Image result for President Muhammadu Buhari pic
I am honoured and privileged to present the 2016
#Budget proposal. This is my first address before
this joint session of the National Assembly. I have
come here today, not only to address members of
the National Assembly, but also to speak directly to
the men and women who placed us here.
2. I know the state of our economy is a source of
concern for many. This has been further worsened
by the unbridled corruption and security challenges
we have faced in the last few years. From those
who have lost their jobs, to those young people who
have never had a job, to the people in the North
East whose families and businesses were
destroyed by insurgents, this has been a difficult
period in our nation’s history, lessons that we must
not forget or ignore, as we plan for the future.
3. By June 2014, oil prices averaged $112 per
barrel. But as at today, the price is under $39 per
barrel. This huge decline is having a painful effect
on our economy. Consumption has declined at all
levels. In both the private and public sectors,
employers have struggled to meet their salary and
other employee related obligations. The small
business owners and traders have been
particularly hard hit by this state of affairs.
4. Fellow Nigerians, the confidence of many might
be shaken. However, I stand before you today
promising that we will secure our country, rebuild
our economy, and make the Federal Republic of
Nigeria stronger than it has ever been.
5. The answers to our problems are not beyond us.
They exist on our farmlands; our corporations; in
the universities in the hearts and minds of our
entrepreneurs; through the gallantry of our Armed
Forces; and the resolute spirit of Nigerians,
especially the youth, who have refused to give up
despite all the obstacles confronting them.
6. This Budget proposal, the first by our
Government, seeks to stimulate the economy,
making it more competitive by focusing on
infrastructural development; delivering inclusive
growth; and prioritizing the welfare of Nigerians. We
believe that this budget, while helping industry,
commerce and investment to pick up, will as a
matter of urgency, address the immediate problems
of youth unemployment and the terrible living
conditions of the extremely poor and vulnerable
7. In the medium to longer term, we remain
committed to economic diversification through
import substitution and export promotion. This will
build resilience in our economy. It will guarantee
that the problems we have today, will not confront
our children and their children. This shall be our
legacy for generations to come.
2015: A Year of Global and Domestic Challenges
8. Today, it is widely acknowledged that the global
economy has slowed down. This is particularly the
case with emerging markets such as Nigeria.
However, despite the weak emerging market
growth rates, our domestic security challenges,
declining oil prices, and the attendant difficulties in
providing foreign exchange to meet market
demands, the Nigerian economy grew by 2.84% in
the third quarter of 2015.
9. We have, and will continue to implement
strategies that will maintain macroeconomic
stability and manage the oil price shocks we are
10. Upon the inauguration of this administration on
29th May 2015, we engaged key stakeholders from
various sectors of our economy and interfaced with
the heads of Ministries, Departments and Agencies
(MDAs) in order to understand the true state of our
nation. What we found prompted us to take certain
strategic decisions.
11. On the economy, we injected new leadership at
the helm of our revenue generating agencies
including the Federal Inland Revenue Service (FIRS),
Nigerian National Petroleum Corporation (NNPC),
Nigerian Communications Commission (NCC), and
the Nigerian Customs Service (NCS). We
implemented the Treasury Single Account (TSA)
which, so far, has provided greater visibility of
Government revenues and cash flows. We
intervened to support States to navigate their fiscal
challenges by restructuring their commercial bank
loans and by providing facilities to enable them to
pay salary arrears.
12. We have demonstrated a strong will to fight
corruption. I am sure you will agree that the sheer
scale of corruption and impunity of the past explains
in part, the economic challenges we now face. On
these initiatives, and the many more to come, we
shall not be deterred. We will pursue the recovery
of everything that belongs to the people of Nigeria.
No matter where it is hidden. No matter how long it
will take.
2015 Budget Performance
13. Distinguished and honourable members of the
National Assembly, I now present a review of the
2015 Budget. That Budget was based on a
benchmark oil price of $53 per barrel, oil production
of 2.28 million barrels per day and an exchange rate
of N190 to the US$.
