The Federal Government is planning to use a zero-based budgeting format for its 2016 budget planning, Vice President Yemi Osinbajo has said.

The Vice President said the zero-based budgeting would be carefully coordinated to ensure that it is policy-driven, especially regarding the proposed social intervention policy of the Buhari administration.

Zero-based budgeting is planning according to needs and costs, different from the existing Envelope Budgeting or traditionally incremental budgeting whereby the planning is based on existing income and expenditure as the deciding factor in national financial planning levels, which often incurs waste and assumes previous costs as constant.

According to spokesperson Laolu Akande, Mr. Osinbajo, a professor, spoke Monday in his office during a courtesy visit by the National Economic Summit Group (NESG).
Earlier Tuesday, the Vice President also met with a delegation from the Chartered Institute of Stockbrokers (CIS) and the Association of Stockbroking Houses of Nigeria (ASHON).

The Vice President, according to a statement by Akande, also told the NESG that the introduction of the new Treasury Single Account [TSA] policy and its implementation by ministries, departments and agencies was a creative way of blocking leakages in the system to make way for a workable budget.

He said with the zero-based budgeting, the Federal Government would also focus on a bottom-up approach to development.
He disclosed further that the Federal Government was planning to set up an infrastructure fund in order to facilitate easy funding for critical areas of the economy.

The infrastructure fund, according to the Vice President, would be planned outside of the budget, to handle major segments of the economy such as road and power.

“Government is working out a document that would guide the administration within the four years of its life-span”, he disclosed.
During the meeting with the NESG, the delegation praised the Federal Government for the introduction of the new TSA policy and offered to be part of the advocacy as a sound financial policy.

There are indications that the new zero-budgeting policy of the present administration may render several ministries, departments and agencies of government (MDAs) idle in 2016 as they could be denied of capital votes for project implementation.

It followed government’s decision to dump the hitherto envelope or incremental budgeting system, whereby capital votes were indiscriminately allocated to agencies and parastatals annually for projects, with minimal results often achieved.

But faced with serious fiscal challenges occasioned by the drastic drop in oil prices, which had more than halved government revenues, the present administration of President Muhammmadu Buhari has resolved to cut costs and prioritise spendings to projects that would have immediate impact on Nigerians.

THISDAY gathered that as a result, government has decided that only MDAs which fall within its prioritised programmes would be allocated capital votes in 2016.

By implication, other MDAs would be left without funding to undertake capital projects next year and this has already caused anxiety for most of them.

The fears stemmed from the fact that such agencies could fall victim of the proposed move to rationalise public institutions, it was further gathered.

Speaking in an interview with THISDAY on the new zero budgeting policy of government, Secretary to the National Planning Commission (NPC), Mr. Bassey Akpanyung, said it would not be business as usual for project implementation in the country.

He said: “We are not going to use incremental where you have to add on the budget you had from the previous year and go on; what it really means is that we are just starting as if there was no programme at all and then we look at specific sectors that are priority to government and decide which project we want to implement, look at the pros and cons, the multiplier effects of that project and linkages to the economy and then decide that it is worth implementing and then we set money on it with the feasibility study that has been done and then the proper costing and then we put money on it and implement it to the end.”

He said rather than give small amount of capital allocations to all the MDAs “which ends up not getting any project completed” government would now select specific core MDAs and core sectors and consider projects that’ll actualise the policy of government.”

According to him: “If the MDAs are those that are priority-and that’s where the thrust of the government is-surely, they’ll get their capital budget but if it’s those ones that are not on the priority, then maybe not in 2016, may be in 2017 because there’s no MDAs that’s not essential to the economy.

“But then we are going to be facing the implementation of the capital project to just ensure that it is those essential projects and programmes that speak directly to the policy of government that are implemented.”

Continuing, he said: “We pick a particular policy like the social protection policy; what specific programmes are we going to be doing there-we do the costing-how many people are going to be covered and once we decide that these are the numbers we are going to cover, this is the amount of money and then government budgets directly on it irrespective of what had happened in the past.”

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If it's properly implemented, it will help in accelerating development in key areas that will have direct bearing on the citizens.

Good idea anyway. As long as it is not used to selectively enrich a section of the country as we witnessed in the last administration.

I think the 2015 message from the people has been received by the polithiefians...GONE are those days, there will be a massive budget with a minimal effect on the people and society.

