Figures obtained from the Medium Term Expenditure Framework, MTEF have shown that
there is a plan to distribute among the three tiers of government, N5.7 trillion for the 2016
fiscal year, reports LINUS OOTATHE FEDERAL government
has earmarked N500 billion
for the implementation of
its social security scheme for
unemployed young graduates
under the 2016-2017 Medium
Term Expenditure Framework,
MTEF and Fiscal Policy
Strategy, FPS submitted to the
National Assembly late last
The N500 billion projection
comprises the amount to be
spent on the government’s
school feeding initiative as well
as conditional cash transfers of
N5, 000 to “the most vulnerable
persons in the society”.
According to the MTEF, the
scheme, which will commence
in collaboration with state
governments, will start as a
pilot, following which the
federal government will later
seek the support of donor
“The federal government
will collaborate with state
governments to institute wellstructured
social welfare
intervention programmes such
as school feeding programme
initiatives, conditional cash
transfers to the most vulnerable
and post-NYSC grant.
“N500 billion has been
provisioned in the 2016 budget
as social investment for these
“These interventions will
start as a pilot scheme and
work towards securing the
support of donor agencies and
our development partners in
order to minimise potential
risks,” the document stated.
The federal government also
explained that in the future, a
broader social welfare scheme
would be created to cater for
the larger population, which it
said, would include the poorest
and most vulnerable Nigerians
“upon evidence of children’s
enrolment in school and
evidence of immunisation”.
The framework, according
to the MTEF covers the period
2016 to 2017 and was sent to
the National Assembly by
President Muhammadu Buhari
late last year for approval.
A breakdown of the N5.7
trillion shows that the sum of
N4.3 trillion is being planned
to be shared under statutory
sources from the Federation
Account, while the balance
of N1.4 trillion is to be shared
from the Value Added Tax
(VAT) pool account.
From the N4.3 trillion, the
fiscal strategy paper revealed
that the federal government
would get the sum of N2.2
trillion, representing 52.68
per cent; the 36 states of the
federation, N1.14 trillion or
26.72 per cent of the total;
while the 774 local government
councils are to get N886.5
billion or 20.6 per cent.
For the VAT revenue of N1.4
trillion, the document states
that the federal government
is expected to get the sum of
N212.4 billion or 15 per cent;
the states, N708 billion or
50 per cent; while the local
governments are to get the
balance of N495.6 billion or 35
per cent.
The document also states that
out of the N2.2 trillion allocated
to the federal government from
the federation account, the sum
of N43 billion, representing one
per cent, will go to the Federal
Capital Territory; ecological and
derivation, N43 billion; statutory
stabilisation, N21.5 billion or 0.5
per cent; and development of
natural resources, N72.3 billion
or 1.68 per cent.
The persistent drop in the price
of crude oil in the international
market has impacted negatively
on the nation’s revenue as the
country recorded a shortfall of
N1.27 trillion in gross federally
collectible revenue in the first
nine months of 2015.
Figures obtained from the
Federal Ministry of Finance
showed that the country earned
a total sum of N3.35 trillion
between January and September
last year from oil and non-oil
Based on the revenue
framework, which was
approved in the budget for the
2015 fiscal period, the federal
government had projected
to earn a monthly revenue of
N513.69 billion from oil and
non-oil sources.
When the N513.69bn is
multiplied over a nine-month
period, the Federal Government
had expected to earn a total sum
of N4.62 trillion as revenue.
However, owing to
production shut-in occasioned
by crude oil theft and pipeline
vandalism, the country was
only able to realise N3.35
trillion out of the projected
figure, thus leaving a shortfall
of N1.27 trillion for the ninemonth
While the federal government
had projected a monthly
revenue of N513.69 billion,
findings showed that the
revenue generating agencies
were unable to meet up with
target in the first nine months of
The highest amount generated
as revenue in the period was in
June when the sum of N485.95
billion was earned from both
mineral and non-mineral
The N485.95 billion recorded
in June represents a shortfall of
N27.74 billion when compared
with the budgeted revenue of
N513.69 billion.
Further analysis showed that
the actual receipt from mineral
and non-mineral sources was
N416.04 billion in January last
This represents a shortfall of
N97.65 billion when compared
with the targeted amount of
N513.69 billion for the month
of February, the sum of N401.46
billion was generated, indicating
a decline of N112.23 billion
compared to the budgeted
amount of N513.69 billion
In the months of March,
April and May 2015, the sums
Figures obtained from the Medium Term Expenditure Framework, MTEF have shown that
there is a plan to distribute among the three tiers of government, N5.7 trillion for the 2016
fiscal year, reports LINUS OOTA.
of N315.04 billion, N282.06
billion and N324.96 billion
were received as gross
federally collected revenue,
indicating shortfall of N198.65
billion, N231.63 billion and
N188.73 billion, respectively.
For July, August, and
September, the amounts
earned were N433.58 billion,
N369.14bn and N321.99bn
from both oil and non-oil
sources, indicating a shortfall
of N80.11 billion, N144.55
billion and N191.7 billion,
Some financial experts, who
spoke to our correspondent on
the issue of declining revenue,
said there was a need for the
government to urgently begin
a readjustment of its fiscal
position in a way that would
enable it to generate more
revenue from taxes.
The Director-General,
Institute of Fiscal Studies
of Nigeria, Mr. Godwin
Ighedosa, said, “We have so
much relied on oil revenue
in the last 45 years and with
the decline in oil revenue, the
time has come now for us to
review our fiscal position.
“We need a short-term
fiscal adjustment, particularly
in our budgeting system,
by switching from a zerobased
budgeting system
to a performance-based
budgeting system.
“There is a need for
reform of the country’s
tax administration system
to enable the Federal
Government to raise more
revenue from Capital Gains
Tax. Our tax to Gross Domestic
Product ratio is one of the
lowest in the world and we
need to address that.”
Also, the Chief Executive
Officer, Safmur Investments
Limited, Mr. Rislanudeen
Muhammad, said the fall
in revenue was making the
economy to become more
He said that while the
economy was growing
weaker by the day owing
to vulnerabilities in the oil
market, its external partners
were beginning to have
doubts about the potential in
the economy.
Muhammad, a former
Managing Director of Unity
Bank Plc said, “We have done
things wrong in the past
because we should have saved
a lot of money through the
Excess Crude Account.
“That arrangement in the
constitution that stipulates that
any money generated must be
shared is a major problem for
Nigeria. We are not earning
as much as we were earning.
What the economy needs now
is single digit interest rate and
a little devaluation to allow
for stability, support the GDP
growth rate, employment and
avoid recession.”

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