FG cuts 2016 budget, increase debt ratio
ABUJA —Federal government has opted to
reduce total budgetary spending on 2016
capital expenditure plan ahead of indication
that the budget would not be implemented
fully. Minister of Finance, Mrs Kemi
Adeosun, who gave this indication in London
while addressing international investors, said
the decision was favoured against an option
of increased borrowing to plug the
increasing revenue gap.
Though she did not specify the expected
amount to be cut from the budget or any
particular expenditure head to be affected, a
budget office source told Vanguard that
looking at the current revenue trend, over 50
percent of the capital expenditure budget
would not be implemented. This gives about
N900 billion out of the total N1.8 trillion
budgeted for capital expenditure in 2016.
The source also said that though the
present government adopted a zero-based
budgeting, the unimplemented portions
would be transferred to 2017 budget.
Adeosun said the government would not
want to increase its debt to GDP ratio in
2016, but hinted that the ratio would
eventually go up over the next three years
to about 20 per cent from current 13 per
cent, indicating the current government
under President Mohammadu Buhari would
be borrowing annually throughout its first
term.
The government had planned to borrow both
from domestic and international markets to
plug its 2016 budgeted deficit of N2.2
trillion. Meanwhile, the minister had stated
that the treasury single account, TSA, has
witnessed significant increase in revenue to
N3.3 trillion in May, up from N2.9 trillion in
March.
Adeosun also noted that the ministry was
continuing to unearth pockets of revenue
that had escaped its net, including visa fees,
airport landing charges and shipping levies.
ABUJA —Federal government has opted to
reduce total budgetary spending on 2016
capital expenditure plan ahead of indication
that the budget would not be implemented
fully. Minister of Finance, Mrs Kemi
Adeosun, who gave this indication in London
while addressing international investors, said
the decision was favoured against an option
of increased borrowing to plug the
increasing revenue gap.
Though she did not specify the expected
amount to be cut from the budget or any
particular expenditure head to be affected, a
budget office source told Vanguard that
looking at the current revenue trend, over 50
percent of the capital expenditure budget
would not be implemented. This gives about
N900 billion out of the total N1.8 trillion
budgeted for capital expenditure in 2016.
The source also said that though the
present government adopted a zero-based
budgeting, the unimplemented portions
would be transferred to 2017 budget.
Adeosun said the government would not
want to increase its debt to GDP ratio in
2016, but hinted that the ratio would
eventually go up over the next three years
to about 20 per cent from current 13 per
cent, indicating the current government
under President Mohammadu Buhari would
be borrowing annually throughout its first
term.
The government had planned to borrow both
from domestic and international markets to
plug its 2016 budgeted deficit of N2.2
trillion. Meanwhile, the minister had stated
that the treasury single account, TSA, has
witnessed significant increase in revenue to
N3.3 trillion in May, up from N2.9 trillion in
March.
Adeosun also noted that the ministry was
continuing to unearth pockets of revenue
that had escaped its net, including visa fees,
airport landing charges and shipping levies.
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