Very sensible thing to do. the 2016 budget will be the first done by this new administration and it must get it right

Realdeals:
If it's properly implemented, it will help in accelerating development in key areas that will have direct bearing on the citizens.

you did not understand
,let me expand the word for you


"ZERO BUDGET" it means "NO BUDGET"

Zero budget means no budget, what MDAs will get is just salary wage bill, all contracts will come from federal executive council and the contractors will be paid by cbn.

tommysparks:
Zero budget means no budget, what MDAs will get is just salary wage bill, all contracts will come from federal executive council and the contractors will be paid by cbn.

That is very good and welcome.

Interesting days ahead.

Pray for Nigeria please

With ZeroBasedBudget, you have to justify your proposed spendings before its allocated to you. So whatz the fear?

If you don't need capital budget, don't ask for it. Yes, it will deny budget padding the budget for subsequent movement but it will prevent idle funds and fraud.

omowolewa:
With ZeroBasedBudget, you have to justify your proposed spendings before its allocated to you. So whatz the fear?

If you don't need capital budget, don't ask for it. Yes, it will deny budget padding the budget for subsequent movement but it will prevent idle funds and fraud.

you don't have proposed spending in zero budget!
what you have is "needs",cost and fg.
no proposed budget!

Federal Executive Government has no powers to use Nigeria's kobo without approval by the NASS hence the proposition is just for academic exercise and dead on arrival.

The NASS shouldn't consider nor approve this obnoxious hidden agenda meant to implement 5% and 97% irrational distribution of capital development to accomplish the Northern hijack of infrastructural developments in Nigeria.

Say no to this despotic design meant to eliminate checks and balances in our democracy.

Buhari needs ministers ASAP

Baba! This is not Just-In-Time issue where your needs are met as you present them. A budget Zero/incremental is still a proposal till approved by the NASS.

Enjoy your day

baralatie:

you don't have proposed spending in zero budget!
what you have is "needs",cost and fg.
no proposed budget!

baralatie:

you did not understand
,let me expand the word for you


"ZERO BUDGET" it means "NO BUDGET"

It is actually zero based budgeting and it does not mean NO BUDGET.

It simply means as at the point of preparing the budget, every projects/programs will start from a zero base. There will be no reference to the previous year position of that project or program. Funds will be allocated to projects and programs based on importance and need. Once the justification is established, adequate funds will be allocated and the total allocations will form the budget.

seunmsg:



It is actually zero based budgeting and it does not mean NO BUDGET.

It simply means as at the point of preparing the budget, every projects/programs will start from a zero base. There will be no reference to the previous year position of that project or program. Funds will be allocated to projects and programs based on importance and need. Once the justification is established, adequate funds will be allocated and the total allocations will form the budget.

funds WILL BE ALLOCATED BAISED ON HIERARCHY OF NEED.

it means No budget!

omowolewa:
Baba! This is not Just-In-Time issue where your needs are met as you present them. A budget Zero/incremental is still a proposal till approved by the NASS.

Enjoy your day

how will nass verify a "zero budget"

baralatie:

funds WILL BE ALLOCATED BAISED ON HIERARCHY OF NEED.

it means No budget!

You don't know what you are talking about.

seunmsg:



You don't know what you are talking about.

it is funny isn't it.
a zero budget literarily means no budget unless you FORECAST your financial expenditures and revenues for the following year.
if you don't and what you want is a zero based forecast well.
what do you call it?

The economic policies being put in by Mr President and his team are medivial and ancient, from Treasury Single Account(TSA) to the banking policies and Zero budgeting are archaic and extremely too conservative for a mobile economy.
Nigerians should be told the truth we are already in a recession.

Gooodnight bro.

baralatie:

how will nass verify a "zero budget"

omowolewa:
Gooodnight bro.

hahahahahahaha! don't worry about it. have a lovely evenning and remember Nigeria in your prayers!

zero~based budgetting means that fg will embark on projects that will be time based with no recourse 2 d amount budgetted 2 such projects in d preceding year as it's d case 4 d incremental budgetting. here, there's no anticipatory allocation of funds as all disbursement of funds will be need-based. it is aimed at curbing wastages and fraud.

