President Muhammadu Buhari on Tuesday presented the 2016 budget proposal before a joint session of the National Assembly.
In a move that would surely bring relieve to some Nigerians who had queried the his silence on recent happenings, especially the long fuel queues experienced across the country, the President said he was using the opportunity not only to present the budget but also speak directly to Nigerians.
“Fellow Nigerians, the confidence of many might be shaken. However, I stand before you today promising that we will secure our country, rebuild our economy, and make the Federal Republic of Nigeria stronger than it has ever been,” Buhari stated.
“The answers to our problems are not beyond us. They exist on our farmlands; our corporations; in the universities in the hearts and minds of our entrepreneurs; through the gallantry of our Armed Forces; and the resolute spirit of Nigerians, especially the youth, who have refused to give up despite all the obstacles confronting them,” he explained before proceeding to present the budget.
The N6.08 trillion budget, tagged “The Budget of Change,” is hinged on a crude oil price of $38 per barrel and a production estimate of 2.2 million barrels per day for 2016.
Presenting the budget, the President began by acknowledging the unstable state of the economy, which he said was further worsened by corruption and insecurity faced some parts of the country in the last few years.
“From those who have lost their jobs, to those young people who have never had a job, to the people in the North East whose families and businesses were destroyed by insurgents, this has been a difficult period in our nation’s history, lessons that we must not forget or ignore, as we plan for the future,” the President acknowledged.
Despite the above challenges, he explained that the 2016 budget will focus on getting the economy back on its feet while addressing the growing concern about unemployment.
“We believe that this budget, while helping industry, commerce and investment to pick up, will as a matter of urgency, address the immediate problems of youth unemployment and the terrible living conditions of the extremely poor and vulnerable Nigerians,” he assured.
The projected revenue in 2016, according to the budget, is N3.86 trillion, leaving a deficit of N2.22 trillion, which would be financed through local and foreign borrowing.
The President said N984 billion will come from domestic borrowing while foreign borrowing will bring in N900 billion.
Explaining how the government intends to generate revenues to implement the budget, President Buhari said: “In 2016, oil related revenues are expected to contribute N820 billion. Non-oil revenues, comprising Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies, will contribute N1.45 trillion. Finally, by enforcing strict compliance with the Fiscal Responsibility Act, 2007 and public expenditure reforms in all MDAs, we have projected up to N1.51 trillion from independent revenues.”
With N1.8 trillion devoted to capital projects, which represents 30 percent of the budget and more than double the N557 billion appropriated in 2015, President Buhari highlighted sectors that would receive much-needed attention in the coming year.
“This increased capital expenditure commits significant resources to critical sectors such as Works, Power and Housing – N433.4 billion; Transport – N202.0 billion; Special Intervention Programs – N200.0 billion; Defence – N134.6 billion; and Interior – N53.1 billion. These investments in infrastructure and security are meant to support our reforms in the Agriculture, Solid Minerals and other core job creating sectors of our economy.”
On the recurrent expenditure, the President assured that sectors rendering critical government services will be significantly funded.
“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, police men, fire fighters, prison service officers and many more critical service providers are paid competitively and on time,” he added.
The President also assured that government is determined to cut waste and ensure that every money spent is for the purpose meant for, a move that necessitated the zero based budget system, “which ensures that resources are aligned with government’s priorities and allocated efficiently.”
The government, he further stated, will enhance the utilisation of platforms that promote accountability and efficiency, such as Government Integrated Financial Management Information Systems, GIFMIS, Integrated Personnel Payroll Information System, IPPIS, Efficiency Unit, and the soon to be introduced Continuous Audit Process, CAP.
He assured that the ongoing effort to curb corruption, which he said is partly responsible for the economic challenges the country currently faces, will not be slowed down.
“We will pursue the recovery of everything that belongs to the people of Nigeria. No matter where it is hidden. No matter how long it will take,” the President noted.
As part of the strategy to create jobs, the President said in implementing the budget, emphasis will be laid on areas that have the potential to create jobs, including “reduction in tax rates for smaller businesses as well as subsidized funding for priority sectors such as agriculture and solid minerals.”
Also, 500, 000 unemployed graduates are expected to be employed, trained and deployed to primary schools in the coming years to enhance quality education, particularly in the rural areas. This will be done in partnership with both state and local governments.
The President also apologised to Nigerians for the hardship experienced with regards to fuel supply, describing the development as unfortunate. He blamed the problem on market speculators and people resistant to a change in how things are done.
While assuring that government is working on ending the crisis, he added that there is no plan to increase the pump price petrol, even though he suggested that the current price is temporary.
“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 attain efficiency savings that will enable PPPRA to keep the selling price for all marketers of petrol at N87 per liter for now,” he explained.
Addressing the financial crisis in the foreign exchange market, President Buhari said the problem is due to the inadequacy in supply of foreign exchange to those who need it but said the Central Bank of Nigeria is working to ease the pressure.
“To the investors, business owners and industrialists, we are aware of your pains. To the farmers, traders and entrepreneurs, we also hear you. The status quo cannot continue. The rent seeking will stop. The artificial current demand will end. Our monetary, fiscal and social development policies are aligned.”
While admitting that trust in government is low due to failed promises of the past, the President said his government is aware of the challenge it faces but assured that with a team of dedicated Nigerians, he is confident that the problems facing the country can be overcome.
“I know many people will say “I have heard this before”. Indeed, trust in Government, due to the abuse and negligence of the past, is at an all-time low. This means we must go back to basics. Our actions will speak for us. My team of dedicated, committed and patriotic Nigerians is well aware of the task ahead and I can assure you that we are taking on the challenge.
“We will not betray the trust reposed in us. We will welcome and be responsive to your feedback and criticisms.
“We are here to serve. And indeed, Nigerians will get the service they have longed for and which they rightly deserve,” he assured.