By Nse Anthony-Uko
ABUJA (Sundiata Post) – Despite setting up the Efficiency Unit to reduce cost of governance, the Federal Government has increased its overheads estimate by a whopping 40 per cent to N229 billion in the 2017 budget from N163.39 billion in 2016.
The Minister of Finance, Mrs Kemi Anderson, established the Efficiency Unit (E-Unit) in her ministry in November 2015, with the mandate to work across all MDAs to identify and eliminate wasteful spending, duplication and other inefficiencies; identify best practices in procurement and financial management and share such knowledge to ensure its adoption.
Head of the E-Unit, Ms Patience Oniha, had said at a workshop last month, that MDAs’ overhead expenses have been reduced by about N15 billion following the activities of the unit since inception.
The proposed over cost of N229.8 billion for 2017 is higher than the N163.39 billion in 2016 from which saving of about N15 billion has already been by the E-Unit, and also higher than the N177 billion spent in 2015.
Analysts had expected to see a reduction in the costs of running government following the activities of the E-Unit.
Also the budget breakdown presented by the Minister of Budget and National Planning, Mr Udoma Udo Udoma, on Monday showed that the Federal Government planned to spend N1.86 trillion on salaries and remuneration of its civil workers in 2017, an increase of about 8.8 per cent over the 2016 figure of N1.71 trillion despite elimination of ghost workers and other leakages since last year, which government said had saved it several billions of naira in personnel costs.
This N150 billion additional expenditure on personnel cost indicates that the federal government plans to employ more people into the civil service or raise the salaries of current workers.
Recall that the government had last month disclosed that the monthly wage bill of Ministries, Departments and Agencies (MDAs) has declined by N20 billion from N165 billion monthly to about N145 billion due to the activities of the Presidential Initiative on Continuous Audit, whose work is to eliminate ghost workers and block other areas of revenue leakages.
The Federal Government had consistently dropped its personnel cost for four consecutive years, from N1.85 trillion in 2011 to N1.65 trillion by 2014, but spiked the figure to N1.71 trillion last year and now to N1.86 trillion.
Further breakdown as provided by Mr Udoma showed that about a third of Nigeria’s 2017 budget will be funded by borrowing from internal and external sources, as the government seeks to borrow about N2.32 trillion to finance the N7.29 trillion budget.
“Of this amount, N1.067 trillion (46 per cent of this borrowing) is intended to be sourced externally, while N1.25 trillion will be sourced domestically,” he said.
About 67 per cent of the 2017 budget, will however be funded from government revenue, majorly from oil and non-oil sources.
Mr. Udoma said the 2017 “Budget of Recovery and Growth” are based on key assumptions and budgetary reform initiatives, government hopes to realize about N4.94 trillion as revenue during the year.
The revenue projection, which he said exceeded the 2016 figure by 28 per cent, would be realised from oil (about N1.985 trillion), non-oil (N1.373 trillion) and other revenues such as minerals and mining.
The revenue contribution from oil, the minister said, would be about 40.2 per cent, as a result of the cost reduction due to the new funding mechanism for the joint venture operations adopted last week, higher oil prices, exchange rate gain and additional oil related revenues, compared to 19 per cent in last year’s budget.
Details of other expected revenues to fund the budget, Mr. Udoma explained, include about N30 billion from federal government share of dividend payments from the Nigeria LNG; earnings from mineral and mining (N1 billion); company income tax (N808 billion), value added tax (N242 billion) and recoveries and fines (N565 billion).
Others include customs duties (N278 billion), federation accounts levies (N46 billion), independent revenue sources (N808 billion), share of actual balance in special accounts (N7 billion), share of balance in special levies accounts (N9 billion), unspent balance of previous fiscal year (N50 billion), share of signature bonus (N114 billion).
Udoma, who said the total budget outlay for the year was about 20.4 per cent above last year’s provision of N6.06 trillion, explained that about N419.02 billion would be spent on statutory transfers, debt service (N1.66 trillion), and sinking fund (N177.46 billion) to retire certain maturing bonds.
Non-debt recurrent expenditure is N2.98 trillion, or about 40.8 percent of the total outlay, while capital expenditure would gulp N2.24 trillion, or 30 7 per cent, including statutory transfers.
The budget deficit of about N2.36 trillion, which is about 2.18 per cent of the gross domestic product, the minister said, would be financed mainly by borrowings from domestic and external sources, to the tune of about N2.32 trillion.
A breakdown of the recurrent (non-debt) expenditure of government for the year, he explained, was put at about N2.98 trillion, with personnel cost taking the lion’s share of N1.86 trillion, or 63 per cent of the total, as government does not plan to sack workers.
Overhead cost in the budget would take about N229.81 billion, or 7 per cent; service wide vote pensions N89.98 billion, or 3 per cent; consolidated revenue fund pensions N191.63 billion, or 6 per cent; other service wide votes, N116.6 billion, or 5 per cent; presidential amnesty programme, N65 billion, or 2 per cent; refund to special accounts N50 billion, or 2 per cent, and special intervention programme, N350 billion, or 12 per cent.
“It is true our economy is in recession. Inflation and unemployment have been rising. But as a government, we are determined to bring succour to our people. The only way we can do this is by taking strong action to change, in a fundamental way, the current trajectory of the Nigerian economy.
“This is not the time for timid and cautious approach. This is a time for bold and focused action. To get out of this recession and back on the path of growth, government must find the resources to spend on infrastructure and to spend to reflate the economy.
“This spending will help to stimulate and attract private sector capital and private sector spending. This is what the 2017 budget proposals seek to do,” Mr Udoma said.
He urged the revenue generating agencies, particularly the Federal Inland Revenue Service and the Nigerian Customs to step up efforts to improve their efficiencies and broaden their reach to achieve the targets of the 2017 budget.
Apart from leveraging technology to drive revenue collection, he said government would soon issue fresh guidelines and templates for computing the operating surpluses of the various government agencies set for independent revenues.
