Budget 2016’ll revive economy, says Buhari

ABUJA—PRESIDENT Muhammadu Buhari, yesterday, apologised to Nigerians over the persistent and biting fuel scarcity in the country and attributed the problem to market speculators and stakeholders who are resistant to change. He assured that the government was working hard to end the shortages urgently.

President Buhari who begged Nigerians while presenting the N6.08 trillion 2016 budget to a joint session of the National Assembly, said the government has not increased fuel price and that the pump price of fuel remains N87 per litre.

Buhari arrived the Chambers at 10.01am. Apologizing to Nigerians for the pains occasioned by the continued fuel scarcity across the country, he said: “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.”

Meanwhile, the Senate, yesterday, amended the Appropriation Act of 2015 to extend implementation of 2015 budget from December 31, 2015 to March 31, 2016.

The President who started his address at 10.17am and ended it at 10.51 am, disclosed that 30 per cent of Nigeria’s annual budget will be committed to capital expenditure, even as he raised Capital Expenditure from N557 billion in 2015 to N1.8 trillion in the 2016 budget.

Having reviewed the trends in the global oil industry, he said the government decided to set a benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day for 2016, with plans to  focus on non-oil revenues by broadening the tax base and improving the effectiveness of revenue collecting agencies.  The government is projecting to realise N1.4 trillion as non-oil revenue.

President Buhari, who noted that the present administration projected a revenue target of N3.86 trillion for 2016 and recurrent expenditure of N2.43 trillion, said that the Federal Government also proposed to spend N1.66 trillion on foreign and domestic debt servicing.

The President also declared that his administration would fight corruption no matter how long it takes.

To borrow N1.9 trillion

In the budget, there is a projected foreign and domestic borrowing of N900 billion and N986 billion respectively.

On recurrent sectoral allocations, Education received the highest recurrent vote of N369 billion; followed by Health, N296 billion; Defence, N294 billion; Ministry of Interior, N245 billion while the merged ministries of Power, Works and Housing received budgetary allocation of N433 billion for 2016.

The speech read in part: “The Budget was based on a benchmark oil price of $53 per barrel, oil production of 2.28 million barrels per day and an exchange rate of N190 to the US$.

“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.

“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 per cent of our total budget. In future years, we intend to raise the percentage allocation for capital expenditure.

“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 billion; Special Intervention Programs – N200 billion; Defence – N134.6 billion; and Interior – N145.3 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.

“We will invest to safeguard lives and property. We will invest in equipping our farmers with the right tools, technology and techniques. We will invest in empowering and enabling our miners to operate in a safe, secure and humane environment.  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 revival.

“Indeed, the future looks bright. And I ask that we all work together to make this vision a reality. The 223 per cent 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.

“In fulfillment of our promise to run a lean government, we have proposed a nine per cent 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 Programmes, which takes the total amount for non-debt recurrent expenditure to N2.65 trillion.

Reduces  overhead cost

“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 seven per cent,  personnel costs by eight per cent and other service wide votes by 19 per cent. Distinguished and honourable members, this budget will be executed to provide optimum value by ensuring every naira spent by this Government, counts.

“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.

“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.”

Buhari who noted that government was aware of the harsh economic situation presently being faced by Nigerians, however, blamed the situation on unbridled corruption and security challenges, adding: “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.”

President Buhari assured Nigerians that his administration was poised to rebuilding the economy and restoring public confidence in the government. He said although the nation has series of problems to contend with, the challenges were not beyond the country to tackle, adding that  the 2016 budget was designed to stimulate the economy and make it more competitive, while focusing on infrastructural development; delivering inclusive growth and prioritizing the welfare of Nigerians.

Buhari also assured that the budget would address problems associated with youth unemployment and general poverty in the land, with particular emphasis on the deplorable conditions of most vulnerable Nigerians, adding, “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.

“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.

“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.

“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.

“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 Nigerians”.

The President who reiterated that the administration would diversify the economy through import substitution and export promotion, said that such economic strategy would build resilience in the economy and guarantee that the contemporary challenges did not confront the nation’s future generations, adding, “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”, he stated.

According to him, despite the general global economic downturn in 2015, Nigerian economy was able to grow by 2.84 per cent in the subsisting fiscal year, just as he promised that the present administration would continue to evolve and implement strategies that would maintain micro-economic stability, while managing the oil price shocks currently aching the country.

He said: “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 per cent in the third quarter of 2015. We have, and will continue to implement strategies that will maintain macroeconomic stability and manage the oil price shocks we are experiencing.”

