Here are the most important points from the President’s budget presentation made on Tuesday morning.
Budget Proposal: N6.08 trillion
- Capital expenditure: N1.8 trillion (30% of total budget), up 223% from N557 billion in 2015
- Non-debt recurrent expenditure: N2.35 trillion, down 9% from N2.59 trillion in 2015
Critical Sectors (Capital Spending):
- Works, Power and Housing – N433.4 billion;
- Transport – N202.0 billion;
- Special Intervention Programs – N200.0 billion;
- Defence – N134.6 billion; and
- Interior – N53.1 billion.
The investments in infrastructure and security are meant to support reforms in the Agriculture, Solid Minerals and other core job creating sectors of the economy.
Critical Sectors (Recurrent Spending)
- Education – N369.6 billion;
- Defence – N294.5 billion;
- Health – N221.7 billion;
- Ministry of Interior – N145.3 billion
Emphasis will also be on teachers, armed forces personnel, doctors, nurses, police men, fire fighters, prison service officers and many more critical service providers, to ensure they are paid competitively and on time.
Revenue Projection: N3.86 trillion
Budget will be funded by:
- Oil related revenue (projected): N820 billion.
- Non-oil revenues (projected): N1.45 trillion (comprising Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies).
- Independent revenues (projected): N1.51 trillion
Budget Deficit: N2.22 trillion
- Borrowings in 2016 will be principally directed to fund capital projects.
- N113 billion will be set aside for a Sinking Fund towards the retirement of maturing loans; while
- 1.36 trillion has been provided for foreign and domestic debt service.
Budget revenue benchmarks:
- The budget was hinged on a benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day for 2016.
- Added to that, the government will be focusing on non-oil revenues by broadening the tax base and improving the effectiveness of revenue collecting agencies.
- Debt profile will rise to 14% of GDP.
Budget Deficit Financing:
N1.84 trillion of the deficit is to be financed by a combination of:
- Domestic borrowing – N984 billion, and
- Foreign borrowing – N900 billion.
The Foundation of the budget:
- Economic revival:
The budget is designed to ensure revival of the economy, deliver inclusive growth to Nigerians and create a significant number of jobs.
- Economic stabilization and growth:
The budget aims to stabilize macro-economy by achieving a real GDP growth rate of 4.37% and managing inflation. To achieve this, it will ensure the aligning of fiscal, monetary, trade and industrial policies.
- Contribution to employment:
The budget will be a platform for putting more Nigerians to work. Job creation will be a focus in every aspect of the execution of this budget, according to the President.
- Reduced taxes for small businesses to foster their growth and ability to employ:
The President wants Nigeria’s job creation drive to be private sector led, and will encourage this by a reduction in tax rates for smaller businesses as well as subsidize funding for priority sectors such as agriculture and solid minerals.
- Teaching and teachers is a priority:
As an emergency measure, to address the chronic shortage of teachers in public schools across the country, the Federal Government will partner with State and Local Governments to recruit, train and deploy 500,000 unemployed graduates and NCE holders. These graduate teachers will be deployed to primary schools, thereby, enhancing the provision of basic education especially in rural areas.
- Government accountability / Treasury Single Account:
With the full implementation of the Treasury Single Account, the government expects significant improvements in the collection and remittance of independent revenues.
The government is also working to eliminate wasteful spending, through its newly established “Efficiency Unit”, and the utilization of Government Integrated Financial Management Information Systems (GIFMIS) to improve financial management. The Efficiency Unit is working across MDAs to identify and eliminate wasteful spending, duplication and other inefficiencies.
Other salient issues
- Conditional cash transfer program:
Through the office of the Vice President, the government is working with development partners to design an implementable and transparent conditional cash transfer program for the poorest and most vulnerable. This program will be implemented in phases. Already, the compilation of registers of the poorest persons is ongoing. The president says that in the coming weeks, the full programme will be presented.
- Public primary school feeding and free education
The programme will include a home-grown public primary school feeding and free education for science, technology and education students in tertiary institutions. This is considered a historic milestone for the nation.
- On The Fuel Price and Scarcity:
Buhari said the fuel scarcity situation is unfortunate, and apologized to Nigerians for the suffering and said the Government is working hard to end the shortages. However the petrol pump price will stay at N87/litre for now.
- On Looted Funds:
Buhari says “we will not be deterred. No matter where it is hidden, no matter how long it takes”.
- On The Future:
Buhari said the future looks bright and appealed that all should work together to make the vision a reality’.