The Federal Government will today commence the release of capital expenditure for the 2016 Budget just as it explained the timeline for implementation of the fiscal policy document.
Minister of Budget and National Planning, Udo Udoma, announced this yesterday at the Presidential Villa while giving a breakdown of the 2016 budget, christened ‘Budget of Change’.
He said “by tomorrow, some releases would be made. We are ready to start releases as far as the budget is concerned”, adding that his ministry intends to work closely with the Federal Ministry of Finance to ensure cash backing for the capital projects.
He also clarified that the 2016 budget will run concurrently until May next year as government intends to return to the January- December financial year.
According to him: “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”.
Udoma disclosed that the 2016 budget will include six strategic areas including, economic diversification, critical
infrastructure and reforms in the oil and gas sector. Others are the ease of doing business; policy environment; national security;
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 re-positioned for change,
inclusive growth and sustainable development”, he said.
A breakdown of the 2016 budget projections shows that the fiscal document envisages a net distributable revenue of N5.72trillion
comprising of main federation account revenue of N4.303 trillion and N1.416trillion from the value added tax pool account.
Of the distributable revenue, net oil receipts amount to N1.48trillion or 25% while net non-oil revenue accounts for the balance of
N4.22trillion or 75%.
The states and local government share of the distributable pool amount to N3.24trillion while the federal government will receive N2.48trillion.
Federal Government’s budgeted revenue is projected at N3.855trillion largely contributed by the Internally Generated Revenue (IGR) of N1.51 trillion, which is 35% increase over the N2.855 trillion for the 2015 budget.
Growth in 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% increase over the 2015 budget of N5.067 trillion.
Statutory transfer (inclusive of N157 billion capital component is put at N352.37billion, Debt Servicing including sinking fund of N1.48
trillion, recurrent (non debt ) expenditure is put at N2.65trillion.
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 N1.7trillion.
Some key allocations in the 2016 budget include: Ministry of power, works and housing, N456.93billion, transpiration, N202.34billion,
defence N443.07billion, interiors N513.65billion, education N403.16billion, health, N250.06billion, agriculture and rural development, 75.80billion, solid minerals N16.73billion, youth and sports development, N75.79billion, water resources, N53.30 billion and special intervention programmes of N500billion.
The budget is predicated on an oil production benchmark of 2.2million barrels per day at $38 per barrel and an exchange rate of N197 naira
to a dollar.
The Budget and National Planning Minister said government had a plan to actively support the use of public private partnerships in the development of infrastructure and would encourage ministers to explore concessioning arrangements for projects like airports, major roads and other major infrastructure works.
The government, he said is working to raise $25billion for the establishment of an infrastructure fund within three years.
Among priority listed for implementation by government are: Dualisation of the Kano-Maiduguri road (sections I-V) for N13billion;
Lagos-Ibadan Expressway (section1) for N40billion; N1.1billion 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 Guage rail line; N60 billion counterpart funding for Calabar-Lagos Standard Guage rail line