The Buhari Pledge: 2016 Budget Highlights

Revenue projection of N3.86 trillion;
A deficit of N2.22 trillion;
Deficit is equivalent to 2.16% of Nigeria’s GDP, will take overall debt profile to 14% of GDP;
Deficit will be financed by domestic borrowing of N984 billion, foreign borrowing of N900 billion, totaling N1.84 trillion.

FG to increase revenues, reduce overheads, bring the fiscal deficit down to 1.3% of GDP by 2018;
Oil related revenues to contribute N820 billion;
Non-oil revenues – Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies – to contribute N1.45 trillion;
N1.51 trillion revenue from independent revenues;
Capital expenditure increased to N1.8 trillion, that is 30% of total budget;
223% year on year growth in capital expenditure

In future, FG intend to raise the percentage allocation for capital expenditure;
Sectoral allocations (Capital Projects):

Works, Power and Housing – N433.4 billion;
Transport – N202.0 billion;
Special Intervention Programs – N200.0 billion;

Defence – N134.6 billion;
Interior – N53.1 billion;
Education – N369.6 billion;

Recurrent expenditure:
N294.5 billion Defence;
N221.7 billion, Health
N145.3 billion, Ministry of Interior;
Benchmark price of oil, $38 per barrel;
Production estimate of 2.2 million barrels per day;
FG to focus on non-oil revenues by broadening tax base and improving the effectiveness of revenue collecting agencies;
With full implementation of the Treasury Single Account (TSA), government expect significant improvements in the collection and remittance of independent revenues;

All MDAs must present their budgets in advance, and remit their operating surpluses as required by section 22 of the Fiscal Responsibility Act;

Extension of the Integrated Personnel Payroll Information System (IPPIS) to all MDAs;

FG to strengthen controls over personnel and pension costs with the imminent introduction of the Continuous Audit Process (CAP);
Buhari Administration is commitment to a lean and cost effective government;
Aims to ensure macroeconomic stability by achieving a real GDP growth rate of 4.37% and managing inflation;
Will ensure the aligning of fiscal, monetary, trade and industrial policies;
Administration will have a job creation focus in every aspect of the execution of 2016 budget;
Job creation drive will be private sector led;

Tax reduction for smaller businesses;
Subsidised funding for priority sectors such as agriculture and solid minerals;
FG will partner with State and Local Governments to recruit, train and deploy 500,000 unemployed graduates and NCE holders;
FG to partner with State and Local Governments to provide financial training and loans to market women, traders and artisans, through their cooperative societies;
Conditional cash transfer program for the poorest and most vulnerable;
Public primary school feeding and free education for science, technology and education students in tertiary institutions;
FG directs Petroleum Products Pricing Regulatory Agency (PPPRA) to adjust pricing template to reflect competitive and market driven components, keep the selling price for all marketers of petrol at N87 per liter for now;
Current fuel scarcity caused by market speculators and resistance to change by some stakeholders;
FG pledges to end fuel shortages, bring fuel to pumps all over the country;
FG directs NNPC to explore alternate funding models that will Nigeria to honour obligations in Joint Ventures (JVs), deep offshore fields;
FG will invest to safeguard lives and property;

FG will invest in equipping farmers with the right tools, technology and techniques;
FG will invest in empowering and enabling miners to operate in a safe, secure, humane environment;
FG will invest in training youths, through the revival of technical and vocational institutions;
FG proposes 9% reduction in non-debt recurrent expenditure, from N2.59 trillion in the 2015 Budget to N2.35 trillion in 2016.
Budgets N300 billion for Special Intervention Programs, which takes the total amount for non-debt recurrent expenditure to N2.65 trillion;
Efficiency Unit with effective implementation of GIFMIS and IPPIS will drive a reduction of overheads by at least 7%, personnel costs by 8% and other service wide votes by 19%;

Budget will be executed to provide optimum value by ensuring every naira spent by Government, counts;
2016 borrowings will be directed to fund capital projects;
N113 billion set aside for Sinking Fund towards the retirement of maturing loans;
N1.36 trillion provided for foreign and domestic debt service;
Central Bank fine-tuning its foreign exchange management to introduce flexibility, encourage additional inflow of foreign currency to help ease pressure;
Tough decisions will be made but not necessarily to increase the level of pain already being experienced by most Nigerians;
FG aware of investors, business owners, industrialists, farmers, traders entrepreneurs, pains;

Pledges that status quo cannot continue;

Pledges that rent seeking will stop.
Pledges that artificial current demand will end;

FG’s monetary, fiscal and social development policies are aligned;
Nigerian economy needs to move away from dependency on oil;
Growth must be inclusive;

Nigerians must be part of the growth story;
Government shall deliver security, jobs and infrastructure as the right of all Nigerians;
Trust in government is at an all-time low;
FG pledges to go back to basics; our actions will speak for us;
President’s team of dedicated, committed and patriotic Nigerians well aware of the task ahead;

President assures that government is taking on the challenge;
President and team will not betray the trust reposed in them;
President and team will welcome and be responsive to feedback, criticisms.
President and team here to serve;
Nigerians will get the service they longed for, which they rightly deserve;
Government cannot do it alone;
Require the support of civil servants, organised labour, industry groups, press religious and traditional institutions;

FG makes call for all of us to stand, serve Nigeria;
Budget represents major step in delivering a new opportunity for Nigeria;

It demonstrates FG’s confident optimism that despite the challenging times, Government has the will, resourcefulness and commitment to deliver prosperity to Nigerians;