Nigeria: Federal Government Of Nigeria's 2018 Budget

Last Updated: 25 January 2018
Article by Deloitte Nigeria


President Muhammadu Buhari presented the 2018 Budget of the Federal Government of Nigeria (FGN) to a joint session of the National Assembly on Tuesday, 7 November 2017. The Budget, tagged Budget of Consolidation, is aimed at ensuring growth and stability as Nigeria recovers from a period of economic recession. The President had earlier submitted the Medium Term Expenditure Framework and Fiscal Strategy Paper for 2018 to 2020 (MTEF/FSP) to the National Assembly for approval.

Total expenditure for 2018 is projected at ₦8.61 trillion with expected revenue of ₦6.61 trillion resulting in a deficit of N2.0 trillion.

A snapshot of the projections and underlying assumptions are set out below.

Key highlights of the Budget

a. Expenditure projections

Total expenditure for 2018 is projected at ₦8.61 trillion. This represents a nominal increase of approximately 16% over the 2017 budget estimate of ₦7.44 trillion.

In line with the Economic Recovery and Growth Plan (ERGP), capital expenditure (inclusive of statutory transfers), constitutes 30.8% (₦2.43 trillion) of aggregate expenditure, compared to 29.2% (₦2.17 trillion) in 2017. Capital allocations in 2018 represents an increase of about 12% over the 2017 estimates.

Ministry of Power, Works and Housing is poised to receive the highest capital allocation with a budget of ₦555.9 billion followed by the Ministry of Transportation comes with projection of ₦263.1 billion.

b. Revenue projections

Aggregate FGN revenue for 2018 is projected at ₦6.61 trillion, with oil revenue contributing ₦2.4 trillion (36.9%) and non-oil revenue of ₦4.17 trillion (63.1%). This is based on estimated crude oil production of 2.3 million barrels per day at an exchange rate of ₦305/ $1.

Estimated non-oil tax revenue includes proceeds from the proposed restructuring of FGN's equity in joint ventures in the oil and gas sector as well as recoveries and proceeds from the on-going tax amnesty programme (Voluntary Asset and Income Declaration Scheme).

c. Financing the deficit

The 2018 fiscal deficit of N2.0 trillion represents 1.77% of GDP; a reduction by approximately 20% from the 2017 deficit of N2.4 trillion (2.18% of GDP).

It is envisaged that the fiscal deficit will be funded largely by net borrowings sourced locally and internationally, estimated at N1.70 trillion and proceeds from sale/restructuring of government non-oil assets estimated at N306 billion.

d. Key budget assumptions

The above revenue projections are based on the following assumptions.

i. Oil revenue baseline assumptions

Average oil production is estimated to hit 2.3mbpd1 for 2018 representing a growth of 4.5% over 2017 oil production estimates.

Given that average oil production in 2016 was 1.82mbpd and 1.9mbpd as at July 2017, and also bearing in mind the impact of the palliative measures used to tackle production challenges that beset the country, this projection appears realistic. This is more so as the actual oil production peaked at 2.2mbpd in June 2017.

The budget also proposes a benchmark oil price of $45pb for 2018. This is based on World Bank's expectation of positive movements in global oil prices in the near term due to predictions of rise in oil demand, extension of OPEC/non OPEC2 output cut agreements, greater compliance by producers, and supply outages among major exporters.

The medium term benchmark prices appear conservative considering that actual oil price in 2016 was $42pb against a benchmark of $38pb, and $49.8pb as at July 2017 compared to benchmark price of $44.5pb. This is to cushion the effects of price fluctuations.

ii. Non-oil revenue baseline assumptions

Non-oil revenue projections are guided by expected growth in non-oil output and improved efficiency in revenue collection as described below.

  • Custom duties: The proposed 17% increase (from 2017 of N278bn) in expected customs revenue is a reflection of FGN's drive and actions; particularly increased efficiency. Other measures include continuity of improved flexible forex regime, introduction of common external tariff, and expected decrease of average duty rates. It is envisaged that these would boost trade volume and increase customs revenues over the three year period.
  • Companies income tax (CIT): While the MTEF anticipated growth in revenue from CIT, the actual 2018 Budget appears conservative in view of the 2% reduction in expected revenues from this stream. This becomes more alarming in view of the assumption under the MTEF that companies' profitability ratio will increase due to government's ongoing efforts to improve the business environment with the ease of business campaign, leveraging private sector capital and increase in tax collection efficiency.
  • Value added tax (VAT): Based on MTEF, VAT revenue is estimated on aggregate national consumption which is projected to hit N90.48 trillion in 2018 compared to the estimated target of N83.84 trillion for 2017. Additionally there is expected 42% increase in VAT collection in 2018.

    The Budget however does not speak to this assertion as VAT revenues in the Budget declined by 14.1% when compared to 2017 corresponding figures.

  • FGN independent revenue and amnesty proceeds: It is expected that FGN's efforts to tackle leakages in government revenues and expanding the tax net through a tax amnesty programme, will yield substantial improvements in remittances to the consolidated revenue fund in the medium term.


The 2018 budget is geared towards building on economic recovery accomplishments and achieving sustainable economic growth in the medium term, while ensuring increase in non-oil revenues and capital expenditure. However, taking a cue from the underperformance of the 2017 budget implementation, the FGN will need to take steps that will ensure full implementation of the budget in 2018 to facilitate the achievement of FGN's set goals for the year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions