Expectations rising on economy as NASS approves N6.06trn for 2016 fiscal year

The proposed stimulation of economic activity and growth with N350 billion by the government will soon come to fruition as the National Assembly has approved the 2016 budget with a reduction of over N17billion.

This follows separate passage of this year’s appropriation bill, as the National Assembly approved a budget of N6,060,677,358,277. The amount is lower than the N6,077,680,000,000 submitted by President Muhammadu Buhari to a joint session of the National Assembly on December 22, 2015.

The budget was specifically reduced by N17,002,641,773.

Passage of the budget brings to an end, months of controversy, even as the National Assembly adjourned till April 12, 2016.

Kemi Adeosun, finance minister, had said on Tuesday that the Federal Government was set to pump at least N350 billion  to stimulate economic activity and growth in the economy.   

“From the Federal Ministry of Finance, in anticipation of the approval of the budget , we have virtually lined up about N350billion which we would be pumping into the Nigerian economy in the forthcoming months.

“We explained our rational and the processes that we have put in place, safeguards to ensure that this money actually achieves the desired objective, which is to stimulate the economy.

“We are already discussing with some of the contractors who will be paid these monies and the objectives from the overall criteria are how many Nigerians would be re-engaged. We are specifically looking at contractors who have laid off staff and how many Nigerians are you going to put back to work as a result of this money that we are planning to release and we believe that this would bring significant economic activity” Adeosun said.

“Indeed Nigeria can spend its way out of a slump or a supposed recession. The core is channelling the spending to sectors or areas with positive repeal effect on economic growth and development,” Abiodun Keripe, head of research and strategy at investment firm Elixir Investment Partners Limited, said.

The budget was predicated on an oil benchmark price of $38 per barrel, crude oil production of 2.2million barrels per day and exchange rate of N197 to US$1.

  Other highlights include: Statutory transfers N351,370,000,000; Debt Service: N1,475,320,000,000; Recurrent Expenditure N2,646,389,236,196; Capital Expenditure N1,587,598,122,031; Fiscal Deficit N2,204,936,925,711 and Deficit/GDP 2.14 percent.

  Explaining the reason for the reduction by N17billion, Danjuma Goje, chairman, Senate Committee on Appropriation , admitted that the 2016 budget proposal contained a number of errors of omission, particularly in the area of personnel cost.

The lawmaker said the Committee filled some of the gaps but that the exercise could still raise serious concerns in the course of the year because there were many outstanding cases.

  “The 2016 Appropriation Bill contained a number of omissions, particularly in the area of personnel cost. Though the Appropriation Committees has filled some of the gaps, there are  many outstanding cases which could raise serious concern in the course of the year,” he told senators while presenting the report of the committee.

The reduction, he noted, is the first time the national budget was reduced by the National Assembly since 1999.

  Goje said: “In view of the revenue and general economic challenge confronting the nation, the committee had in a landmark decision not witnessed since the advent of the present democratic dispensation  in 1999, reduced the size of the aggregate expenditure and consequently reduced the total  recurrent, deficit and borrowing plans.”

According to the report, the Federal Ministry of Works, Power and Housing received the highest allocation of N422,964,928,495 under capital expenditure; followed by the Ministry of Transportation with N188,674,679,674; Defence N130,864,439,542; Interior N61,713,279,496; Agriculture N46,173,963,859.

Others are: Ministry of Water Resources N46,081,121,423; Education N35,433,487,466; National Security Adviser N32,084,085,624 with FCTA N29,297,122,872.

From the N1,173,407,694,354 approved for the Executive, Code of Conduct gets N4,889,127,358; Code of Conduct Tribunal N1,055,560,066; Federal Character Commission N984,780,230; Federal Civil Service Commission N16,841,017; National Population Commission N4,411,606,590; Police Service Commission N269,628,000 while Revenue Mobilisation, Allocation and Fiscal Commission gets N19,883,417.

Also, from the total sum of N402,542,999,999 earmarked under capital supplementation, the sum of N2 billion is for National Job creation scheme/graduate internship scheme; N527,259,306 for Quick Wins – completion of 2008 and 2009 projects; N3 billion for NELMCO (outstanding liabilities); N3.432 billion for Bulk Trader; N10 billion for Sinking fund for infrastructural development; N1.5 billion for Special inititaitve for women participation in agriclutre, water, sport, communication technology/partnership with States and Local Governments women Development Centres.

Others include: N1billion for GIFMIS capital; N2.5 billion for 2011 election violence and civil disturbances (damage done to public properties and places of worships); N1 billion for sport development; N8,267,215 for Special intervention MDGs (verification of assets and liabilities); N609,037,225 for transition to SDGs while additional sum of N3,378,044,922 is for SDG programmes; N581,777,918 is for SDG monitoring and evaluation; N474,533,376 is for Consultancy fees, survey and short term and long term studies; N427,080,038 for Communication and advocacy (SDG); N500 million for Federal Ministry of Finance: special Programme for improving efficiency; N5.5 billion for capital exigencies/adjustment to capital cost; N4 billion for capital development of NILS; N1 billion for National Assembly clinic; N500 million for infrastructural master plan under Ministry of Budget and Planning; N2 billion for Nigeria Mortgage Refinancing Company (NMRC) while N100 billion for Special intervention/constituency projects.

Through the Service Wide Vote worth N188,105,681,152; the sum of N33,290,715,716 is for payment of pensions and gratuities under the office of the Head of Civil Service (Civil service); N67,629,949,771 for military pensions and gratuities; N7,412,463,652 for Police pensions and gratuities; N8.420 billion for Customs, Immigration and Prisons Pension office; N14,343,326,479 for Universities’ pensions including arrears; N26,756,754,031 for Pensions of Nigerian Railway Corporation; N2,257,298,262 for Pre-1996 NRC pensions; N7,643,405,446 for Department of State Security pensions and arrears; N3,709,146,567 for Nigeria Intelligence Agency pensions and arrears while N16,642,621,229 is for NELMCO.

Also provided for in the budget are: N300 billion for special intervention (recurrent); N20 billion for amnesty programme, N8 billion for Lafiya Dole; N4 billion for IPPIS capturing; N1 billion for service wide training of budget/planning officers on GIFMIS budget preparation system as well as monitoring and evaluation of all projects nationwide; N2 billion for payment of outsourced services; N2.5 billion for provision of security equipment for selected public buildings; N4 billion for Employees Compensation Fund; N500 million for election logistics support; N12 billion for Pilgrims support services; N12 billion for contingency; N3,599,600,000 for margin for increases in costs and recurrent adjustment costs; N8.5 billion for external financial obligations; N3.5 billion for assessed contribution to African Union and others; N6 billion for contribution to international organisations including WAEC international; N33,597,400,000 for public service wage adjustment for MDAs (Including arrears of promotion and salary increases); N3 billion for outstanding payments to health professionals; N13 billion for operations – internal for armed forces; N10.255 billion for Improved remuneration package for Nigerian Police including 2014 and 2015 shortfalls and N400 million for 35th annual general meeting and symposium of Shelter-Afrique in Nigeria in June 2016.

In a press conference by the Joint Committees on Appropriation, Goje alongside his counterpart in the House of Representatives, Abdulmumin Jibrin, advised that subsequent budgets should be submitted in strict compliance with the provision of the Fiscal Responsibility Act to enable the National Assembly conduct proper engagement and conclude the budget processes in good time.

He disclosed that even though the budget was reduced, the N500 social intervention fund was not tampered with.

Patrick Atuanya, KEHINDE AKINTOLA & OWEDE AGBAJILEKE