₦airaland Forum

TonyeBarcanista:
Where will they get the money to fund the budget? I hope nobody is considering loan?

Flets:
This government should be reminded that elections are over. Enough of these noises as reality have set in already.

Lets do some simple mathematics.
Nigeria's total crude production currently hovers at 2M barrel per day, but I will assume 2.5M barrel for sake of optimism
Crude oil sells at slightly above $40/ barrel but I will assume $45/ barrel
Most JV agreements with Oil corporations stands at an average of 60% for Nigerian govt.
Cost of production of oil for most companies stand at almost 50% but I will assume 30% (optimist case) and then 70% profit
Only about 52% of total earnings goes to the FG, the remaining goes to state allocations and host state derivation
Assuming an exchange rate 200 naira per dollar and 365 days a year

Federal Government can make approximately 1.8 trillion naira from crude sales for 2016 optimally. Details below
so 2.5Million x $45 x 60% x 70% x 52% x 200 x 365 = 1.8 Trillion Naira

Historically, crude has formed about 70% of our budgets.... following same logic, total budget can only be 2.6 trillion Naira (1.8Trillion/ 70%)

Even if we increase taxes, collapse all tax and duty exemptions and without any diversification efforts by the current government, we will be lucky to add another 1trillion the 2.6 trillion to make it a maximum of 3.6 trillion.

So realistically speaking, 8 trillion FG budget is impossible for 2016. Propagandically speaking, APC govt have said it and they believe their zombies will believe it.

Typical Jonathanians.

Same way someone once said Nigeria does not have N30tn in 5years.

First go and learn what is called ZERO BASED budgeting.

It is the most frugal system of budgeting where you assume you have no money in your pocket and you want to spend N8trn. Meaning you have to go street wise. Nothing like wastage, nothing like excess.

If in 3months after all the trillions spent on election, After the bailout, despite the sharp drop in crude oil price, TSA can still generate N1.4trn. You can then imagine what past government has been stealing.

BTW they are now in government now. So they now see the through picture of things clearer than they even did when they were in the opposition. So you cannot claim the don't know what they're saying.

DelGardo:
The vice president of Nigeria is traditionally in charge of the economy.

The economy under Jonathan was in tatters because Jona had no clue and Sambo was a ghost worker.

Osinbajo, on the other hand, seems to have a good grip on things. Long may it continue.

Change is here.

Hahahaha

MTN penalty of $1 trillion has covered the proposed budget of 2015 and remain.

PMB should ensure to be difference from others.

bigtt76:
That means more tax and less tax exemptions in the coming year.

110 million poor? So the remaining 70 million are rich? How come sir

base on world Bank index of $1 per day 1*#220=#220*30days=#6600. Which many youths and families can't boost of saving it a month. So yeah 100m people are poor in Nigeria that's the bitter truth from the government so that they can work harder to reduce it. Or do u want the government to lie to you that just 10m is poor or there is no poor people in Nigeria?

Didn't NOI say the capital expenditure was about 700 billion Naira for 2015.

8trillion kini ? we dey fight war? dats is way too high !! if it was jona now una go open una mouth like black and white TV ... APC!!! una days are numbered!!



just tell us how much amechi and tinubu go gt from dat 8 trillion naira daz all I wan know!!!



8 trillion
8000000000000... I hope say d zeros complete?

TonyeBarcanista:
Where will they get the money to fund the budget? I hope nobody is considering loan?

Barca, accept for once you were impressed and that Nigerian economy is in safe hands. Samboborimbo and GEJ couldn't have spoken economics in this manner. How will any so called world bank guru come and deceive these people? I know you are assured this man is not talking about borrowing in that epistle, let's watch them.

NgeneUkwenu:
It seems, you Guys don't understand the message or maybe the way the Punch Newspaper presented it.

Let me explain:

The 8Trillion Naira will be the total revenue generated by the Fed. Government in the next fiscal year. This will be made possible with the current introduction of TSA. No MDA (NNPC, NPA, NIMSA, Etc) will have a separate budget from that of the FG Govt. Unlike what we used to have. Therefore, the Fed budget will capture all their budgetary needs.

