On Monday, December 7, 2015, Nigeria’s President Muhammadu Buhari presided over the Federal Executive Council (FEC), where a sum of N6.04 trillion was approved as Nigeria’s expenditure for the 2016 budget under the Medium Term Expenditure Framework (MTEF).
Eyebrows were raised and observers believe the budgetary provisions far outweigh the country’s previous budgets, in fact, it remains the highest by any Nigerian leader ever.
But, there are certain conditions responsible for this rise (of about 15%) in the budget, as well as certain changes to the ‘business as usual’ budgets of Nigeria, believed to be Africa’s largest economy.
Naij.com has identified five stunning facts every Nigerian should know about as the west African nation begins its year-long spending.
1. No more kerosene subsidy
Although not clearly stated, the president has tacitly done away with kerosene subsidy in the new expenditure of the Nigerian nation as there was no clear provision for it in the budget submitted to the council. Although it is yet to be seen how this will improve the nation’s economy, there are indications that this new move by the president, who has been increasingly criticised for his late submission of the budget, will go a long way to ensuring that the country does not spend as much as it used to in that sector of the economy.
2. Two sources have been identified for funding of the budget
After the approval of the president’s budget presented at the FEC, the minister of budgetary and national planning, Senator Udo Udoma, said that the country is looking at obtaining funds from two different sources.
He told journalists that Nigeria is looking at increasing non-oil revenue. This means that more money will be demanded from the various government agencies, and their revenues will be closely monitored by the federal government with a view to getting more money from President Muhammadu Buhari’s anti-corruption war will also serve as a source of funding for the budget.
The minister also said that the recurrent budget for this year will be narrowed down drastically as the country is looking at a situation where savings from overheads take serious prominence.
Aside from these two major sources identified to fund the budget for next year, President Buhari’s anti-corruption battle which is toughening up by the passing of each day, and is expected to be responsible for about N350.33 billion in 2016.
3. Four key areas top the budgetary allocations
Power, health, education and agriculture are foremost in the president’s mind for next year’s spending as they have taken on a greater priority.
Signalling a diversification of the economy away from its dependence on oil, the agriculture sector, alongside power, takes top spot in the budget, a situation which the country has not witnessed in the past 10 years.
Both sectors are likely to gulp a total of N200 billion each, which is about 20 percent of the total budget.
This clearly shows President Buhari’s reason for his appointment of the former Lagos state governor, Babatunde Raji Fashola to head the power sector which has suffered huge setbacks in the country and his (Fashola’s) subsequent meeting with Dr Ibe Kachikwu of the petroleum resources ministry.
President Muhammadu Buhari seems to have entrusted so much into the hands of Babatunde Fashola
It is believed that the president made the appointment based on his belief that Fashola would not hesitate to step on toes when he swings into full action in the coming years.
And since the president already stated that it is unwise and unsafe for the country to keep depending on the oil and gas sector for survival, the agriculture sector, under the watchful eyes of Chief Audu Ogbeh and Senator Heineken Lokpobiri, will also have a major role to play in the diversification of the economy. 4. Nigeria already made provisions to borrow N1.835.88 trillion
Apart from domestically generating funds to finance the expenditure for the next fiscal year, the budget indicated that the present federal administration is to borrow the sum of N1.835.88 trillion. This is further broken down thus: the sum of N1.2 trillion would be borrowed domestically while foreign borrowing would be pegged at N635.88 trillion for the period under review.
Nigeria will need to borrow N1.8trillion to fund the budget next year.
Although the fresh policies and measures taken by the president are in a bid to encourage the rapid diversification of the Nigerian economy away from its current over-dependence on the oil and gas sector, the nation will still have to seek assistance on how to go about some of its projects.
The capital projects (the country’s focus for next year), rather than recurrent expenditure, will take about 30% of the entire allocation.
5. Oil price benchmark for 2016 is fixed at $38 per barrel
Over the last two years, oil prices have been consistently inconsistent, with Nigeria, Africa’s leading oil exporter and producer, suffering a huge loss during this period.
This is apparently responsible for the cut in the oil price to an all-time low of $38 per barrel of crude oil with a projection of 2.2 million production barrels per day, according to the framework for the budget. Although the country is not totally deviating from oil production and exportation as one of its key areas, the over-dependence on the sector and the corruption linked to it in recent years, especially with the infamous indictment of former petroleum minister, Mrs Diezani Alison-Madueke in a $20 billion fraud, will seemingly reduce in the coming years.
Thus, expectation from the sector is in line with the economic realities of the moment within the country.

Last Days

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[size=16]Ok! "They say heaven helps does who help them selves".
It is high time our leaders seat up & do the right thing at the right time. That will go along way in shaping the life & attitudes of the follower from bad to good.

NIGERIA SHALL SHINE AGAIN [/size]

Hope