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2016 budget: FG directs MDAs to cut costs

By on October 8, 2015

Vice-President Yemi Osinbajo on Tuesday said all government Ministries, Departments and Agencies would be expected to cut costs under the 2016 budget.

He said this was necessary in order to control expenditure of the Federal Government, which he said was too high.

According to a statement by his Senior Special Assistant on Media and Publicity, Mr. Laolu Akande, the vice-president spoke at a one-day sensitisation session on the 2016 budget and 2016-2020 Medium Term Plan of the Federal Government organised for permanent secretaries and director-generals at the Presidential Villa, Abuja.

Osinbajo was quoted as telling the top government officials that in order to achieve the socio-economic goals of the President Muhammadu Buhari administration, amidst dwindling oil revenues on the one hand, and the vast number of Nigerians living in poverty on the other, there was a need to change the way budgeting was being done.

“The greatest challenge to us is controlling ballooning recurrent expenditure and freeing up resources for growth-related capital expenditure.

“We need to cut overheads too; we can’t spend as we used to spend. We need to block leakages, increase accountability and transparency. This is an absolute necessity, the level of corruption is an outrage and we have to deal with it,” the vice-president was quoted as saying.

He also said the government would do something different from the past on poverty and stressed that budgeting had to be done differently.

He explained further that budget planning under the Buhari administration would restore the long-term, policy-based approach to budgeting alongside a zero-based budgeting, which would question all expenses, ensuring greater transparency.

This, he said, was unlike the traditional budgeting where baseline assumptions were taken for granted.

Under the zero-based budgeting, the vice-president said expenditures would be reduced since every item would have to be justified.

Explaining how the Treasury Single Account would also fit in, Osinbajo said the TSA helps to avoid the under-declaration of revenues by the MDAs of the Federal Government.

“There had been in the past MDAs that worked outside the budget; for instance, the NNPC, which was running huge revenues and spending outside the budgetary process, that is why we have the TSA,” the vice-president asserted.

He said the TSA would therefore enable the government to free up revenues that would then become available for economic growth and development.

He said Buhari had already instructed that every agency including the military and the universities must join the Integrated Personnel and Payroll Information Systems, which would help to curtail some of abuses in the salary and emolument processes of the government.

The Head of Service of the Federation, Mr. Danladi Kifasi, commended the Buhari administration for introducing the discussion early in the budget planning process.

“This is the first time that permanent secretaries are invited this early for budget planning. It means we become critical owners of the process, not just a part of it,” he said.

President Buhari had promised that the 2016 budget being prepared by his administration would be designed to encourage the diversification of the nation’s economy.

He said new policies and measures that would move the economy away from the current dependence on the oil and gas sector would be introduced.

The President, who spoke in Abuja on Monday, however, did not disclose the specific policies and measures.