Tuesday, December 22, 2015 4.31PM / CardinalStoneResearch
President Muhammadu Buhari has just presented the 2016 Appropriation Bill to the Joint Session of the National Assembly. Key highlights of the budget are as follows:
Total budget spend capped at N6.08 trillion ($30.71 billion) with projected revenues of N3.86 trillion ($19.49 billion), implying a deficit of N2.22 trillion ($11.21 billion). The deficit of N2.22 trillion is equivalent to 2.16% of GDP and takes the country's overall debt profile to 14% of GDP. Deficit to be financed partly through domestic and foreign borrowings worth N984 billion ($4.97 billion) and N900 billion ($4.55 billion) respectively.
· Oil revenues: N820 billion ($4.14 billion)
· Non-oil revenues: N1.45 trillion ($7.32 billion) - sourced from Company Income Tax - CIT, Value Added Tax - VAT, Customs Duties and Federation Account levies
· Independent revenues: N1.51 trillion($7.63 billion) which include revenues from Ministries Departments and Agencies - MDAs
Planned capital expenditure equal to N1.80 trillion ($9.09 billion) and equivalent to 30% of total budget spend. Capital expenditure to critical sectors are as follows:
· Works, Power and Housing - N433.4 billion ($2.19 billion)
· Transport - N202 billion ($1.02 billion)
· Social Investment - N200 billion ($1.01 billion)
· Defence - N134.6 billion ($680 million)
· Interior - N53.1 billion ($268 million)
· Details on planned capital expenditure of the balance N776.9 billion ($3.9 billion) was not stated.
Planned non-debt recurrent expenditure equal to N2.35 trillion ($11.8 billion). Non-debt recurrent expenditure to critical sectors as follows:
· Education - N369.6 billion($1.86 billion)
· Social Investment - N300 billion($1.51 billion)
· Defence - N294.5 billion($1.49 billion)
· Interior - N145.3 billion($734 million)
· Details on planned non-debt recurrent expenditure of the balance N1.24 trillion($6.26 billion) was not stated.
· N113 billion ($570 million) provided as sinking fund towards retirement of maturing loans
· N1.36 trillion ($6.87 billion) provided for 2016 debt servicing
Buhari acknowledged the recent fallouts of foreign exchange controls, noting that the CBN is currently reviewing its exchange rate regime as it is fine-tuning foreign exchange management policy to ease the pressure on the Naira. This is in a bid to continue to attract foreign investments while also monitoring price stability. He also spoke on the recent fuel scarcity stating that the problem was as a result of wide market speculations and a resistance to change by major stakeholders. On the price of Petrol, the President said that he has directed the PPPRA to adjust the pricing template to reflect competitive and market driven components such that the price of PMS is kept at N87 in the near to medium term. Overall, He restated governments drive towards economic diversification, inclusive growth and reduced unemployment as monetary, fiscal and development policies are made to align.
NB: Dollar equivalent calculated using N198/$
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