Federal Government said yesterday it would commence part disbursement of funds allocated for capital Newsprojects in the 2016 budget today. Minister for Budget and National Planning, Senator Udo Udoma, who disclosed this during the public presentation of the budget in Abuja, said the fund to be released by the Ministry of Finance would be used to kick-start the execution of capital projects.This represented a marked departure from the past when budgetary disbursements were usually delayed for months after a budget had been signed by the President He said while it was not possible for the entire capital budget to be released at once as not all the projects would be ready for execution, government would make sure that the processes for the execution of projects are fast-tracked to ensure improved performance of capital budget this year.
“We are ready to kick-start the implementation of the budget and by tomorrow (Friday), some releases will be made for capital projects that are ready for execution,” he said. Udoma explained that the need to ensure speedy release of the fund for capital projects became imperative as a strategic option of stimulating economic activities and repositioning the economy on the path of sustainable growth.
The minister explained that the 2016 budget was anchored on six pillars of economic reforms, infrastructure, social development, governance and security, environment as well as states/regional development. The key objectives of the Appropriation Act are, ensuring a stable macroeconomic environment for real sector development; investments in critical infrastructure, science, technology and innovations that will enhance productivity and lower costs of doing business; creating a significant number of jobs to reduce unemployment and underemployment especially among the youth. Others are protecting the poor and vulnerable by special intervention programmes and building an economy that is less vulnerable to oil price shocks by vigorously pursuing economic diversification. According to him, government will focus more on non-oil revenue for funding the budget, stressing.
He said: “The 2016 budget envisages a net distributable revenue of N5.72trn comprising of main federation account revenue of N4.303tron and N1.416trn from the Value Added Tax, VAT, pool account.” Giving further highlights of the budget, the minister said that of this distributable revenue, “net oil receipts amount to N1.48trn or 25 per cent, while net non-oil receipts accounts for the balance of N4.22trn or 75 per cent.” He hinted that government budgeted revenue was projected at N3.855trn to be largely contributed by Internally Generated Revenue, IGR, of N1.51trn. Government projected to rake in substantial part of the non-oil revenue from Corporate Tax; VAT and dividend from government corporations and independent revenue sources, he noted. Udoma explained that by government’s projections, corporate tax would fetch N1.88trn as against the N1.42trn raked in from the source last year, while VAT yields was projected at N1.48trn compared to the N1.28trn in 2015.
He explained further that increase in projected VAT revenue would be based on broadening the collection net to capture items that are VATable but had not been captured. Some of the major allocations to key sectors in the budget are, Power, Works and Housing (N456.93bn), Transportation (N202.34bn), Defence (N443.07bn), Interior (N513.65bn), Education (N403.16bn), Health (N250bn), Agriculture (N75.8bn), Solid Minerals (N16.73bn) and Special Intervention Programmes (N500bn). The minister disclosed that to ensure robust performance of the budget, government had designed a Strategic Implementation Plan, SIP.
He listed the priority actions for implementation under the initiative as an appropriate foreign exchange regime; increase low interest lending to the real sector; maintain capital spending at a minimum of 30 per cent, complementing this with funds from the infrastructure fund for commercial projects; and intensify the implementation of the public financial management reforms to grow revenue and cut costs. Others are, maintain a sustainable debt manageMay fiscal incentives to improve collections; intensify the fight against corruption by increasing transparency, accountability and compliance with law and order; intensify public procurement reforms in projects to obtain value for money and cut cost; sustain the fight against insurgency, kidnapping and other violent crimes, terrorism, cyber-crimes, piracy, oil theft and illegal mining activities.
Intensify the reorientation of the populace through integrity campaigns. According to him, other policy actions set for attention in the fiscal year also include, to implement measures to achieve self sufficiency and become net exporter of a certain Agric items: rice -2018, tomato paste-2016, wheat-2019. Other are, to increase local production of maize, soya poultry and livestock, so as to achieve self sufficiency: and to revitalize and expand argo-allied processing to intensify local production and processing of cassava, cocoa, cashew, fruits and sesame seed, amongst others. The minister also assured the readiness of the Executive to work with the National Assembly on the passage of a revised Petroleum Industry Bill, PIB, to give effect to the National Oil and Gas Masterplan, NOGM, and resolve fiscal and governance issues of the sector, including setting a timeframe for the privatisation of NNPC and refineries to achieve total deregulation of the downstream petroleum sector and eliminate gas flaring.
Udoma said the budget deficit funds would be raised roughly equally from domestic and foreign sources, adding that the government has “decided to source from international sources so as not to rely exclusively on domestic borrowing, which may have the effect of crowding out the private sector.”
Another major highlight of the budget is the plan of government to ensure Nigeria moves 20 places up the Ease of Doing Business rankings by implementing fast track measures for business approvals, acquisition of land titles, amongst others. Nigeria is currently ranked 169 out of 189 countries by the World Bank.
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