In the times past, these agencies generate, spend and pay a certain percentage of the surplus to the govt. They run the agencies as a separate country financially.

Zero Budgeting: Each Ministry/MDA will be given a "plain sheet of paper" to write what it needs for the fiscal year based on the economic policy of the Federal Government. With it, every kobo proposed by any agency or ministry will be justified. This is totally different from what was obtainable under PDP, where it operated what was known as budget padding, where the ministries just dust up the previous years budget and add some figures and Pronto, it becomes the new budget.

Thank you.
EOD!!!
cc: tonyebarcanista

Flets:
This government should be reminded that elections are over. Enough of these noises as reality have set in already.

Lets do some simple mathematics.
Nigeria's total crude production currently hovers at 2M barrel per day, but I will assume 2.5M barrel for sake of optimism
Crude oil sells at slightly above $40/ barrel but I will assume $45/ barrel
Most JV agreements with Oil corporations stands at an average of 60% for Nigerian govt.
Cost of production of oil for most companies stand at almost 50% but I will assume 30% (optimist case) and then 70% profit
Only about 52% of total earnings goes to the FG, the remaining goes to state allocations and host state derivation
Assuming an exchange rate 200 naira per dollar and 365 days a year

Federal Government can make approximately 1.8 trillion naira from crude sales for 2016 optimally. Details below
so 2.5Million x $45 x 60% x 70% x 52% x 200 x 365 = 1.8 Trillion Naira

Historically, crude has formed about 70% of our budgets.... following same logic, total budget can only be 2.6 trillion Naira (1.8Trillion/ 70%)

Even if we increase taxes, collapse all tax and duty exemptions and without any diversification efforts by the current government, we will be lucky to add another 1trillion the 2.6 trillion to make it a maximum of 3.6 trillion.

So realistically speaking, 8 trillion FG budget is impossible for 2016. Propagandically speaking, APC govt have said it and they believe their zombies will believe it.

[color=#550000][/color]

How can recurrent expenditure jump from N3T in 2015 to N6T in 2016. If the capital expenditure is N2T as against N1.5T in 2015, then the net budgetary value stands at N0.5T.Let it not be that those recurrent expenditures that are not captured in previous budgets are now lumped in to the new budget to make it look like more money is being generated.

mrvitalis:
I don't get..... this confusing.... first 8trn budget
.. Only 2trn as capital expenditure?. ... And u say u want 40% capital expenditure?
Or am I missing something?

this figure is an expecting budget not actual budget. Do u expect the recurrent expenditures to be equal to the capital expenditures? How will government pay salaries and allowances and maintenance remember that here in Nigeria government is the highest employer of labours. Government is sacking those greedy, well-fed, corrupt officials all in the name of reducing recurrent expenditures yet we are saying this governments na sack sack government. Try to understand

seunmsg:
How will the government fund an N8trillion budget in a period of low oil earnings? And N2trillion for capital expenditure out of N8trillion is absolutely unacceptable. This information is at best vague, I believe we will get a clearer picture of how the budget will look like in days to come.

I just hope this people know what they are doing .because if what I am thinking is what they intend to do then naija is doomed .

laposta:
You see where you miss it (the part made in bold)?

Total revenue generated by FG does not belong to the FG alone.

Only 52% of all revenues accruing to FG's coffers belong to the FG...the balance is shared between the States and LGs.

Perhaps you need to take 52% of N8 trillion and see where it puts the FG...

This article should help.

The House of Representatives said it has uncovered what may turn out Nigeria’s biggest fraud yet, accusing the Jonathan administration of spending N16 trillion on its super offices yearly, while the entire country is given a meagre budget of about N4 trillion.

The claim was made Sunday by the House Public Accounts Committee.

The committee said while the Nigerian government complains of revenue for key projects, the same government has allowed dozens of powerful offices, graded as “statutory and extra-ministerial departments” to spend a minimum of N16 trillion yearly.