14. The projected revenue was N3.45 trillion, with
an outlay of N4.49 trillion, implying a deficit of N1.04
trillion. Due largely to under-provisioning by the
previous administration for fuel subsidy and the
costs required to support the military operations in
the North East, the Government had to obtain
National Assembly’s approval for a supplementary
budget of N575.5 billion. I take this opportunity to
thank all members of the National Assembly for the
prompt passage of that Bill.
2016: Budget Assumptions
15. After reviewing the trends in the global oil
industry, we have set a benchmark price of $38 per
barrel and a production estimate of 2.2 million
barrels per day for 2016. We have focused on non-
oil revenues by broadening our tax base and
improving the effectiveness of our revenue
collecting agencies.
16. Also, with the full implementation of the
Treasury Single Account, we expect significant
improvements in the collection and remittance of
independent revenues. To further support the drive
for increased remittances, we will ensure that all
MDAs present their budgets in advance, and remit
their operating surpluses as required by section 22
of the Fiscal Responsibility Act.
17. We are determined to ensure that our resources
are managed prudently and utilized solely for the
public good. To set the proper tone, one of our early
decisions was the adoption of a zero based
budgeting approach, which ensures that resources
are aligned with Government’s priorities and
allocated efficiently. This budgeting method, a clear
departure from previous budgeting activities, will
optimize the impact of public expenditure.
18. In addition to the proper linkage of budgeting to
strategic planning, we are enhancing the utilization
of the Government Integrated Financial
Management Information Systems (GIFMIS) to
improve financial management. The recently
established Efficiency Unit is working across MDAs
to identify and eliminate wasteful spending,
duplication and other inefficiencies. We engaged
costing experts to scrutinize the 2016 budget
proposals. They have already identified certain cost
areas that can be centralized for economies to be
19. We have directed the extension of the Integrated
Personnel Payroll Information System (IPPIS) to all
MDAs to reap its full benefits. We will also
strengthen the controls over our personnel and
pension costs with the imminent introduction of the
Continuous Audit Process (CAP). These initiatives
will ensure personnel costs are reduced. Our
commitment to a lean and cost effective
government remains a priority, and the initiatives
we are introducing will signal a fundamental change
in how Government spends public revenue.
2016: Laying the Foundation for Sustainable Growth
20. The 2016 budget, as outlined, is designed to
ensure that we revive our economy, deliver
inclusive growth to Nigerians and create a
significant number of jobs.
21. We aim to ensure macroeconomic stability by
achieving a real GDP growth rate of 4.37% and
managing inflation. To achieve this, we will ensure
the aligning of fiscal, monetary, trade and industrial
22. As we focus on inclusive growth, we are
conscious of the current rate of unemployment and
underemployment. This is a challenge we are
determined to meet; and this budget is the platform
for putting more Nigerians to work. I can assure
you that this administration will have a job creation
focus in every aspect of the execution of this
budget. Nigeria’s job creation drive will be private
sector led. We will encourage this by a reduction in
tax rates for smaller businesses as well as
subsidized funding for priority sectors such as
agriculture and solid minerals.
23. As an emergency measure, to address the
chronic shortage of teachers in public schools
across the country, we also will partner with State
and Local Governments to recruit, train and deploy
500,000 unemployed graduates and NCE holders.
These graduate teachers will be deployed to
primary schools, thereby, enhancing the provision of
basic education especially in our rural areas.
24. We also intend to partner with State and Local
Governments to provide financial training and loans
to market women, traders and artisans, through
their cooperative societies. We believe that this
segment of our society is not only critical to our
plan for growing small businesses, but it is also an
important platform to create jobs and provide
opportunities for entrepreneurs.
25. Furthermore, through the office of the Vice
President, we are working with various
development partners to design an implementable
and transparent conditional cash transfer program
for the poorest and most vulnerable. This program
will be implemented in phases. Already, the
compilation of registers of the poorest persons is
ongoing. In the coming weeks, we will present the
full programme, which will include our home-grown
public primary school feeding and free education for
science, technology and education students in our
tertiary institutions. Indeed, this will mark a historic
milestone for us as a nation.
