FG Unveils Six Trillion Naira Budget For 2016

Based on a projected crude oil price of $38 per barrel and production of 2.2 million barrels per day, the Federal Government has proposed a budget of six trillion naira for the 2016 fiscal year.

Briefing State newsmen after an emergency meeting of the Federal Executive Council, FEC, presided over by President Muhammadu Buhari at the Presidential Villa, Abuja on Monday , Minister of National Planning and Budget, Udoma Udo  Udoma, said that in view of the current economic realities, FEC predicated the budget on $38 per barrel of crude oil as benchmark for the Medium Term Expenditure Framework, MTEF.

His words :

“At today’s Federal Executive Council meeting, the council approved the Medium Term Expenditure Framework, MTEF, which sets out the policies of government over the next three years. It sets out the fundamental economic underpinning of the budget.

“The highlights are as follows: we projected and we are working with $38 crude oil price, We consider that to be very conservative but because of the uncertainty, we felt that we should start with a conservative crude oil price.

“We are also working with 2.2 million barrels a day production. We believe it is achievable, particularly because with the possible passage of the Petroleum Industry Bill  (PIB) which we are working to achieve, we believe that the production figure is a modest figure that we should be able to produce something higher than. 
“And so next year, we are looking at an expansionist budget. We are looking at a budget that will be N1 trillion more than last year. So, we are looking at a budget of about N6 trillion.

“Last year’s budget, including the supplementary, was about N5 trillion. So, we are looking at a N6 trillion budget. All the increases actually will be spent on capital, because there is the need to increase the capital because of the infrastructure issues that we have to address.

“We are projecting almost 30 percent capital project, up from the 15 per cent or so that is in the current budget. We will try and reduce overheads, but keep personnel cost in check. We are not going to adjust it by much, but we are expecting some savings from the IPPIS system which we are using. So we are not cutting anybody’s salary, everybody will get their salaries.

“Following from this, the MTEF will be submitted to the National Assembly, and we expect a feedback from them, thereafter we will be working to try and get the budget finalized. It is when the budget is finalized that you will really see the details of what we intend to do. This is just a medium term economic framework.”