With concerns over 2016 deficit funding, the Federal Government is looking at raising over N1 trillion from plugging revenue loopholes as pressures mount against the revenue estimates in the 2016 budget.
This will be coming in addition to plans to raise N350 billion from recoveries of stolen funds in the on-going anti-graft war.
The 2016 budget financing plan, according a Finance ministry source, envisages significant revenue from blocking leakages expected to yield over N1.0 trillion during the 2016 fiscal year.
The Nigeria Customs Service, NCS; Nigerian National Petroleum Corporation, NNPC and the Nigerian Ports Authority, NPA, are the main targets for this revenue source.
The breakdown of the revenue side of the budget with the ministry shows several unconventional sources of funding for the budget.
Waste reduction initiatives
Key among them includes a revenue optimising measure expected to be complemented by initiatives meant to reduce wastage of public funds such as the recently established Efficiency Unit meant to identify and eliminate wasteful spending, duplication and other inefficiencies across Ministries, Departments and Agencies (MDAs).
Other waste reduction initiatives include engagement of costing experts to scrutinize the 2016 budget proposals with a view to further improving efficiency. Also, government intends to extend the Integrated Personnel Payroll Information System (IPPIS) to all MDAs in order to maintain a lean payroll.
With a projected revenue of N3.86 trillion in the face of dwindling crude oil receipts, government estimates that oil revenues contribute N820 billion of the total revenue; non-oil revenues, comprising Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies, are expected to contribute N1.45 trillion while independent revenues are expected to contribute N1.51 trillion through the enforcement of the Fiscal Responsibility Act, 2007 and public expenditure reforms in all MDAs.
Remittance of independent revenues
In addition, the government intends to significantly improve the collection and remittance of independent revenues from government agencies with the full implementation of the Treasury Single Account (TSA).
A Finance ministry source, who said the budget breakdown would answer all the posers raised by critics of the budget, explained that the delay in putting the budget together was as a result of the difficulties in balancing Nigerian’s expectations with realities on ground.
One of the key posers the budget elicited was the revenue shortfalls against increased expenditure where the budget envisaged to fund the deficit with about N1.8 trillion borrowing whereas the entire estimated revenue based on oil price of USD38 per barrel appears unrealistic, as oil prices have since crashed below the benchmark.
The crash has already made both the size of the budget deficit and the matching funding also unrealistic while creating additional deficit and funding gaps, while price recovery on sustained basis is not expected soon, according to international energy experts.
The finance ministry source also indicated that only N67 billion increase in tax revenue is expected as the government is not going to increase tax, but will expand the tax net.
Poor budgetary allocations to anti-corruption agencies
The budgetary provisions for anti-corruption war, according to some analysts, however, appear inconsistent with the hard line position of President Muhammadu Buhari as only a marginal 3.1 per cent increase was effected in their budget while many of them had their allocations significantly slashed, thus strengthening the concern of those routing for plea bargaining option.
Only four of the total nine federal agencies involved in anti-corruption activities got increased budget.
One of them with major increase in its budget was Fiscal Responsibility Commission, FRC, at N494 million, about 47 per cent increase from N336.8 million it received in last year’s budget.
Other major increases were for Bureau of Public Procurement, BPP, and Nigeria Extractive Industries Transparency Initiatives, NEITI, which had a 40 per cent increases each receiving N1.4 billion against 2015 amount of N1.0 billion.