President Buhari was accompanied by All Progressives Congress, APC National Chairman, Chief John Odigie- Oyegun; his ministers including Rotimi Amaechi; Senator Chris Ngige; Senator Udoma Udo Udoma; Dr. Kayode Fayemi; Chief Audu Ogbeh;  Ogbonnaya Onu; Dr. Osagie Ehanire; Lt.Gen.  Abduulrahman Dambazau; Alhaji Lai Mohammed; Amina Ibrahim Mohammed; Babatunde Raji Fashola; Dr. Emmanuel Ibe Kachikwu; Abubakar Malami, SAN; Senator Aisha Jummai Alhassan; and Mrs Kemi Adeosun among others.

During his presentation, President Buhari got encomiums from the gallery as they clapped 20 times  with the last one at 10.52am and even when the President paused to drink water at 10.36am, the audience also clapped for him.

Buhari’s Budget a big fraud, he will mortgage Nigeria’s future — PDP

Meanwhile, the National leadership of the Peoples Democratic Party, PDP, picked holes in the budget..

In a statement by its National Publicity Secretary, Chief Olisa Metuh,  the party described the N6.08 trillion budget as a big fraud and executive conspiracy tailored towards mortgaging the future of the nation.

The party while querying President Buhari’s decision to borrow N2 trillion, which it termed the biggest in the history of the nation, said that it was the height of recklessness and deceit from a government that trends on propaganda. PDP also berated the Federal Government for trying to use its bogus welfare programme and phantom capital projects as cover and conduit to siphon the funds to satisfy partisan interests, particularly to settle huge campaign debts.

Metuh said: “It is obvious that this budget is an extension of the campaign promises of the APC government, presented as a manifesto filled with bogus promises which implementation will be inconclusive, thereby allowing the APC to once again deny their promises.

“There has never been any known economy in the world where government deliberately mortgages the future of its nation by borrowing excessively to finance partisan interests while hiding under bogus welfare programmes. This is moreso important as the APC in reeling out their bogus campaign promises never informed Nigerians that they would mortgage their future through excessive borrowing.

“We have it on good authority that this is the first in the series of APC borrowings which would leave the future generation of Nigerians under the burden of huge debts after four years.”

Metuh who noted that the budget clearly shows that after seven months in power, President Buhari and his party, the APC were yet to differentiate between governance and campaign propaganda, said: “By all standards, the 2016 budget, the first major economic policy outing of this government, is completely unrealistic and duplicitously embellished with impractical predications, a development that confirms fears by economy watchers and investors that this administration is obviously ill-equipped for governance.

“We are indeed shocked that President Buhari and his minister of information have come up with two different reasons for the current fuel crisis in the country. While we appreciate the President’s apology, we think it is high time he called this minister to order as his excessive propaganda and blame game are ridiculing this administration and the image of the nation.

“Furthermore, it is instructive to note the official endorsement of Mr. President to the devaluation of the naira as against his campaign promise of firming up the value of our currency even to the much vaunted one naira to one dollar. Does it mean that Mr. President lied his way to power, or that he did not understand the complexities of governance when he was making his false promises to Nigerians?

“In future, there is need to regulate campaign promises so that we will not end up with a government that promises to climb Mount Everest with bare hands and end up mortgaging our future with orchestrated borrowings.’’

Lawmakers hail proposal

Reacting to the budget, shortly after the Senate and the House of Representatives adjourned till January 12, 2016, Senate Deputy Majority Whip, Senator Francis Alimikhena, APC, Edo North, described the budget as that of hope, just as he urged Nigerians to be patient with the government as things will be better soon, adding that President Buhari meant well for Nigeria and Nigerians.

In his reaction, Senator Bukkar Abba Ibrahim (Yobe South), said the promise of free education by the president was laudable, describing it as budget of hope.

Also commenting, Senator Kabir Marafa, APC, Zamfara Central who described the budget as that of hope, however promised that the Senate would ensure that the bill was given attention and passed for the interest of Nigerians

Senator Solomon Adeola (Lagos West) in his reaction said it was cheery to see the budget take care of social interventions such as school feeding and social welfare for the unemployed.

Senator Bassey Akpan (PDP, Akwa Ibom North-east) who described it as people-centred and an indication that the president means well for the country,  said that National Assembly would look at assumptions in it and ensure that the implementation was in line with the way it is passed.

