Budget 2016 - Welcome Growth in Capital Releases


Thursday, February 9 2017/ 11.49 AM /FBNQuest Research 

Our chart today is drawn from the CBN’s quarterly bulletin and shows recurrent expenditure to September 2016. The first point is that there were apparently no payments made to personnel in two months: for January 2016 we offer the mitigating explanation that the year’s budget was not signed off for several months (in May).  

Payments to personnel, which exclude the category of pensions and gratuities, are now running at about one third of total expenditure. The data in the bulletins are less detailed than in the quarterly economic reports, which run to June 2016. 

In June 2016 the federal finance minister, Kemi Adeosun, said that personnel costs were running at about N165bn per month (including pensions of about N15bn per month). She has seconded 300 staff from the OAGF onto a continuous payroll audit. The aim is to continue the work to identify and remove from the payroll “ghost” workers and pensioners. The chart suggests some success for her endeavours from mid-2016. 

This bulletin shows recurrent spending of N4.02trn over the 12 months in question and capital releases of N980bn. For the 12 months to September 2015, the comparable figures were N3.57trn and N500bn. The 2017 budget proposals project another ambitious rise in releases to N2.24trn. 

The downside of the increase in capital releases, of course, is the widening of the FGN deficit and the alarming rise in domestic debt service (Good Morning Nigeria, 06 February 2017).


On a historical note, spending on personnel was consistently running at less than N100bn per month until October 2010. The previous administration awarded a sizeable salary increase to civil servants ahead of the elections before last. 


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