveyors are specially invited to use their expertise to assist government in moving Nigeria out of the present economic recession through efficient resource management, proper project costing and value for money”. Aligning with the president and the Minister for Budget, Fashola assures that government is determined to exit the current economic recession through heavy spending and investment in capital projects and infrastructure such as roads, bridges and housing.

Closing the housing deficit

Estimates of Nigeria’s housing deficit could be anywhere between five and 20 million units depending on whom one listens to. Fashola reflects government’s thinking when he says “the housing sector presents an enormous opportunity for positively impacting the economy to promote not only growth, but also inclusion.”

The good news is that N52 billion is up for grabs and government, this time, will enable and allow the private sector to drive the process.

Using the Lagos Home model, which he pioneered as governor of Lagos State, the minister intends to start off with 40 blocks of 12 flats in each of the 36 states of the federation and the Federal Capital Territory (FCT). It does not take much thinking to see the economic activities to be generated in each of these projects, involving masons, carpenters, electricians, plumbers and many more artisans. The multiplier effect would shoot up when the private sector is galvanised to jump into the industry in response to incentives put in place by government through the financial markets.

Better schools, smarter facilities

A significant portion of the capital budget of N50 billion out of a total of N448 billion in the Education Sector is for construction of classrooms, office buildings and equipping libraries. Building contractors, suppliers of building materials such as cement, rods, gravel, sand, electrical fittings, polymer and wood will take advantage of this opportunity. For example, the Ministry of Education will construct prototype library in Gombe for N158million, Taraba will gulp N150million, while Osogbo and Calabar will cost N133million and N79million respectively. Completion of the National Library Headquarters project will cost N627million.

Other projects include construction of the administrative building for the University of Jos which is to gulp N52million; building and furnishing of male hostels at the Ahmadu Bello University, Zaria for N219million and the construction of campus road and drainages at the Federal Polytechnic, Bida, Niger State for N62million.

Consultants are not left out. They would benefit from commissioned reports, programme assessments and surveys. For example, about N256million has been set aside for the production of a quality assurance-based ‘state of education report’. Minister of Education, Mallam Adamu is upbeat that the allocation to education will enable government fast-track its three-year strategic education development plan aimed at propelling quality and affordable education at all levels.

Transport infrastructure for a productive economy

The ongoing rehabilitation and construction of new rail lines as well as airports across the country prompted the government to budget about N276billion for transportation of which N262billion will be spent on capital projects. The sum of N215billion will be spent on the construction/provision of railways; N14.4billion will go to the repair of airports and aerodromes, N2.7billion will be spent repairing air navigation equipment, N135million on procurement/illumination/flood lighting and N776million will be expended for the refurbishment of the Port Harcourt airport.

Several airports will also receive facelifts under the proposed budget. Completion of the control towers at Benin and Maiduguri airports, for example, would gulp N499million and N555million respectively while the tower at Akure and Ibadan airports will be completed with N432million and N512million respectively. This budget could be beneficial to contractors handling rail projects, suppliers of construction materials, furnishing and electrical fittings. For example, air passengers will find the Murtala Mohammed International Airport, Lagos no longer hot and stuffy as N183million is voted to procure and install air conditioning system at the airport. Airlines will soon find the Enugu airport suitable for flight operation following the N743million budgeted to upgrade and expand the runway while the Aminu Kano International Airport will get a befitting car park with toilets as N20million has been voted for the project. The Margaret Ekpo International Airport in Calabar will get a facelift for N295million.

The Minister of State for Aviation, Senator Hadi Sirika says 98 per cent of the 2017 budget allocation to the Aviation sector will be used for ongoing projects in the airline industry. This, he says, will help to facilitate quality service delivery. According to him, emphasis will be focused on sustaining the infrastructural renewal at the airports by driving the remodelling projects to a logical conclusion.

Railroading into the 21st century

Efforts to fast-track the modernization of Nigeria’s railway system will receive further boost through the allocation of N213.14 billion as counterpart funding for the Lagos-Kano, Calabar-Lagos, Ajaokuta-Itakpe-Warri railway, and Kaduna-Abuja railway projects. These projects will generate over 250,000 direct and indirect jobs, to say nothing of the multiplier effects on the communities the rails run through. Dealers in hard wood (lumber) will make money supplying railway slippers for the new lines.

The Minister of Transportation, Mr  Amaechi  says government would welcome increased involvement of the private sector through public-private partnership (PPP) opportunities ranging from establishment of ship building yards, flat-bottom boats for waterways, ports fencing, modernisation of transportation systems, ship breaking yards, railway infrastructure and logistics.