Reacting to the budget, Rep Austine Chukwukere, APC, Imo State who described the 2016 Appropriation Bill as presented by President Muhammadu Buhari as a fruitful budget, said that the budget would stimulate and engineer the economy in such a way that the infrastructure deficit that had been the order of the day in previous administration had been given a boost.

Rep Chukwukere said that the increment in the capital expenditure would lead to improvement on the dilapidated infrastructure in the country as well as the industrial re activation.

Chukwukere who is the Deputy Chairman of Finance Committee said that if the budget would be fully implemented it would re-kick start the economy for the good of Nigerians.

On the $38 benchmark in which the budget was premised despite that the oil price per barrel had fallen to $32, he explained that the projection was that before first quarter of next year, the oil price must have appreciated going by some indices.

He expressed the optimism that the benchmark would not affect the effective implementation of the budget.

Also commenting on the budget, Rep Philip Shaibu representing Etsako Federal Constituency of Edo State on the platform of All Progressives Congress, APC, said that the budget will make poverty history in 2016.

He said that the emphasis on job creation and improved education was a welcome development, adding that creation of employment will empower Nigeria youths.

Shaibu who was a former Majority Leader in Edo State House of Assembly and a one time president of National Association of Nigerian Students, NANS said there was a departure from what was obtained in the previous administration where the government borrowed money to finance the recurrent expenditure.

According to him, President Buhari had increased the budgetary allocation to the capital expenditure and assured that the money to be borrowed would be used on capital expenditure and not on recurrent.

He said that one of the essential feature of the budget was the deviation from oil to solid minerals and agriculture, noting that over reliance on the oil sector has brought the economy to the present poor state as a result of the fall in the price of oil.

He further said that with the transparency introduced by the government, there was hope that it would be implemented to the fullest.

Adding, “I see our economy booming, I see the economy being restructured. Poverty issue will be totally addressed. I am optimistic,” he stated and commended on the two leadership of the house for taking the decision to ensure effective oversight function

Also in his reaction, Member representing Bali/Gassol federal constituency of Taraba state,  Hon.  Garba Chede, said the budget  is a product of deep thinking based on realities of the nation today.

“This is the first time APC administration was presenting a budget and this budget,  undoubtedly, is a creation of deep thinking based on realities, which was obvious to all Nigerians.”

Budget is fueled by insincerity –  Fani- Kayode

However, former Spokesperson of ex-President Goodluck Jonathan Campaign Organisation, Chief Femi Fani- Kayode, said  the 2016 budget is fueled by insincerity.

According to him, it was ironic that former governor Asiwaju Tinubu; Minister of Transportation, Rotimi Amaechi and Governor Nasir El- Rufai, who kicked against deregulation during former President Jonathan’s administration, have suddenly become great supporters of deregulation.

In a statement, Chief Fani- Kayode who accused  Buhari’s administration of spending money like a drunken sailor, alleged that the government  was  borrowing as if there was  no tomorrow and thereby  ‘’mortgaging the future of Nigeria, Nigerians  and our children.’’

“The 2016 budget is fueled by insincerity, shrouded in fantasy, built on tall dreams and spawned by deceit, ignorance and the illusion of change. It is bloated, unrealistic, expensive, cosmetic and it will not result in anything good.  In order to fund part of the budget the government intends to borrow money and this will throw our country into even greater debt. What a tragedy this is given the fact that in 2007 Nigeria was debt-free. The Buhari administration is spending money like a drunken sailor and they are borrowing as if there is no tomorrow, mortgaging the future of our nation and our children.

“We need far more fiscal discipline and seriousness than that if our government really wishes to improve the economy and better the lives of ordinary people.

“Meanwhile the Federal Government has said that President Goodluck Jonathan is responsible for today’s long fuel queues even though he left office seven months ago. They seem to have forgotten that in 2012 it was their group, led by Bola Tinubu, Nasir El Rufai, Rotimi Amaechi and President Buhari himself that aggressively opposed deregulation and almost brought the whole country to a standstill with protests and riots all over the place in their efforts to prevent the government from removing the oil subsidy.

“Had it not been for their pettiness, lack of understanding, shortsightedness and double standards the subsidy would have been removed three years  ago and fuel queues would have been a thing of history. Sadly they lacked the foresight to appreciate the virtues of that policy and today they have the nerve to blame Jonathan for the mess that they themselves essentially created.

“They have been in power for 7 months now: it is time for them to step up to the plate, start taking responsibility for their own actions, do a better job and stop blaming Jonathan for their own miserable and avoidable failures.”

 

Budget 2016’ll revive economy, says Buhari