Vice President, Yemi Osinbajo disclosed in Abuja on Tuesday that the federal government was planning to use a zero-based budgeting format for its 2016 budget planning.
He said the new system would be properly coordinated to ensure that it was policy-driven, especially the proposed social intervention policy of the president Mohammdu Buhari’s administration.
Zero-based budgeting entails careful planning anchored on the needs and costs.
It is different from the current 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.
Osinbajo gave the hints on the 2016 budget during a courtesy call on him by the National Economic Summit Group (NESG) at the presidential villa.
The Vice President also noted that the introduction of the Treasury Savings Account, TSA, in the Ministries, Department and Agencies, MDAs was a policy initiative that would block perceived leakages within the government financial systems and make the budget a workable document
Disclosing that Buhari’s administration was articulating a four-year action plan that would guide it, Osinbajo stated that the “zero-based budgeting, (2016 budget) the Federal Government will also focus on a bottom-up approach to development.”
He further disclosed that the Federal Government is 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 said.
On its part, the NESG delegation hailed the Federal Government for the introduction of the new TSA policy, stating that it would serve as a part of the advocacy for a sound financial policy in Nigeria.
Similarly, 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 disclosed at the meeting that the Federal Government would explore the avenue of utilizing the capital market as another means of providing alternative funding options for the execution of capital projects.
According to him, “allowing retail investors to come into the nation’s capital market will ultimately deepen the market with potentials for multiplier effects on other sectors of the economy.”
The Vice President stated that the challenges facing the capital market included unethical practices by some market operators which he said stifled growth.
He regretted that there was no punitive measures for most operators responsible for the crash of the market in the past were and called on the two bodies to engage in self-regulation as a means of protecting investors and the market.
In his remarks, the leader of the delegation and Acting President of CIS, Mr. Oluwaseyi Abe, commended the achievements of the Buhari administration within 100 days, especially its impact on security, power and the anti-corruption crusade, noting its positive effects on the overall economy.
He remarked that a new Nigeria was being formed under the present leadership of President Muhammadu Buhari.
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