The Buhari-led federal government yesterday, proposed a budget of N6 trillion for 2016 at an oil bench mark of 38 dollar per barrel. And this is said to be the first planned spending for the administration that came into power in May this year.
This was disclosed during an address to the State House Press Corps after an emergency Federal Executive Council meeting presided over by President Muhammadu Buhari. The address was made by the minister of Budget and National Planning, Udoma Udoma. According to the minister, the proposal was contained in the Medium Term Expenditure Framework, MTEF, approved by the council.
Declining to comment on the amount of looted funds that had been retrieved by the government so far, the minister said:
At today’s council, the council approved the Medium Term Expenditure Framework. This sets out the policies of government over the next three years. It sets out the fundamental economic underpinning of the budget. The highlights are as follows.
We project and we are working with 38 dollar crude oil price. We consider that to be very conservative but because of the uncertainties, we feel that we should start with a conservative crude oil price.
We also are working with 2.2 million barrels per day production.
We believe it is achievable, particularly because with the passage of the Petroleum Industry Bill, which we are working to achieve, we believe that that is actually a modest figure; that we should be able to produce something higher than that.
And so, next year we are looking at an expansionist budget. We are looking at a budget that will be N1 trillion more than last year.
So we are looking at a budget of about N6 trillion. Last year’s budget, including the supplementary, was about N5 trillion.
Most of the increases, all the increases actually will be spent on capital because there is the need to increase the capital spending because of our infrastructure issues we have to address,”.
He further stated that the budget would be submitted to the National Assembly and after their response, the budget will be finalized with all the details included. He added that the funding for the budget would come from what is gotten from the non-oil sector saying that the government is projecting almost 30% of the budget on capital projects, up from the 15% or so that it is prevailing now.
We are looking at trying to get more money from the various government agencies, policing their collection and trying to get more money from them.
We will also look at keeping down our recurrent budget, which means we are looking at savings that we can make from overheads.
We will also look at the deficiency from our revenue collecting agencies like the FIRS, in terms of companies income tax; in terms of VAT, and then the difference we will have to borrow.
But the level of borrowing that we anticipate and we are projecting will be well within the maximum that we allow, which is three per cent of the GDP, because we want a prudent budget; we want a credible budget,” .
Mr. Udoma also stated that the council was looking into the matters concerning the exchange rate that the Central Bank of Nigeria had given for the budget. The statement also made it clear that the budget committee was also checking facts about fuel subsidy to know if it would be retained in 2016. He concluded by saying,
We will try and reduce overheads, but keep personnel cost; we are not going to adjust it by much.
But we are expecting some savings from the Integrated Payroll and Personnel Information System, IPPIS, which we are using; so we are not cutting anybody’s salary; everybody will get their salaries.