HIGHLIGHTS (NGN' Bn) 2016 2015 % Change
Total Revenue 3,855.8 3,452.4 11.7
Oil Revenue 813.1 1,637.9 -50.4
Non-Oil Revenue 1,536.8 1,214.7 26.5
Independent Revenue & others 1,581.2 599.8 163.6
Aggregate Expenditure 6,060.7 4,493.4 34.9
Recurrent Non-Debt 2,646.4 2,593.21 2.05
Special Intervention Program 300 - 100
Capital Expenditure 1,587.6 557.0 185.0
Capex % of total expenditure** 31% 12%
Debt Service 1,475.3 953.6 54.7
Budget Deficit -2,204.9 -1.041.0 111.8

Macro-Economic Outlook Projections (MTEF) 2016 2015 % Change
Real GDP Growth rate (%) 4.4 3.4 -20.5
Nominal GDP (N'Trillion) 103 94 9.4
Average Exch rate (NGN/$) 197 190 -3.7
Inflation rate (%) 9.81 10.2 3.8
Growth of non-oil export (%) 16.5 16.5 0
Crude oil production (mbpd) 2.2 2.3 -3.4
Oil price benchmark ($/barrel) 38 53 -28
Budget Deficit (% of GDP) -2.14 -1.09 0.96

MTEF is Medium Term Expenditure Framework

  • Actual inflation year on year as at April 2016 was 13.7%
  • Real GDP growth rate for Q1 2016 was -0.36%

2016 REVENUE GENERATION SPLIT (MTEF)

Highlights of Revenue and Expenditure

  • **Total capital expenditure is circa NGN 1.8 trillion which includes NGN156 billion under Statutory Transfers and NGN 86 billion in Debt Service.
  • Oil revenue is expected to decline by 50% while non-oil revenue is projected to increase by 26.5%.
  • Increase in non-oil tax revenue will come mainly from Company Income Tax and Value Added Tax expected to increase by 33.2% and 14.9% respectively.
  • Spending is planned to increase in 2016 (compared to 2015) by about 35% to an aggregate expenditure of N6.06 trillion.
  • Non-debt recurrent expenditure for 2016 which represents about 43.7% of the aggregate expenditure is expected to rise by 2% to NGN2.646 trillion. This includes NGN300 billion special intervention fund.
  • Capital expenditure is proposed to increase by about 180% to NGN1.58 trillion which constitutes about 30% of total expenditure.
  • The ministry of works, power and housing was allocated NGN423 billion or 26.6% of the capital expenditure being the top recipient of capital spending.
  • The federal government has earmarked NGN2 billion for the National Job Creation/Graduate Internship scheme.

Debt service

  • The debt service cost is expected to increase by 54.7% (to a record NGN1.475 trillion) accounting for about 24.3% of total expenditure or 38% of revenue notwithstanding a low debt to GDP ratio of circa 13%.
  • NGN1.3 trillion and NGN54.5 billion are required to service foreign and domestic debt respectively.
  • A sinking fund of 113.4 billion is for the purpose of retiring matured loans.

Capital Expenditure of KeyMinistries (NGN'Bn)

Ministry 2016 2015 % Growth
Agriculture 46.2 8.8 425.0
Defence 130.9 36.7 257.0
Education 35.4 23.5 51.0
Healthcare 28.7 22.7 26.0
Solid Minerals 7.3 1 630.0
Transportation 188.7 14.1 1238.0
Works, Power and Housing 423.0 26.6 1490.0

Tax Proposals in 2016 Budget Speech

  • There was no proposal to change tax rates or impose new taxes in 2016.
  • The budget speech was silent on the proposals to introduce a National Security Tax and the proposed increase in Tertiary Education Tax.
  • Government is however focused on measures to increase the tax base and overall compliance rate in the country.
  • Luxury tax is expected to generate NGN15billion but no disclosure of measures to implement.
  • It was mentioned that the tax rate for smaller businesses will be reduced.

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