Senator Udo Udoma, Minister of Budget and National Planning, on Thursday, said that the Federal Government would begin capital releases for the 2016 budget today. Analysts say implementation of the 2016 budget may inject the funds needed to lift Nigerian economy from the current level.
The minister spoke while giving a breakdown of the 2016 Budget of Change at the Presidential Villa, Abuja.
“By tomorrow, some releases would be made. We are ready to start releases as far as the budget is concerned,” said Udoma, adding that his ministry intends to work closely with the Federal Ministry of Finance to ensure cash backing of the capital projects.
“The 2016 budget would run concurrently until May next year as government intends to return to the January to December financial year, the minister said in a question and answer session.
“We intend to take the budget to where it ought to be, the January to December financial year, which is much better for implementation. So for the next year’s budget we intend to get it to the National Assembly so that it is passed by the year end,” he said.
This is even as the budget minister said the 2016 budget would include six strategic areas such as economic diversification, critical infrastructure and reforms in the oil and gas sector.
Others, he said, include ease of doing business, policy, environment, national security and governance, and social investment.
“The Strategic Implementation Plan forms the basis for the preparation and implementation of the 2016 budget, as it documents the key short-term priorities of the incumbent administration to place the economy on this upward trajectory as it is repositioned for change, inclusive growth and sustainable development,” Udoma said.
A breakdown of the 2016 budget projections shows that the fiscal document envisages a net distributable revenue of N5.72 trillion, comprising main federation account revenue of N4.303 trillion and N1.416 trillion from the value-added tax pool account.
Of the distributable revenue, net oil receipts amount to N1.48 trillion or 25 percent while net non-oil revenue accounts for the balance of N4.22 trillion or 75 percent.
The states and local governments’ share of the distributable pool amount to N3.24 trillion while the Federal Government would receive N2.48 trillion.
The Federal Government’s budgeted revenue is projected at N3.855 trillion largely contributed by the internally generated revenue (IGR) of N1.51 trillion, which is 35 percent increase over the N2.855 trillion for the 2015 budget.
Federal Government’s revenue is mainly to be derived from the growth in non-oil resources from corporate tax; VAT and dividends from government corporations and independent revenue.
A projection of N1.88 trillion was made on corporate taxes in the 2016 budget as against N1.42 trillion in 2015, and VAT collection of N1.48 trillion in 2016 from N1.28 trillion last year.
Provisions for expenditure of the N6.06 trillion 2016 budget shows a 35 percent increase over the 2015 budget of N5.067 trillion.
Statutory transfer (inclusive of N157 billion-capital component) is put at N352.37 billion, debt servicing including sinking fund of N1.48 trillion, recurrent (non-debt) expenditure is put at N2.65 trillion.
Capital expenditure (excluding share of capital in statutory transfers) is put at N1.59 trillion while the capital expenditure (including share of capital expenditure in statutory transfer) is put at N1.7 trillion.
Some key allocations in the 2016 budget are Ministry of Power, Works and Housing, N456.93 billion; Transpiration, N202.34 billion; Defence, N443.07 billion; Interiors, N513.65 billion; Education, N403.16 billion and Health, N250.06 billion.
Others are Agriculture and Rural Development, 75.80 billion; Solid Minerals, N16.73 billion; Youth and Sports Development, N75.79 billion; Water Resources, N53.30 billion and special intervention programmes of N500 billion.
The budget is predicated on an oil production benchmark of 2.2 million barrels per day at $38 per barrel and an exchange rate of N197 to a dollar.
Udoma said government plans to actively support the use of public private partnerships in the development of infrastructure and encourages ministers to explore concessioning arrangements for airports, major roads and other infrastructure projects.
The government, he said, was working to raise $25 billion for the establishment of an infrastructure fund within three years.
Among priority projects listed for implementation by government are dualisation of the Kano-Maiduguri Road (sections I-V) for N13 billion; Lagos-Ibadan Expressway (section1) for N40 billion; N1.1 billion for the generation of 700mw from Zungeru Hydro Power Project; N18.3 billion for the completion of Abuja (Idu) – Kaduna 186.5km single track rail line; N60 billion counterpart funding for Lagos- Kano Standard Gauge rail line and N60 billion counterpart funding for Calabar-Lagos Standard Gauge rail line.