•     The general slowdown in global economic activities as well as declining oil prices has adversely affected the Nigerian economy.

  The question in the minds of Nigerians and the international community (particularly existing and potential investors) is how the country will navigate its way through this storm.

This presentation puts in perspective the current economic situation as well as the strategic implementation plan to move the Nigerian economy forward based on the 2016 Budget.

Where are we coming from and Where are we today?

Where are we coming from and Where are we today?

 . Broadly, efforts are being targeted at addressing the current challenges. These include:

•     FGN’s & CBN Bailout to States

•     23 States had their bank loans (amounting to N575.52 billion) restructured into 20 years FGN bonds

•     28 State Governments benefited from the CBN Salary Bailout Intervention Facility of N373.56 billion between Aug. 2015 and Jan. 2016

•     Effective planning and budgeting system

•     Diversification of the productive base of the economy

•     Social Intervention Programmes

•     Primary School Feeding (with backward integration in agro-food processing)

•     Conditional Cash Transfer, Enterprise & Empowerment

•     Post-NYSC grant, Science & Technology, Engineering and  Mathematics Bursary Programme

•     Anti-graft war

•     Fighting Insurgency, Kidnapping & Violent Crimes

•     Improving the economic management process

    –     FGN Economic Management Team (EMT) meets regularly under H.E. VP’s Chairmanship

     –     NEC meets regularly on a monthly basis under H.E. VP’s Chairmanship

     –      Fiscal and monetary authorities working closely to ensure harmonised growth enabling fiscal and monetary policies.

 .  The Budget is still under review by the National Assembly.

•     We have been meeting with Nass to explain the importance of getting this budget right.

•     We expect the Budget to be passed before the end of this month and hope that Nass will retain the main thrust of the Budget

•     Most of the policies, programmes and projects will need the support of State Governments for effective implementation.

•     The 2016 Budget is designed to:

•     Reflate the economy through government expenditure-led growth strategy with emphasis on infrastructure development

•     Deliver inclusive growth to Nigerians

•     Create a significant number of jobs to reduce unemployment / underemployment especially among the youth (we need to aggressively create additional jobs)

•     Cater for the poor and vulnerable through special social intervention programmes (e.g. Conditional Cash Transfer (CCT), Primary School Feeding, etc.) 

•     Building an economy that is less vulnerable to oil price shocks  by creating a resilient diversified income base, and creating an efficient Public Financial Management (PFM) system

•     Increase revenue by broadening the tax base, ensuring efficient revenue collection, blocking leakages and reducing cost of governance through IPPIS, Efficiency Unit, etc.

•     The key approach adopted for the preparation of the 2016 Budget was to:

Establish a link between strategic planning and budgeting, and

•     Adopt a Zero-Based Budget (ZBB) system which ensures that resources are aligned with Government’s priorities and allocated efficiently

•     States are encouraged to adopt similar approach for efficient resource allocation and expenditure management

•     To achieve the aforementioned objectives, we have proposed a total budget of N6.08 trillion, an increase of about N1 trillion from the revised allocation of N5.09 trillion for 2015, highlights of which include:

•     Statutory transfers N351.37 billion

•     Debt service N1.475 trillion

•     Recurrent (non-debt) expenditure N2.648 trillion

•     Capital expenditure N1.85 trillion

•     Capital expenditure portion of the budget has been increased from N557 billion in 2015 to N1.85 trillion for 2016, representing 30% of our total budget

•     Under recurrent expenditure, N300 billion is  earmarked for Special Intervention Programmes on social safety nets, while a capital provision of N200 billion is made for the programmes

•     To ensure an effective implementation of the 2016 Budget of Change, the Federal Government is designing a strategic implementation plan

•     This strategic implementation plan for 2016 Budget of Change, which will be announced once the Budget is passed into law, outlines priority economic and developmental strategies designed to direct the trajectory of the national and regional economies towards the path of sustainable development and inclusive growth over the course of the 2016 Fiscal Year

•     The plan will document the key short-term priorities of this Administration. These are targeted at placing the economy on an upward trajectory and to Reposition it for Change,  Inclusive Growth and Sustainable Development

•     The Strategic Implementation Plan will set out the:

    –  Policy direction and some expected outcomes of the Federal Government’s programmes and projects to be implemented in 2016

    –        Introduce innovative financing and expenditure management measures

•      Key elements of this Implementation Plan is being presented to you today. This is, of course, not the comprehensive Medium-/Long-Term National Plan. That is still being developed under the coordination of the Ministry of Budget and National Planning and will be presented to you, in due course, for your inputs.

•     Rather, the implementation plan is simply a road-map of key macroeconomic and sectoral policies and strategic targets for the 2016 Fiscal Year. We are exposing some key elements at this Retreat as part of our consultative process with the States.

    5.3 Priority Action Points for Implementation
                  (7) –Social Investmen

•      States to key into the Strategic Implementation Plan for 2016 Budget of Change

•      The key is Agriculture and Solid Minerals, followed by Manufacturing.

•       Work with the FGN in ensuring effective implementation of the social intervention programmes.

•      Prioritize spending on activities (programmes & projects) that have greater potential for job creation, growth and social development

•      Ensure that borrowings by States are kept within Debt Sustainability Limits

•      State should focus on areas of comparative advantage in productive activities, and leverage on opportunities in States within the same zones

•      Diversify the economies of States

•      Move away from relying on FAAC allocation

•      Grow size of IGR and improve efficiency in collections

•      Introduce innovative financing and expenditure management measures

•      Mainstream the Sustainable Development Goals (SDGs) into the planning and budgeting process

•      FGN has to work closely with the States in transforming Nigeria. FGN alone cannot do it!