The 2016 Budget
26. Distinguished members of the National
Assembly, I now present, the 2016 Budget
proposals of the Federal Government. Based on the
assumptions I presented earlier, we have proposed
a budget of N6.08 trillion with a revenue projection
of N3.86 trillion resulting in a deficit of N2.22 trillion.
27. The deficit, which is equivalent to 2.16% of
Nigeria’s GDP, will take our overall debt profile to
14% of our GDP. This remains well within
acceptable fiscal limits. Our deficit will be financed
by a combination of domestic borrowing of N984
billion, and foreign borrowing of N900 billion totaling
N1.84 trillion. Over the medium term, we expect to
increase revenues and reduce overheads, to bring
the fiscal deficit down to 1.3% of GDP by 2018.
28. In 2016, oil related revenues are expected to
contribute N820 billion. Non-oil revenues,
comprising Company Income Tax (CIT), Value
Added Tax (VAT), Customs and Excise duties, and
Federation Account levies, will contribute N1.45
trillion. Finally, by enforcing strict compliance with
the Fiscal Responsibility Act, 2007 and public
expenditure reforms in all MDAs, we have projected
up to N1.51 trillion from independent revenues.
29. Although we are working to diversify our
economy, we will not lose sight of the need to
restructure the oil and gas sector which has been
marred by corruption and plagued with
inefficiencies. Accordingly, I have directed the
Petroleum Products Pricing Regulatory Agency
(PPPRA) to adjust its pricing template to reflect
competitive and market driven components. We
believe this can lower input costs and attain
efficiency savings that will enable PPPRA to keep
the selling price for all marketers of petrol at N87
per liter for now.
30. The current fuel scarcity with long queues at
petrol stations all over the country causing social
dislocation is very unfortunate. Government
profoundly apologizes to Nigerians for this
prolonged hardship and misery. It is as a result of
market speculators and resistance to change by
some stakeholders. Government is working very
hard to end these shortages and bring fuel to the
pumps all over the country. 

31. I have also directed
the NNPC to explore alternate funding models that
will enable us to honour our obligations in Joint
Ventures (JVs) and deep offshore fields. We are
confident that these measures can be achieved and
will lower the burden that the traditional cash calls
have imposed on our budget and cash flows as well
as contribute towards shoring up our national
32. To deliver our development objectives, we have
increased the capital expenditure portion of the
budget from N557 billion in the 2015 budget to N1.8
trillion, in the 2016 budget. Distinguished and
honourable members of the National Assembly, for
the first time in many years, capital expenditure will
represent 30% of our total budget. In future years
we intend to raise the percentage allocation for
capital expenditure.
33. This is a fulfillment of our promise to align
expenditure to our long-term objectives, and a sign
of government’s commitment to sustainable
development. This increased capital expenditure
commits significant resources to critical sectors
such as Works, Power and Housing – N433.4
billion; Transport – N202.0 billion; Special
Intervention Programs – N200.0 billion; Defence –
N134.6 billion; and Interior – N53.1 billion. These
investments in infrastructure and security are
meant to support our reforms in the Agriculture,
Solid Minerals and other core job creating sectors
of our economy.
34. We will invest to safeguard lives and property.
35. We will invest in equipping our farmers with the
right tools, technology and techniques.
36. We will invest in empowering and enabling our
miners to operate in a safe, secure and humane
37. We will invest in training our youths, through the
revival of our technical and vocational institutions,
to ensure they are competent enough to seize the
opportunities that will arise from this economic
38. Indeed, the future looks bright. And I ask that we
all work together to make this vision a reality. The
223% year on year growth in capital expenditure
demonstrates our desire to make Nigeria more
competitive, and start the journey to deliver
sustainable development in our country.
39. In fulfillment of our promise to run a lean
government, we have proposed a 9% reduction in
non-debt recurrent expenditure, from N2.59 trillion
in the 2015 Budget to N2.35 trillion in 2016.
