- Capital expenditure increases from N557bn to N1.8trn
- Recurrent N4.28bn, deficit N2.2trn
- 2016 Budget a joke – Prof Utomi
President Muhammadu Buhari yesterday unveiled the sum of N6.08 trillion as budget estimate for the 2016 fiscal year before a joint session of the National Assembly.
The proposed budget, with a revenue projection of N3.86 trillion, gave critical attention to Education, Defence, Health and the Power sectors, which received the lion share of the appropriation.
In ensuring that the fiscal policy impacts positively on mass of the Nigerian people, Buhari said, “We will devote a significant portion of our recurrent expenditure to institutions that provide critical government services.”
To that effect, the president said the sum of N369.6 billion has been voted for Education; N294.5 billion (Defence) ; and N221.7 billion (Health), adding that, “This will ensure our teachers, armed forces personnel, doctors, nurses, police men, fire fighters, prison service officers and many more critical service providers are paid competitively and on time.”
The budget however indicates a deficit of N2.22 trillion, equivalent to 2.16% of the country’s Gross Domestic Product, GDP.
While delivering his speech, President Buhari explained that the deficit would take the country’s overall debt profile to 14% of its GDP.
He pointed out that after reviewing the trends in the global oil industry, a benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day were arrived at.
The president hinted that in 2016, oil related revenues are expected to contribute N820 billion, while non-oil revenues, comprising Company Income Tax (CIT); Value Added Tax (VAT); Customs and Excise duties and Federation Account levies, would contribute N1.45 trillion.
In specific terms, the president emphasised that government would focus on non-oil revenues by broadening the tax base and improving the effectiveness of revenue collecting agencies, with a view to diversifying the economy.
Buhari said the 2016 budget was basically designed not only to revive the economy, but to also deliver inclusive growth to Nigerians and create a significant number of jobs.
The President also stated that, as an emergency measure to address the chronic shortage of teachers in public schools across the country, there is plan to partner with state and local governments to recruit, train and deploy 500,000 unemployed graduates and NCE holders.
He maintained that, to deliver its development objectives, government has increased the capital expenditure portion of the budget from N557 billion in the 2015 budget to N1.8 trillion in the 2016 budget.
Explaining further, the President said the increased capital expenditure in the 2016 fiscal policy 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 (N53.1 billion).
This, according to him, will stimulate the economy and make it more competitive by focusing on infrastructural development; delivering inclusive growth and prioritizing the welfare of Nigerians.
…2016 budget to create half a million teaching jobs
President Muhammadu Buhari, yesterday, said the 2016 budget will create jobs in all sectors of the economy, with education alone employing half a million teachers.
Senate also approved and passed his request to allow capital budget of 2015 to extend to March 2016, meaning that the implementation of the 2016 budget will start from March 2016.
Buhari, who made this known while presenting his 2016 budget estimates at the joint session of the National Assembly, pledged that the federal government will invest to safeguard lives and properties of Nigerians in order for them to operate in secure environments.
Also, he added that the federal government is ready to work in the interest of Nigerians and will fight for the protection of its citizens.
He said: “We assure Nigerians that our 2016 borrowings will be properly directed while N1.36 trillion has been provided for foreign and productive aspects.
“We are here to serve and indeed Nigerians will get a service they have longed for and rightfully deserve.”
However, while assuring Nigerians that the trust bestowed in the government is not breached, he also suggested that the Nigeria economy needs to find other means of revenue apart from oil.
“This budget is a major step in delivering. We have demonstrated a strong will to fight corruption.
“We implemented the Treasury Single Account which has provided greater visibility to revenue and cash flow,” he added.
Bukola Saraki, the Senate President said the 2016 budget must be bold and pragmatic in providing transparent incentives and conducive environment that will prime private sector-led development, encourage local production and promote made-in Nigeria goods.
“The National Assembly has a critical role to play and we recognize this role. On the budget we are willing and ready to provide the scrutiny necessary to pass only a budget that can be implemented comprehensively to the letter,” he said.
…2016 budget, a joke – Utomi
Meanwhile, Nigerian economist, Professor Pat Utomi stated that the 2016 national budget presented to the National Assembly was ‘a joke’.
President Muhammadu Buhari had presented the 2016 national budget which is estimated at over six trillion to the joint session of the National Assembly yesterday.
“Putting it in a very awkward position, I consider the budget process a joke,” he said.
Utomi who spoke on a national Television yesterday said the issue is not about making luxurious budget but argued that the major deterrent is always implementation.
“We somehow do not have the discipline of the budget process, we go through budget as public relations exercises because they are supposed to be done and decision makers go ahead to do whatever they want to do,” he said.
Proffering solutions to the problem of budget implementation, Professor Utomi said that “the goal is to achieve an execution premium, but if those who are responsible for it (the budget) really had no plan whatsoever to follow the budget, then, you are wasting your time.
“When those who are responsible for it do not see long term goals in which the budget is just a piece in an unfolding set of activities that would reach a certain goal, there is no point of it.
“I think, what has happened to us is that we got to a point of disconnect between the leadership elite, the political class, the bureaucratic elite and development aspirations of the Nigeria people,” he said.
Professor Utomi further said that the major reason why the budget isn’t working in Nigeria is ‘leadership’.
“There is low energy in leadership. We are not leading the country in the right direction.
“What the country is dealing with is a huge financing gap; we used to earn so much and now, we are earning this much, if we pretend that nothing has changed, then we would go into an economic spiral,” he added.