The amount spent by the offices are not regulated, audited or appropriated by the National Assembly.

Much of the figure are generated by the respective offices and are deployed at the whims of their chief executives.

Such statutory offices include the Nigerian National Petroleum Corporation, NNPC, Central Bank of Nigeria, National Communications Commission, Federal Inland Revenue Services, and Nigerian Ports Authority.

The revelation came as part of an ongoing examination of finances of government and its 601 agencies, the House committee said.

The committee, which spoke through its chairman, Adeola Solomon-Olamilekan, on Sunday, said when combined with Nigeria’s official annual expenditure, the country spends over N20 trillion yearly.

Mr. Solomon-Olamilekan said the N4.3 trillion budget for 2015, amid an oil crisis, is a “far cry” which does not include the finances of “statutory and extra ministerial departments” which have been running “about N16 trillion” without public auditing.

“The N4.9tn, N4.6tn or N4.3tn, as the case may be, is the budget that the whole Nigerians are listening to but in the true sense of it, the budget of other statutory and extra-ministerial departments put together is about N16tn,” he said.

“So, the total overall budget year in year out is over N20tn, which the executive arm operates, but nobody is asking questions as to the implementation of all these budgets.

“Nobody is bringing information on the implementation of all these budgets; and this is one area Nigerians need to start asking questions in order to move this country forward,” he said.

The House committee said the federal government has encouraged the fraud to continue by deliberately refusing to fund the office of the Auditor General of the Federation, to weaken its capacity to check the violation.

The committee said by reducing the budget of office of Auditor General from N1.9 billion to N100 million in 2015, the government deliberately ensured the office no longer had the capacity to audit 601 departments and 144 foreign missions.

The big cut was carried out by the Ministry of Finance, citing falling oil revenues.

“How can we imagine that the capital budget of the office of AGF for the year 2015 was reduced from N1.9bn to N100?

“Can you also imagine an office of the AGF that has 144 foreign missions to audit and as we speak, between 1999 to date, that office has not audited up to 30 of these foreign missions while three quarter of these foreign missions are also revenue generating agencies?

“So, there is nobody to audit the revenue generated and the expenditure they incur.

“The office of the AGF has been short-changed and the budget has been reduced to nothing. As such, the government of the day is having a field day to carry out whatever its wants to do because they know they have an office that is not functioning,” Mr. Solomon-Olamilekan said.

Also, I think it is high time we expanded the responsibilities of the Auditor General. Probably create an Accountability Agency with constitutional rights, independent, and reports directly to the Senate.

Non-accountability is pivotal to the virulence of corruption. We should lay the right foundations. If we are increasing our budget to $8trn, at the end of the year, we should know what the money was used for, how it was used, and how to optimize spending in the future. If businesses do this, why not the government?

NgeneUkwenu:
It seems, you Guys don't understand the message or maybe the way the Punch Newspaper presented it.

Let me explain:

The 8Trillion Naira will be the total revenue generated by the Fed. Government in the next fiscal year. This will be made possible with the current introduction of TSA. No MDA (NNPC, NPA, NIMSA, Etc) will have a separate budget from that of the FG Govt. Unlike what we used to have. Therefore, the Fed budget will capture all their budgetary needs.

In the times past, these agencies generate, spend and pay a certain percentage of the surplus to the govt. They run the agencies as a separate country financially.

Zero Budgeting: Each Ministry/MDA will be given a "plain sheet of paper" to write what it needs for the fiscal year based on the economic policy of the Federal Government. With it, every kobo proposed by any agency or ministry will be justified. This is totally different from what was obtainable under PDP, where it operated what was known as budget padding, where the ministries just dust up the previous years budget and add some figures and Pronto, it becomes the new budget.

Sister, it has now become as clear as day. Thank you for this erudite explanation.

FLETS

Your analysis are very much in other with detailed insight. However, The government has made arraingment on how to finance the budget from borrowing other than its own revenue. For Instance, they intend to make use of the PENCOME fund which is about N6
trillion, and the vice president has stated severally that the country must source fund from many places and invest in infrastructure.

