The Minister of Budget and National Planning, Senator Udoma Udo Udoma, who spoke to news men shortly after a special meeting of the Federal Executive Council (FEC) meeting at the Presidential Villa, Abuja today, said that 2016 budget would be N1 trillion more than the one for the 2015.
“And so next year, we are looking at an expansionist budget; we are looking at a budget that will be N1 trillion more than last year. So we are looking at a budget of about N6 trillion. Last year’s budget, including the supple that was about N5 trillion.
The minister said that the budget increase would be spent on capital because, he explained “there is the need to increase the capital because of the infrastructure issues that we have to address.”
Udoma said that FEC also approved the Medium Term Economic Framework (MTEF), which sets out the policies of government over the next years.
“It sets out the fundamental economic underpinning of the budget,” he said.
According to him, the Federal Government would be working with $38 crude oil price in order to be very conservative in its spending.
“We are also working with 2.2 million barrels a day production. It is achievable, particularly because with the passage of the Petroleum Industry Bill ( PIB) which we are working to achieve, we believe that, that is a modest figure that we should be able to produce something higher than that.
“Following from this, the MTEF will be submitted to the National Assembly, and we expect a feedback from them. Thereafter, we will be working to try and get the budget finalised. It is when the budget is finalised that you will really see the details of what we intend to do. This is just a medium term economic framework,” the minister said.
Udoma said that the 2016 budget would be sourced from two sources, explaining: “we are looking at trying to increase our non-oil revenue; we are looking at trying to get more money from the various government agencies, policing their collection and trying to get more money from them. We will also look at keeping down our recurrent budget. That means we are looking at savings that we can make from overheads.
“We will look at the efficiencies from our revenue collecting agencies like the FIRS, in terms of company in cone tax, in terms of VAT, and then the difference, we will have to borrow. But the level of borrowing that we anticipate and we are projecting will be well within the maximum that we allow, which is 3 per cent of the GDP, because we want a prudent budget, we want a credible budget, so we are working on that now.”
He said that government will be working with the exchange rate that the Central Bank of Nigeria (CBN) has given.
Responding to question on whether the subsidy will be retained in the budget, the minister simply said: “We are looking into that.”
Udoma, who said that the government is projecting 30 per cent capital project, up from the current 15 per cent, assured that the budget would not affect the federal workers’ salaries negatively.
“We are projecting almost 30 per cent capital project, up from the 15 per cent or so that it is currently. We will try and reduce overheads but keep personnel cost. We are not going to adjust it by much, but we are expecting some savings from the IPPIS system which we are using. So we are not cutting anybody’s salary; everybody will get their salaries.” [myad]
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