Business
Buhari Presents N6.08 trillion budgets to NASS
…as Fashola’s ministry takes lion share with N33.4 billion
By Odunewu Segun
President Muhammadu Buhari yesterday presented the N6.08 trillion 2016 budget estimates before a joint session of the National Assembly.
According to him, the 2016 budget proposal is predicated on an N1.8 trillion capital expenditure, accounting for 30 per cent of the budget, which he said was an improvement over the N557 billion budgeted in 2015.
“This increased capital expenditure commits significant resources to critical sectors such as Works, Power and Housing – N433.4 billion; Transport – N202.0 billion; Special Intervention Programmes – N200.0 billion; Defence – N134.6 billion; and Interior gets N53.1 billion.
“These investments in infrastructure and security are meant to support our reforms in the agriculture, solid minerals and other core job creating sectors of our economy,” Buhari explained.
Non-debt recurrent spending, he added, is N2.35 trillion, down from N2.59 trillion in the 2015 budget.
While noting that the increase in capital expenditure was a fulfillment of his party’s promise to deliver development objectives to Nigerians, he said that the nine per cent reduction in recurrent spending was in fulfillment of his administration’s promise to run a lean government.
He added that the government had proposed a 223 per cent year-on-year growth in capital expenditure in demonstration of its desire to make Nigeria more competitive and commence the journey to deliver sustainable development in the country.
Furthermore, he said the government had budgeted N300 billion for the special intervention programme, which he said had raised the total amount for non-debt recurrent expenditure to N2.65 trillion.
Buhari also said the budget was predicated on a revenue target of N3.86 trillion resulting in a deficit of N2.22 trillion The deficit, he added, would amount to 2.16 per cent of Nigeria’s GDP, which he said would “take our overall debt profile to 14 per cent of our GDP”. He said this would remain within acceptable fiscal limits.
The president revealed further that the budget deficit would be financed by a combination of domestic borrowing of N984 billion and foreign borrowing of N900 billion, amounting to N1.84 trillion.
He also said the government expects to increase revenue and reduce overheads in the medium-term with a view to bringing the fiscal deficit down to 1.3 per cent of GDP by 2018, even as he noted that in 2016, oil related revenue was expected to contribute N820 billion to the budget.
On the other hand, he said non-oil revenue comprising company income tax (CIT), value added tax (VAT), customs and excise duties, and federation account levies, would contribute N1.45 trillion to the budget.
He also said the sum of N113 billion would be set aside for a sinking fund towards the retirement of maturing loans, disclosing that N1.36 trillion was also provided for foreign and domestic debt service.
The president further noted that by enforcing strict compliance with the Fiscal Responsibility Act and public expenditure reforms at all MDAs, the government had projected to earn up to N1.51 trillion from independent revenues.
Giving a breakdown of recurrent sectoral allocations, he said N369.6 billion would go to Education; N294.5 billion to Defence; N221.7 billion to Health, and N145.3 billion to the Ministry of Interior.
“This will ensure our teachers, armed forces personnel, doctors, nurses, policemen, fire fighters, prison service officers and many more critical service providers are paid competitively and on time,” he explained.
On the fuel subsidy question, Buhari said he had directed the Petroleum Products Pricing Regulatory Agency (PPPRA) to adjust its pricing template to reflect competitive and market-driven components.
“We believe this can lower input costs and attain efficiency savings that will enable PPPRA to keep the selling price for all marketers of petrol at N87 per litre for now,” he said.