Flets:
This government should be reminded that elections are over. Enough of these noises as reality have set in already.

Lets do some simple mathematics.
Nigeria's total crude production currently hovers at 2M barrel per day, but I will assume 2.5M barrel for sake of optimism
Crude oil sells at slightly above $40/ barrel but I will assume $45/ barrel
Most JV agreements with Oil corporations stands at an average of 60% for Nigerian govt.
Cost of production of oil for most companies stand at almost 50% but I will assume 30% (optimist case) and then 70% profit
Only about 52% of total earnings goes to the FG, the remaining goes to state allocations and host state derivation
Assuming an exchange rate 200 naira per dollar and 365 days a year

Federal Government can make approximately 1.8 trillion naira from crude sales for 2016 optimally. Details below
so 2.5Million x $45 x 60% x 70% x 52% x 200 x 365 = 1.8 Trillion Naira

Historically, crude has formed about 70% of our budgets.... following same logic, total budget can only be 2.6 trillion Naira (1.8Trillion/ 70%)

Even if we increase taxes, collapse all tax and duty exemptions and without any diversification efforts by the current government, we will be lucky to add another 1trillion the 2.6 trillion to make it a maximum of 3.6 trillion.

So realistically speaking, 8 trillion FG budget is impossible for 2016. Propagandically speaking, APC govt have said it and they believe their zombies will believe it.

are you sure u are a qualified accountant? Because where is your PRUDENCY concept applied here? How can present price of crude oil at $40 per barrel and you expect it to be $45 per barrel in future? What about if it drops to $20 per barrel? What happens to your assumption?

philips70:
Barca, accept for once you were impressed and that Nigerian economy is in safe hands. Samboborimbo and GEJ couldn't have spoken economics in this manner. How will any so called world bank guru come and deceive these people? I know you are assured this man is not talking about borrowing in that epistle, let's watch them.

Bros, na where them wan see the money? Abi them plan to plunge us into debt?

if 40% is on capital expenditures and you say 2 trillion is the amount government is budgeting. Now if 40% is 2 trillion, it means the budget is 5 trillion. This VP should get his facts before speaking

OrlandoOwoh:
I wonder the type of VP Namadi Sambo was.

A 'ghost' VP.

The budget will be just a little over N5billion

Still better than PDP's 4.4billion budgets

TonyeBarcanista:
Bros, na where them wan see the money? Abi them plan to plunge us into debt?

Siddon look na dog name, pray make all of us enter next year jejely. Again, be rest assured it's not a debt issue.

oil was $105 during jonathans government.what did that idîot do with our money.

jomoh:
Typical Jonathanians.

Same way someone once said Nigeria does not have N30tn in 5years.

First go and learn what is called ZERO BASED budgeting.

It is the most frugal system of budgeting where you assume you have no money in your pocket and you want to spend N8trn. Meaning you have to go street wise. Nothing like wastage, nothing like excess.

If in 3months after all the trillions spent on election, After the bailout, despite the sharp drop in crude oil price, TSA can still generate N1.4trn. You can then imagine what past government has been stealing.

BTW they are now in government now. So they now see the through picture of things clearer than they even did when they were in the opposition. So you cannot claim the don't know what they're saying.

Maybe you need to go learn about zero based budgeting for yourself first.

IT IS NOT ASSUMING YOU HAVE NO MONEY IN YOUR POCKET ....... DO YOU UNDERSTAND THAT NOW?

Zero based budgeting means building your budget from new cost components and structures. It means developing new basis for all budget components and not referencing previous budget basis.

E.g. The 2015 budget for developing a kilometer of road would have been based on escalating 2014 actual cost to reflect current day basis. Under zero budget budgeting, no reference will be made to the previous budget basis.... rather the budget will be based on today's executable bids and rates.

Now run along.......

philips70:
Siddon look na dog name, pray make all of us enter next year jejely. Again, be rest assured it's not a debt issue.

Bros, shey them go manufacture the money ni? You never still understand say na mission #One Chance?

Confused APC.