Okanokan:
The economic policies being put in by Mr President and his team are medivial and ancient, from Treasury Single Account(TSA) to the banking policies and Zero budgeting are archaic and extremely too conservative for a mobile economy.
Nigerians should be told the truth we are already in a recession.

What has zero based or incremental budget got to do with recession? And how is zero based budgeting (which is used by 99% of high performing companies in the world) archaic?

With due respect you have little knowledge of the subject under discussion and you might end up misleading people with you myopic contribution.

[quote author=DelGardo post=38446452]

What has zero based or incremental budget got to do with recession? And how is zero based budgeting (which is used by 99% of high performing companies in the world) archaic?

With due respect you have little knowledge of the subject under discussion and you might end up misleading people with you myopic contribution.

Nigerians should be told the truth about the economic situation of our country, there is no need carrying out a comparative analysis between a Nation and first class Companies, for goodness sake NIGERIA is nation populated by million of people not company employing fifty thousand person and making profit for itself.
If you had read between the line yu will note we taking together the totality of all Mr President directives on the economy from TSA, FREEZE ON DOMICILIARY ACCT, NOT ABLE TO ACCESS MORE THAN 500,000 FROM THE COUNTER, THE GREECE-LIKE QUEUE ON ATM, BAILOUT, etc, tells one thing we are in for a long long night. Don't deceive your self this is beyond what is economics?

Okanokan:
Nigerians should be told the truth about the economic situation of our country, there is no need carrying out a comparative analysis between a Nation and first class Companies, for goodness sake NIGERIA is nation populated by million of people not company employing fifty thousand person and making profit for itself.
If you had read between the line yu will note we taking together the totality of all Mr President directives on the economy from TSA, FREEZE ON DOMICILIARY ACCT, NOT ABLE TO ACCESS MORE THAN 500,000 FROM THE COUNTER, THE GREECE-LIKE QUEUE ON ATM, BAILOUT, etc, tells one thing we are in for a long long night. Don't deceive your self this is beyond what is economics?

TSA policy is to bring accountability to government revenue management and fight corruption.
Freeze on dom accounts is to arrest naira devaluation since our currency is not yet convertible
Not being able to collect 500k over the counter is a continuation of Sanusi's monetary policy mgt, which has numerous benefits, but is outside the scope of the topic
ATM queues have very little to do with recession so I don't know how that is relevant. We had ATM queues when oil was trading at high prices too.

The oil boom is gone. Jonathan and his cohorts mismanaged surplus earnings and this administration is taking steps to put things right. Screaming about recession at every turn will not make things better.

And to develop we must adopt best practices like zero-based budget and upright revenue administration. That is the change we voted for.

[quote author=DelGardo post=38447885]

TSA policy is to bring accountability to government revenue management and fight corruption.
Freeze on dom accounts is to arrest naira devaluation since our currency is not yet convertible
Not being able to collect 500k over the counter is a continuation of Sanusi's monetary policy mgt, which has numerous benefits, but is outside the scope of the topic
ATM queues have very little to do with recession so I don't know how that is relevant. We had ATM queues when oil was trading at high prices too.

The oil boom is gone. Jonathan and his cohorts mismanaged surplus earnings and this administration is taking steps to put things right. Screaming about recession at every turn will not make things better.

And to develop we must adopt best practices like zero-based budget and upright revenue administration. That is the change we voted for.

Atlas you now responding maturedly as you ought have done initially.
Firstly The TSA policy yu said is for accountability, Fine! At what cost in terms of time, The economic value of time?
Secondly, on the issue of Dom Account is to arrest devaluation of our currency, on the contrary the non devaluation of currency will lead to capital flight, and also stop foreign direct investment, because as it is investors are not prepared to invest in Nigeria because they are of the opinion that our naira is over-valued. Moreso with dwindling resources from the oil/gas sector i imagine how we will sustain the naira.
Thirdly on the issue of depositors to access thier fund in excesses of 500,000 and the queue in Atm posit one thing trouble, Nigerians now keep thier money at home or preferably join OSUSU group, the question would be, if Nigerians are not banking what are the implication to the banking sector of the nigerian economy. While not defending Jonathan on the management of our oil boom, blame should go out more to our Governors who at every twist and turn were armtwisting the federal government, the Apc Government at the State level is as much to blame as the Pdp, the leadership of both parties mismanage, missapplied and misappropriated our common patrimony. Goodnight sir!