 Back to the land — farmer’s step up

In line with its promise to diversify the economy and the need to ensure food security, the government through the proposed 2017 budget is walking the back to the land talk with a total budget of N123.4 billion with a capital outlay of N91.6 billion. To reduce importation of food items, the administration plans to develop capacity in many crops: Wheat production will be boosted with N2.6 billion support, Sorghum, N1.1billion, Rice N2.05 billion, Cocoa N1.8 billion, Soya Beans N975 million, Fisheries N1.55 billion, Cassava N1.8 billion, Cashew N1.25 billion, Cotton N1.6billion, oil palm N826 million, and yam N640 million. The government is also providing N2.06 billion for veterinary and pest control. Farmers and agro-allied products dealers should be pleased and prepared to take advantage of the incentives. For example, N150million will be spent on providing fertiliser to rice farmers in Kebbi south senatorial district while it will expend N9million training poultry farmers in Arochukwu, Abia State. The Ministry of Agriculture will also spend N79.6 million fencing the Agriculture Research and Management Institute in Ilorin, Kwara State. N5.9million will go for training farmers on exportation of agric produce in Okengwe, Kogi State.

The huge sum allocated to agriculture in the 2017 budget will complement the existing efforts by the Federal Ministry of Agriculture and Central Bank of Nigeria (CBN) to boost agricultural productivity through increased intervention funding at single digit interest rate under the Anchor Borrowers’ Programme (ABP), Commercial Agricultural Credit Scheme and the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending. Farmers are in for the good time. Interestingly, Ogbeh, Minister of Agriculture and Rural Development assures that his ministry would ensure that only genuine farmers access government guaranteed facilities and incentives to boost food production.

Blending health and wealth

The provision of N213 million for the rehabilitation of six federal medical centres in Keffi, Lokoja, Owerri, Asaba, Abeokuta and Gusau is causing quite a stir among medical equipment suppliers. Moreover, they are jostling for the opportunity to benefit from the N15.6 million earmarked for the supply of dental chairs in federal medical centres in these centres as well as others around the country.

Such specific and targeted expenditure are helping businesses make preparations and investments necessary for survival in the increasingly competitive economic space. In sum, a total of N51.3 billion will go into similar identifiable procurements and projects out of the N305 billion Health Ministry budget.

About N3billion will be expended on revitalization of about 1,000 primary health centres across the country while N13.5billion will be spent on purchasing medical equipment. N200million will be expended on procuring equipment for microbiology laboratories while N300million will be used for the purchase of research equipment. N115million will be for procurement of anti-snake venom while N11million would be expended for logistics.

Security still on front burner

Security remains priority of government, even as the war on terrorism in the North-East gradually winds down. Of the proposed defence budget of N465billion, N140billion will be dedicated to capital projects. About N2.2billion will be spent to rehabilitate barracks across the country, N500million to buy security equipment, N450million to procure defence equipment, and N2.3billion to provide electricity. Added to these, N949million will be used for the provision of infrastructure, and N450million will be for the establishment of a military/industrial complex. Shop owners who were previously evicted from Giwa Barracks in Maiduguri will get N589million as compensation while N2.5billion will go for kitting Nigerian Army personnel. The Army will spend N5.2billion for construction/provision of barracks, while the Navy and Air Force will do the same with N1billion and N1.050billion respectively. For example, N139.6million will be used for the construction of 2.2km road culvert, drainage, toilet, car park and spectator stand at Army shooting range, Shittu Alao Barracks, Keffi while N640million will go for the rehabilitation of the headquarters of TRADOC Minna office complex, Niger State. Abandoned barracks project will be completed with the sum of N419million while N35million will be spent on the rehabilitation of Kaduna and Lagos military cemetery.

Cleaning and fumigation services to defence headquarters will consume N29million, an indication that there is room for all manner of professionals to benefit from the 2017 budget.

Water, water everywhere

The Ministry of Water Resources has a total proposed budget of N92billion with a capital outlay of N85billion. The government has indicated its interest to improve irrigation-based farming as well as provide adequate safe drinking water through the development of river basins. For example, Anambra/Imo River Basin Development Authority (RBDA) has a capital budget of N2.6billion while Cross River RBDA and Lower Niger RBDA have capital budgets of N4.5billion and N4.9billion respectively. Engr. Adamu, Minister of Water Resources says the country’s River Basin Development Authorities were being re-energised to support government’s resolve to exploit land and water resources for food security and economic prosperity.

