Inside the 2016 N6.06 trillion ‘budget of change’

President Muhammadu Buhari had presented the budget to the National Assembly on Tuesday, December 22, with a proposal to spend N6.07 trillion.
The budget was based on a crude oil benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day. The capital expenditure was put at 30 per cent of the fiscal plan, while 70 per cent would go for the recurrent.

Gross Domestic Product (GDP) growth rate for the year was projected at 4.37 per cent. With expected revenue of N3.86 trillion, the budget profile is N2.22 trillion deficit, equivalent to 2.16 per cent of country’s GDP. The deficit will be financed by a combination of domestic borrowing of N984 billion and foreign borrowing of N900 billion, totaling N1.84 trillion.

Domestic debt service would gulp N1.36 trillion while N113 billion was set aside for sinking fund towards the retirement of maturing loans.
Specifically, oil related revenues were estimated at N820 billion, against non-oil income of N1.45 trillion, while projected independent revenues was put at N1.51 trillion.

The capital expenditure of N1.8 trillion allocation to ministries include Works, Power and Housing N433.4 billion; Transport, N202.0 billion; Interior, N53.1 billion; Special Intervention Programmes, N300 billion; Education, N369.6 billion; Defence, N294.5 billion; Health, N221.7 billion; and Interior, N145.3 billion.

There is a proposal of a nine per cent reduction in non-debt recurrent expenditure, from N2.59 trillion in the 2015 budget to N2.35 trillion this year.

The budgeted N300 billion for special intervention programmes takes the total amount for non-debt recurrent expenditure to N2.65 trillion. The Efficiency Unit set up by the current administration, together with effective implementation of GIFMIS and IPPIS, will drive a reduction of overheads by at least seven per cent; personnel costs by eight per cent; and other service wide votes by 19 per cent.