So 2 trillion is 40% of 8 trillion? Clowns

DelGardo:
The vice president of Nigeria is traditionally in charge of the economy.

The economy under Jonathan was in tatters because Jona had no clue and Sambo was a ghost worker.

Osinbajo, on the other hand, seems to have a good grip on things. Long may it continue.

Change is here.

Stay there make pant dey wear you... The vice president that analyze how the #5k for unemployed youth can be actualize, and after the election says we don't have a database?


No be only Osibanjo na Obasanjo....

TonyeBarcanista:
Bros, shey them go manufacture the money ni? You never still understand say na mission #One Chance?

Next year na vision 4040 ni? No be GEJ and Sambo dey talk after hearing from Okonjo and Diezani o.

MRSALT:
How can recurrent expenditure jump from N3T in 2015 to N6T in 2016. If the capital expenditure is N2T as against N1.5T in 2015, then the net budgetary value stands at N0.5T.Let it not be that those recurrent expenditures that are not captured in previous budgets are now lumped in to the new budget to make it look like more money is being generated.

Other MDAs not captured previously cos they run independently as FG annual budgets,NNPC, FIR, Customs are her likes are now included. When add the fact, the APC promised free school feeding programme and the social package of 5k for 25million unemployed youth, then the 6trillion is not that high leaving 2trillion for capital projects.

philips70:
Next year na vision 4040 ni? No be GEJ and Sambo dey talk after hearing from Okonjo and Diezani o.

Bros, free GEJ na. The guy don lose election na Bubu de power now. Where una wan see the phantom N8tr?

Flets:
This government should be reminded that elections are over. Enough of these noises as reality have set in already.

Lets do some simple mathematics.
Nigeria's total crude production currently hovers at 2M barrel per day, but I will assume 2.5M barrel for sake of optimism
Crude oil sells at slightly above $40/ barrel but I will assume $45/ barrel
Most JV agreements with Oil corporations stands at an average of 60% for Nigerian govt.
Cost of production of oil for most companies stand at almost 50% but I will assume 30% (optimist case) and then 70% profit
Only about 52% of total earnings goes to the FG, the remaining goes to state allocations and host state derivation
Assuming an exchange rate 200 naira per dollar and 365 days a year

Federal Government can make approximately 1.8 trillion naira from crude sales for 2016 optimally. Details below
so 2.5Million x $45 x 60% x 70% x 52% x 200 x 365 = 1.8 Trillion Naira

Historically, crude has formed about 70% of our budgets.... following same logic, total budget can only be 2.6 trillion Naira (1.8Trillion/ 70%)

Even if we increase taxes, collapse all tax and duty exemptions and without any diversification efforts by the current government, we will be lucky to add another 1trillion the 2.6 trillion to make it a maximum of 3.6 trillion.

So realistically speaking, 8 trillion FG budget is impossible for 2016. Propagandically speaking, APC govt have said it and they believe their zombies will believe it.

In addition, APC FG has claimed that 2016 budget will be developed through zero budget based budgeting. Now without ministers who are supposed to draw up the budget components within their ministries ..... how exactly did Osibanjo come up with 8 trillion when zero based budget was the agreed method?

Good analysis but with shallow inputs.

Budgets are not only financed by your revenue. You can finance budget with debts also. It only depends on what your plans, needs, strategies and situation are.

Also, you have, in a parochial way, boxed Nigeria's source of revenue to Taxes and Oil only. For the purpose of this write-up, other ones but not limited to them are:

1. Gases- NLNG;
2. Inflow from Royalties (Oil and Gas and other ones)
3. Non- Oil revenues
4. Custom Duties
4. Fines and Penalties
5. Licenses
6. Inflow from abroad (Nigerians working in other countries)
7. Other ones that I cant remember now.

In essence, we can finance it, if that is our plan and desire. That is the best way to revamp our dying economy. By putting much money there with capital expenditure taking a huge chunk and recurrent touching the poor. We would have made our infrastructure back to life and the populace shall be glad.

We just dey here billions nd trillions everyday