Furthermore, we have budgeted N300 billion for
Special Intervention Programs, which takes the total
amount for non-debt recurrent expenditure to N2.65
40. As I mentioned earlier, the Efficiency Unit set up
by this Administration together with effective
implementation of GIFMIS and IPPIS will drive a
reduction of overheads by at least 7%, personnel
costs by 8% and other service wide votes by 19%.
Distinguished and honourable members, this budget
will be executed to provide optimum value by
ensuring every naira spent by this Government,
41. We will devote a significant portion of our
recurrent expenditure to institutions that provide
critical government services. We will spend N369.6
billion in Education; N294.5 billion in Defence;
N221.7 billion in Health and N145.3 billion in the
Ministry of Interior. This will ensure our teachers,
armed forces personnel, doctors, nurses, police
men, fire fighters, prison service officers and many
more critical service providers are paid
competitively and on time.
42. Distinguished and honourable members of the
National Assembly, our 2016 borrowings will be
principally directed to fund our capital projects.
Furthermore, the sum of N113 billion will be set
aside for a Sinking Fund towards the retirement of
maturing loans; while N1.36 trillion has been
provided for foreign and domestic debt service.
This calls for prudent management on our part, both
of the debt portfolio and the deployment of our hard
earned foreign exchange earnings.
43. I am aware of the problems many Nigerians
currently have in accessing foreign exchange for
their various purposes – from our traders and
business operators who rely on imported inputs; to
manufacturers needing to import sophisticated
equipment and spare parts; to our airlines operators
who need foreign exchange to meet their
international regulatory obligations; to the financial
services sector and capital markets who are key
actors in the global arena.
44. These are clearly due to the current
inadequacies in the supply of foreign exchange to
Nigerians who need it. I am however assured by the
Governor of Central Bank that the Bank is currently
fine-tuning its foreign exchange management to
introduce some flexibility and encourage additional
inflow of foreign currency to help ease the pressure.
45. We are carefully assessing our exchange rate
regime keeping in mind our willingness to attract
foreign investors but at the same time, managing
and controlling inflation to level that will not harm
the average Nigerians. Nigeria is open for business.
But the interest of all Nigerians must be protected.
Indeed, tough decisions will have to be made. But
this does not necessarily mean increasing the level
of pain already being experienced by most
46. So to the investors, business owners and
industrialists, we are aware of your pains. To the
farmers, traders and entrepreneurs, we also hear
you. The status quo cannot continue. The rent
seeking will stop. The artificial current demand will
end. Our monetary, fiscal and social development
policies are aligned.
47. Mr. Senate President, Mr. Speaker,
distinguished members of the National Assembly, in
spite of the global economic uncertainties; we must
remain steadfast in our commitment to steer this
country back to greatness.
48. The Nigerian economy needs to move away
from dependency on oil. Our growth must be
inclusive. Nigerians must be part of the growth
story. As a Government, we shall deliver security,
jobs and infrastructure. This is the right of all
49. I know many people will say “I have heard this
before”. Indeed, trust in Government, due to the
abuse and negligence of the past, is at an all-time
low. This means we must go back to basics. Our
actions will speak for us. My team of dedicated,
committed and patriotic Nigerians is well aware of
the task ahead and I can assure you that we are
taking on the challenge.
50. We will not betray the trust reposed in us.
51. We will welcome and be responsive to your
feedback and criticisms.
52. We are here to serve. And indeed, Nigerians will
get the service they have longed for and which they
rightly deserve.
53. We as a Government cannot do it alone. We will
require the support of all civil servants, the
organized labour, industry groups, the press and of
course, our religious and traditional institutions.
This is a call for all of us to stand and serve our
54. This Budget represents a major step in
delivering a new opportunity for Nigeria. It
demonstrates our confident optimism that despite
the challenging times, we have the will,
resourcefulness and commitment to deliver
prosperity to our people. And by the Grace of
Almighty God and the sheer will and determination
of the Nigerian people, we will come out stronger
and more united than ever.
55. Thank you and God bless the Federal Republic
of Nigeria.

Post a Comment Blogger