The Federal Government is planning a Special Intervention Fund of N2.5 trillion for 2016, BusinessDay learnt at the weekend.
The planned fund is part of a massive N8 trillion budget proposed by the government, the largest ever in Nigeria’s budgetary history.
BusinessDay learnt that this formed part of the discussions at the just concluded ministerial retreat for the incoming ministers of the President Muhammadu Buhari-led administration.
It was learnt that part of the Special Intervention Fund would include social spending to lift millions out of extreme poverty, improve consumer spending which would drive job creation in an expansionist fiscal/monetary policy regime.
Vice President Yemi Osinbajo had earlier informed that the All Progressives Congress (APC)-led government would adopt a new paradigm shift to fix burgeoning local challenges as against the past.
Those new strategies include investing in social security programmes for the poor and vulnerable in the Nigerian society that would ensure an inclusive growth, the Vice President had said.
An infrastructure fund of N25 billion is also planned for 2016 under the said proposed budget.
However, experts at the weekend raised concerns on how government intends to fund the huge budget, particularly at a time of low revenue. They also expressed fears that the spending may possibly pose enormous challenges for the monetary authority to manage liquidity since the system presently does not have the capacity to absorb such enormous budget.
While analysts raise doubt on how the N8 trillion budget will be funded, there are indications of possible significant cut in the cost of running government.
It was also gathered that incoming ministers would not have the luxury of the usual allowances and large retinue of personal aides like their predecessors, BusinessDay learnt.
“We are going to block areas of leakages, retinue of aides, protocol staff, large convoy of cars are things that will not fly in this administration,” Chris Ngige, former Anambra State senator, said after the retreat.
It could not be confirmed what percentage of the allowances would be trimmed.
On an average, a minister earns about N15 million annually, inclusive of remuneration and allowances. A breakdown of the total package shows that remuneration is N7.801 million annually, while allowances stands at N8.105 million annually.
However, experts say the cut is insignificant compared with the huge expenditure of N8 trillion proposed for the 2016 budget.
A document seen by BusinessDay, tagged “The Economy – Where we are today,” a paper presented by Vice President at the retreat, noted that the N8 trillion proposed spending was higher than the 2015 budget of N4.4 trillion, a percentage increase of almost 82 percent.
Osinbajo told the new ministers that the government was working at pegging capital expenditure in the 2016 budget at N2 trillion, as against the N1.31 trillion in this year’s budget.
While the percentage of capital expenditure to recurrent expenditure in the 2015 budget was 19.4, government would propose 40 percent for next year’s budget.
Elizabeth Archibong
