Following the final signing of the 2016 budget of the Federal Government into law last week by President Muhammadu Buhari, Minister of National Planning and Budget, Senator Udoma Udo Udoma on Thursday said the first tranche of the N1.75 trillion capital expenditure would be released today.
Speaking at the budget breakdown briefing held at the Banquet Hall of the Presidential Villa, Udoma gave the assurance that there will not be delay in prompt releases of the current budget as his ministry would work closely with the Federal Ministry of Finance on the issue.
Major outlay of the expenditure provisions of the N6.06 trillion budget, which represents an increase of 35 per cent over the 2015 provision of N5.067 trillion include Statutory Transfer (inclusive of N157 billion capital component- N351.37 billion; Debt Service including sinking fund provision-N1.48 trillion; Recurrent (non debt) Expenditure- N2.65 trillion; Capital Expenditure (excluding share of Capital in Statutory Transfers)- N1.59 trillion and; Capital Expenditure (including share of capital expenditure in Statutory Transfer)- N1.75 trillion.
The Minister, who said that the 2016 budget will be for a full year ending in May 2017, disclosed that government will actively implore the use of public private partnerships in the development of infrastructure. “We are encouraging our ministers to explore concessioning arrangements for airports, major roads and other infrastructure projects.”
He continued that as part of efforts to encourage private sector participation in infrastructure development, Federal Government was working to encourage the establishment of an infrastructure fund of $25 billion within the next three years.
The expansionary budget is directed at reflating the economy, is projected at a deficit of N2.2 trillion, which is about 2.14 per cent of GDP, but well within the three per cent threshold stipulated by the Fiscal Responsibility Act, 2007.
The N1.8 trillion deficit is to be financed mainly by borrowings of N1.8 trillion to be source from both domestic and foreign market so as not to crowd out the private sector.
“Furthermore, we are optimistic that we may be able to access some of the foreign loans on a concessionary basis. The Ministry of Finance is currently negotiating with multiple sources to secure the external financing,” Udoma stated.
Speaking on implementation plans the Minister said strategies designed to direct the trajectory of national and regional economies towards a path of sustainable development and inclusive growth had been worked out over the course of 2016 fiscal year.
“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”, he noted.
Explaining that his ministry had started working on a comprehensive Medium Term National Plan, Udoma said work had commenced fully on the preparation of 2017 budget and that it would be submitted early to the National Assembly such that there would be enough time for them to pass it before year end.
Key Assumptions of the 2016 Budget
•Oil production of 2.2 million barrels
•Benchmark oil price of $38 per barrel
•Average Exchange Rate of N197/$
Revenue Projections
•Net distributable revenue- N5.72 trillion
•Main Federation Account revenue- N4.303 trillion
•Value Added Tax revenue- N1.416 trillion
•Net Oil receipts- N1.48 trillion
•Net non-oil revenue account-N4.22 trillion
•States & LG share of distributable revenue- N3.24 trillion
•FG share of net distributable revenue- N2.48 trillion
·FG projected revenue- N3.855 trillion – Tribune.
