The Federal Government will adopt a zero-based budgeting format for next year, Vice President Yemi Osinbajo said yesterday.
He spoke while receiving the National Economic Summit Group (NESG) at the State House in Abuja.
He also received a delegation from the Chartered Institute of Stockbrokers (CIS) and the Association of Stockbroking Houses of Nigeria (ASHON).
The zero-based budgeting, he said, will be carefully coordinated to ensure that it is policy-driven, especially regarding the proposed social intervention policy of President Muhammadu Buhari’s administration.
Zero-based budgeting is planning according to needs and costs, different from the existing Envelope Budgeting or traditionally incremental budgeting whereby the planning is based on existing income and expenditure as the deciding factor in national financial planning. This often incurs waste and assumes previous costs as constant.
Osinbajo, according to a statement by his spokesman Laolu Akande, also told the NESG that the introduction of the Treasury Single Account (TSA) policy and its implementation by Ministries, Department and Agencies (MDAs) is a creative way of blocking leakages in the system to make way for a workable budget.
Through the zero-based budgeting, he said, the Federal Government will focus on a bottom-up approach to development.
According to him, the Federal Government is also planning to set up an infrastructure fund to facilitate easy funding for critical areas of the economy.
The fund, Osinbajo said, will be planned outside of the budget to handle major segments of the economy, such as road and power.
“Government is working out a document that would guide the administration within the four years of its life-span,” he said.
The NESG delegation praised the Federal Government for the introduction of the TSA and offered to be part of the advocacy as a sound financial policy.
The vice president said the Federal Government would explore the avenue of utilising the capital market as another means of providing alternative funding options for the execution of capital projects.
He said allowing retail investors to come into the nation’s capital market would ultimately deepen the market with potentials for multiplier effects on other sectors of the economy.
Some of the problems of the capital market, he said, are due to unethical practices by some operators.
He said those who caused the crash in the market in the past were not punished, and urged the two bodies to engage in self-regulation as a means of protecting investors and the market.
The leader of the delegation and Acting President of CIS, Mr. Oluwaseyi Abe, praised the achievements of the Buhari administration within 100 days, especially its impact on security, power and the anti-corruption crusade, stressing on its positive effects on the overall economy, he said a new Nigeria was being formed under Buhari’s leadership.