40 per cent of 2016 budget may go to capital projects

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THREAT of recession is pushing the President Muhammadu Buhari-led Federal Government to plan massive infrastructural and social investment spending, The Guardian has learnt.

On Monday night, the Presidency hinted of plans to spend not less than 40 per cent of the 2016 budget on capital projects, a move which one of the sources described as ‘unprecedented in the nation’s budgetary history.’

Also top on the agenda of the Buhari administration is to mobilise substantial funds within and outside government to fund the Conditional Cash Transfer (CCT).

CCT programmes aim to reduce poverty by making welfare programmes conditional upon the receivers’ actions, meaning that the government (or a charity) only transfers the money to persons who meet certain criteria.

Government also plans to make significant savings from leakages and fraud, which, according to one of the sources, “have marred government spending in the past.”

No doubt, reports about government’s plan to spend up to N8 trillion in 2016 have continued to dominate the media space without any of the presidential officials confirming it. Yet, it is clear that the Buhari presidency has decided to raise such huge funds to build critical infrastructure as rail, roads and power, while also commencing in 2016 some of the promises of the All Progressives Congress (APC) for a Conditional Cash Transfer — including perhaps the N5,000 welfare package for the unemployed (youths) — and school feeding on a national scale.

Going by the yet-to-be-confirmed report on an N8 trillion budget estimate in 2016, therefore, it would appear that the Federal Government is ready to spend up to N3 trillion on roads, rail infrasture as well as on other safety nets.

Sources within the Central Bank of Nigeria (CBN) confirmed that the saving from the new implementation of the Treasury Single Account (TSA) is working and is projected to bring in hundreds of billions of naira for the 2016 budget.

Specifically, some members of the newly inaugurated Federal Executive Council have started holding several planning meetings with the Vice President on finalising the budgetary estimates and making a proposal ready for consideration of the Federal Executive Council on President Buhari’s directve.

The Guardian was told that the president is determined to ensure that every available resource of the Federal Government is applied to “funding a very ambitious budget just to bring economic succour to the Nigerian people in a way that has not been done for a long time now in the area of public infrastructure and social safety nets for the very poor people, many of whom came out to support his election earlier this year.”

It was disclosed that even before the new ministers were sworn in last week, the presidency had been holding meetings with top civil servants and CBN officials on how to fund to CCT. A template was said to have been decided which the FEC will be considering soon for final approval before going to the National Assembly for appropriation.

According to the template, couple million Nigerians are likely to benefit from the CCT in 2016, while the Buhari presidency is planning to ensure that within the next four budgets the lives of tens of million Nigerians or thereabout would have been touched by the CCT.

Part of the plan for infrastructure is the $25 billion, which the Vice President has spoken about publicly severally. The fund, according to informed government sources, would include contributions from the budget and also from both local and international investors. Already there are positive responses from foreign investors to contribute to the fund as there would be opportunities for the investors to bring their business ideas and project proposals. Indeed a source said the government gets a new offer regularly to be part of the fund from all kinds of international financiers and investors.

On the funding side, it is believed that the Buhari presidency from day one has been working with revenue generating agencies on how to radically raise internal revenue, especially with dropping oil prices, cutting expenses and overheads, and also raising funds locally and internationally from creditors considering that the nation’s debt to GDP ratio is still within international levels.

According to official sources, the nomination of Mr. Babatunde Fowler as FIRS Chairman, is a reflection of the presidency’s plan to raise revenue significantly as both individuals have presided over state governments’ efforts to raise revenue substantially.

While there was a recent resolution defeated on the Senate floor that the Federal Government should commence immediate implementation of the CCT, some of the new ministers have confirmed that diligent plans are being considered to start the implementation of the programme in the 2016 budget.

When asked to confirm if the CCT would be part of the 2016 budget, Senior Special Assistant to the Vice President, Mr. Laolu Akande, simply said “yes, there are plans to start the CCT next year, but you have to wait until a final budget estimate, which should be ready soon.”

Source: TheGuardian