The ministry also intends to expend N2.02billion on the repair and rehabilitation of water facilities while N8.5billion will be spent on the construction/provision of agriculture facilities such as irrigation facilities. For example, N138million has been voted for the construction of an earth dam in Otukpo, Benue State while Barkin-Ladi irrigation project will gulp N184million. Ahmadu Bello University water supply scheme will guzzle N204million. The phase 1 and 2 Zobe water supply project in Dutsin-Ma Local Government Area of Katsina is expected to use-up N3.2billion while N1billion is voted for the construction of a dam embankment at Kashimbilla dam in Takum Local Government Area of Taraba State.

Suppliers of industrial and agro chemicals such as water purifiers, water pumps, and pipes among others should watch out for opportunities in the ministry’s budget.

Moving solid minerals from potential to reality

In line with the diversification plan of the Buhari administration, the country’s neglected solid mineral resources is awarded a total budget of N23.27billion with capital expenditure at N12.89billion. The ministry intends to step up surveillance of mines as well as carry out assessment with a view to having the right information to lure foreign investors. It plans to spend N110million surveying abandoned mine sites, N528million on purchase of field vehicles, and N687million on buying surveying equipment. Government also intends to expand N178million on the reclamation of abandoned mine sites, N657million on core drilling of Mambilla Plateau, N168million on media campaign/documentary on mineral investment opportunities, N235million for technical capacity building, and N295million on IT automation, among others.

While government hopes to curb artisanal mining, the liberalization of the sector and fresh incentives for big time operation is already attracting the attention of investors, local and foreign. Kayode Fayemi, Minister of Mines and Steel Development says his ministry intends to collaborate with the private sector to effectively utilize much of the funds in the budget to make the Nigerian mining sector more competitive in global mining space.

‘Green’ Development

Decimation of the environment due to climate change, and which has resulted in desertification; pollution and erosion need to be reined in, in line with the recent global efforts to mitigate the impact of climate change. To this end, the Ministry of Environment will expend N1.4billion on erosion and flood control while also shelling out N878million on tree planting. Suppliers of seedlings, and road/building contractors could take advantage of this budget. For example, N45million will be used for the restoration of degraded areas of the Kainji National Park in Niger State while N35million will be expended for the same purpose at the Oyo National Park. N101million is budgeted for erosion control and channelization works at Nri Agukwu, Anaocha South Local Government, Anambra State. Dilapidated barracks of forest rangers in Soro, Oloka, Abaja, Alaguntan, Gbogoro and Ogundiran all in Oyo State will get a facelift for N20million.

No more neglect of the Niger Delta

The Ministry of Niger Delta voted a total of N35billion of which N33.6billion representing 96 percent of the budget is earmarked for capital expenditure. The ministry is embarking on the huge construction of infrastructure projects especially the construction of road and electrification projects. For example, N150million is budgeted for the design and construction of Atimbo-Akpabuyo road in Cross River State while the rehabilitation of Benin-Abraka road will consume N141million. The rehabilitation of the East-West Road would receive a boost of N8billion in counterpart funding from the ministry. N100million will be expended on land reclamation and shore protection at Kurutie in Warri South Local Government Area while N30million will go for consultancy on the design of solar lighting project at Ode Aye in Okitipupa Local Government Area of Ondo State. Road/building contractors as well as suppliers of electrical equipment such as transformers, solar panel, gravel, sand, cement and building materials would benefit from this budget.

Bridging the digital divide

With a total budget of N18billion, the Ministry of Communications Technology has a capital expenditure of N7.5billion. The ministry intends to spend N534million on purchasing computers while spending N622million to procure security equipment. N753million will go for the construction of office buildings and about N960million will be shelled out for the purchase of computer software. N100million will go for engineering services, N122million for the establishment of a national ICT data bank and N160million for the set-up of an ICT university. N329million will be spent on E-government kiosks/centres. IT vendors and computer engineering firms would be the biggest beneficiaries of this proposed budget even as suppliers of building materials and office equipment will do well to take advantage of the ministry’s budget.

Carrying everyone along

From all indications, the 2017 budget has been designed to involve the participation of the populace, corporate and individuals, as much as feasible. Vice President Yemi Osinbajo says the renewed emphasis on stimulating private sector investment is predicated on government’s belief that it is only by partnering with the private sector that the economy can be propelled out of recession and onto the path of sustainable growth.

By Osaze Omoragbon

About The Author

Related posts

Please wait, while your subscription is progressing...

Subscribe to TheEconomy Newsletters & Notifications

Want to be notified when our article and news are published? Enter your email address and name below to be the first to know.