President Muhammadu Buhari yesterday personally presented the 2016 N6.8trillion budget to the joint session of the National Assembly. Highlights of the budget were that Works, Housing and Power got the lion’s share of N433.4billion. He promised to retain the N87 per litre of petrol for now, while strengthening the key agencies that would keep the price at that level.
Buhari was accompanied by Vice President Yemi Osibajo and other members of the federal cabinet as he presented government’s spending plan for 2016 to a jam packed joint session of the federal legislature.
The President took the opportunity of the budget presentation to announce that pump price of petrol hasn’t been reviewed from N87. He emphasised that the price of fuel remained at the official price “for now”.
He arrived in the House of Representatives chambers which hosts budget presentations, around 10am and proceeded to present his speech after the welcome address by Senate President Bukola Saraki, who is the chairman of the Assembly.
He said the government plans to spend N6.08 trillion in 2016 with a revenue projection of N3.86 trillion, resulting in a deficit of N2.22 trillion. while capital projects will gulp N1.8 trillion.
“To deliver our development objectives, we have increased the capital expenditure portion of the budget from N557 billion in the 2015 budget to N1.8 trillion, in the 2016 bud- get. Distinguished and honour- able members of the National Assembly, for the first time in many years, capital expendi- ture will represent 30% of our total budget. In future years, we intend to raise the percent- age allocation for capital ex- penditure” the President said.
A breakdown of capital ex- penditure shows that Works, Power and Housing received N433.4 billion, while Transport got N202 billion. This is just as Special Intervention Program was allocated N200 billion; Defence – N134.6 billion; and Interior Ministry – N53.1 billion.
Buhari stated that the target- ed investments in infrastructure and security are linked to government’s reforms in the agriculture, solid minerals and other sectors with capability to create jobs for the youth.
The President, while reiterating his resolve to run a lean and transparent government, said borrowing will be strictly for capital projects, noting that N113billion will be set aside for Sinking Fund to deal with maturing loans.
He said: “Distinguished and honourable members of the National Assembly, our 2016 borrowings will be principally directed to fund our capital projects. Furthermore, the sum of N113 billion will be set aside for a Sinking Fund towards the retirement of maturing loans; while N1.36 trillion has been provided for foreign and domestic debt service. This calls for prudent management on our part, both of the debt portfolio and the deployment of our hard earned foreign exchange earnings.
“In fulfilment of our promise to run a lean government, we have proposed a 9% reduction in non-debt recurrent expenditure, from N2.59 trillion in the 2015 budget to N2.35 trillion in 2016. Furthermore, we have budgeted N300 billion for Special Intervention Program, which takes the total amount for non-debt recurrent expenditure to N2.65 trillion,” he said.
According to him, the government will ensure adequate funding for critical sectors such as education and health- care which fall under recurrent expenditure.
“We will devote a significant portion of our recurrent expenditure to institutions that provide critical government services. We will spend N369.6 billion in education; N294.5 billion in defence; N221.7 billion in health and N145.3 billion in the Ministry of Interior. This will ensure our teachers, armed forces personnel, doctors, nurses, policemen, firefighters, prison service officers and many more critical service providers are paid competitively and on time,” he disclosed.
Buhari who admitted the downturn in the economy, owing to the slide in the oil price from $112 per barrel as at June 2014 to the present $39 per barrel, noted that the prevailing socio-economic challenges has been further worsened by the unbridled corruption and security challenges experi- enced in the last few years. He, however, stressed his commitment to the ongoing fight against corruption especially in the oil and gas industry.
The President said: “Al- though we are working to diversify our economy, we will not lose sight of the need to restructure the oil and gas sec- tor which has been marred by corruption and plagued with inefficiencies. Accordingly, I have directed the Petroleum Products Pricing Regulatory Agency (PPPRA) to adjust its pricing template to reflect competitive and market driven components. We believe this can lower input costs and at- tain efficiency savings that will enable PPPRA to keep the selling price for all marketers of petrol at N87 per litre for now”.
On the issue of ensuring transparency and accountability in non-oil revenue generating agencies, which will lead to increased availability of funds for government, Buhari said he has appointed qualified persons to head these agencies. This is even as he expressed the hope that the Treasury Single Account (TSA) will block leakages.
“Some of the decisions taken by the new administration include: injection of new leadership at the helm of our revenue generating agencies including the Federal Inland Revenue Service (FIRS), Nigerian National Petroleum Corporation (NNPC), Nigerian Communications Commission (NCC), and the Nigerian Customs Service (NCS) as well as implementation of the Treasury Single Account (TSA) which, so far, has provided greater visibility of government revenues and cash flows.
“The present administration also provided intervention funds to support states to navigate their fiscal challenges by restructuring their commercial bank loans and by providing facilities to enable them to pay salary arrears,” Buhari said. -The Sun