Fg Gives Budget Breakdown, N2.65trn For Recurrent, N3.34trn For Capital Projects As Interior, Works Ministries Lead
SAN FRANCISCO, May 12, (THEWILL) – The Federal Government has set aside N2.65 trillion for recurrent (non-debt) expenditure and N3.34 trillion for capital projects in the 2016 budget of N6.06 trillion signed by President Muhammadu Buhari on May 6.
In the budget breakdown presented by the Minister of Budget and National Planning, Sen. Udoma Udo Udoma, in Abuja on Thursday, the FG also allocated N1.48 trillion to debt servicing and N351.37 billion to statutory transfers inclusive of N157 billion capital component.
The sectoral allocation in the 2016 budget showed that the ministry of interior got the highest allocation of N513.65 billion, followed by Social intervention programme with N500 billion as well as Works, Power and Housing with N456.93 billion.
Transportation got N202.34 billion, Defence got N443.07 billion, Education got N403.16 billion; Health got N250.06 billion, while Youth and Sports got N75.79 billion.
The lowest allocations were to Solid Minerals with N16.73 billion, Water Resources with N53.30 and Agriculture with N75.8 billion.
Udoma announced that the 2016 budget was premised on oil production of 2.2 million barrels per day at a benchmark price of 38 dollars per barrel and average exchange rate of N197 to U.S. dollar.
He said that based on the assumptions, the budget envisaged a net revenue of N5.72 trillion comprising main revenue of N4.30 trillion and VAT proceeds of N1.42 trillion.
Accordingly, he said that while the states and local governments would be allocated N3.24 trillion from the pool, the FG would retain N2.48 trillion.
Udoma said that the administration would actively support the use of Public-Private Partnership (PPP) in the development of infrastructure and had encouraged the ministers to explore concessioning arrangements for airports, major roads and other infrastructure.
He said that as part of the efforts to encourage PPP, an infrastructure fund would be established where government anticipated a revenue of 25 billion dollars in three years.
The minister said that as a result of the expansive fiscal spending directed at reflating the economy, the fiscal deficit projection stood at N2.2 trillion (about 2.14 per cent of the GDP).
According to him, the deficit will be financed mainly by borrowing of about N1.8 trillion from domestic and foreign sources.