2016 Budget: FG Identifies Priority Areas

• Earmarks N940m for grazing reserves, N284.1bn for job creation, school feeding
• Rules out VAT increase
• Unveils strategic implementation plan as capital releases begin today
Ndubuisi Francis in Abuja
With a budgetary provision of N940 million, the federal government has finally settled for grazing reserves in what appears a potent option to resolve the seemingly intractable problem of bloody clashes between Fulani herdsmen and various communities in the country.

Under its N500 billion Social Intervention Projects, the government is to also channel a total of N284.1 billion into job creation and school feeding as it unveiled what it called a Strategic Implementation Plan to realise the objectives of the 2016 Budget

A breakdown of N284.1 billion shows that N191 billion is earmarked for job creation, while N93.1 billion will be channeled into feeding an estimated 5.5 million school children across the country for 200 school days.

The Minister of Budget and National Planning, Senator Udona Udo Udoma, who presented the 2016 Budget highlighs in Abuja yesterday, said the Social intervention projects are in five areas, including job creation, school feeding, conditional cash transfer, enterprise programme, and STEM education grant.

Giving the breakdown of the “Budget of Change’, Udoma said it was designed to actively pursue macroeconomic policies and growth strategies that will reflate the economy by investing in key infrastructure and social development, adding that it is anchored on six pillars, including economic reforms, infrastructure, social development, Governance and security, Environment as well as states/regional development.

The key assumptions of the budget, the minister noted, are underpinned by an oil production of 2.2 million barrels per day, a benchmark oil price of N438 per barrel, and an average exchange rate of N197 per dollar.

Based on these assumptions, Udoma pointed out that the budget envisages a net distributable revenue of N5. 72 trillion, comprising mainly the Federation Account Revenue of N4.303 trillion, and N1. 416 trillion from the Value Added Tax (VAT) Pool Account.

The N6.06 trillion budget, the minister added, represents a 35 per cent increase over that of 2015, with a Statutory Transfer (inclusive of the N157 billion capital component) standing at N351.37 billion; Debt Service (including Sinking Fund provision) N1.48 trillion, and Recurrent (non-debt) Expenditure N2.65 trillion.
Capital Expenditure (excluding share of Capital Statutory Transfers is N1.59 trillion while Capital Expenditure (including share of capital expenditure in Statutory Transfer) is N1.75 trillion.

Some of the key sectoral allocations in the 2016 Budget include Power and Works and Housing N456.93 billion; Transportation N202.34 billion; Defence N443 billion; Interior (including Police) N513.65; Education N403 .16 billion.

Others are Health N250.06 billion; Agriculture and Rural DevelopmentN75.80 billion; Solid Minerals N16N16.73 billion; Youths & Sports Development N75.79 billion; Water Resources N53.30 billion while Special Intervention Programmes got a vote of N500 billion.

Udoma stated that the government would actively support the use of public private partnerships in the development of infrastructure, adding that: “We are encouraging our ministers to explore concessioning arrangements for airports, major roads and other infrastructure projects.”

He disclosed that as part of efforts to encourage private sector participation, the government was working towards establishing infrastructure fund, which is anticipated to raise up to a $25 billion within three years.
Udoma stated that major projects to be covered by the budget are over 40 spread across the country, noting that N35.6 billion has also been earmarked for 1.973 blocks of 7,068 housing units in the six geo-political zones.

On agriculture, Udoma said N940 million would be channeled into the development of Strategic Grazing Reserves while another N90 million is for Price Stabilisation/Buy=back/Price Gurantee Scheme, just as NN939.7 billion is for extension services
He declared government’s determination to change the structure of the Nigerian economy once and for all through a single-minded implementation of the budget, adding that a Strategic Implementation Plan (SIP) for implementing the budget had been put in place.

Udo-Udoma said the budget would be implemented under six major strategic invention areas in the SIP to revamp the economy, adding that: “The plan will place the economy on the upward trajectory as it is repositioned for change, inclusive growth and sustainable development.’’

The government, he noted, would achieve appropriate Foreign Exchange Regime and increase low interest lending to the real sector, adding that the federal Government had set deadlines to achieve self-sufficiency and net export of a certain number of agricultural produce and items to diversify the economy.

According to him, the country is expected to attain self-sufficiency in rice –by 2018, tomato paste this year, wheat 2019 and increase local production of maize, soya, poultry and livestock.
Udoma added that the government would optimise 7,000 megawatts installed power generation capacity and provide facilities required to transmit and distribute it in one year, stressing that it would distribute the capacity through privatisation and concessioning under its priority strategies in power, rail and road sectors.

“It will ensure that tariff includes all costs of transmission, generation and gas at new price and that DISCO cost required operating, maintaining and upgrading distribution network.” According to him, “The government will complete the Kaduna-Abuja and the Ajaokuta-Warri rail lines scheduled for 2016; revise the National Rail Master Plan and finalise negotiations for Lagos-Kano and Lagos-Calabar rail projects.’’

“It will ensure delivery of 2,193 kilometres of federal roads across 31 projects scheduled for 2016 (through public works and other interventions) and explore Private Public Partnership options for completing other projects. It will also ensure the completion of the rehabilitation of four airports (Abuja, Kano, Lagos and Port Harcourt) and explore option for concessioning of the airports.

“The government will undertake the construction of 3,552 Mixed Housing Units as pilot scheme in the 36 states and FCT under the National Housing Programme in a secured and planned environment,’’ the minister said pointing out that the government would adopt and execute a comprehensive National Oil and Gas Master Plan as the roadmap for petroleum industry development, privitisation and governance.

According to him, the government has decided to work with the National Assembly to pass a revised Petroleum Industry Bill to privatise NNPC and ensure the regulation of the downstream sector.
A three-year deadline has also been set for self-sufficiency in refined petroleum products and become a net exporter of petroleum products, Udoma disclosed

On ease of doing business, Udoma stated that the federal government would work towards moving Nigeria 20 places up and fast-track visa application and issuance processes.assured Nigerians that the government would ensure effective implementation of the budget.

He disclosed in an interview journalists shortly after the budget highlights, the minister disclosed that the federal government would commence capital releases from today, adding that the N350 billion earmarked for special projects would be made available to contractors as soon as they show proof of project execution.