SEE What FG Plans To Do In 2016 To Fix Budget System

The federal government plans to change approach towards budget planning that has been crippling Nigeria’s economy for years – see what they plan to do.

Vice president Yemi Osinbajo announced yesterday that the federal government plans to change its approach towards budget planning. He told that it will use a zero-based budgeting for its 2106 budget planning. This method of budgeting means that all activities, related costs and revenues are fully reviewed every time at the time of budget formulation.
Federal government hopes that the methodology of zero-based budgeting will help to spend money from the treasury more wisely, considering more careful planning of needs and costs.

Before that federal government used an envelope budgeting method based on planning the future expenditures and incomes out of current levels of expenditures and costs.
It gives the possibilities of wasting the much-needed financial resources and underestimates changes of costs comparing to the previous periods of time.
The Vice president disclosed the federal government’s plans for 2016 at the presidential villa in Abuja during a courtesy call on him by the National Economic Summit Group.
Besides plans to ust the zero-based budgeting model for the 2016 budget, the federal government also plans to focus on a “bottom-up approach to development” for the next four years.
Osinbajo also told that the introduction of the Treasury Savings Account for all the governing bodies was a policy to prevent the possibilities of financial leakages.

Another announced initiative by the federal government is establishing an infrastructure fund planned outside the budget to make funding critical areas of the economy such as power sector and roads easier.
The vice president also told that the federal government will look for ways of funding capital projects from the sources outside budget. 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.”
A month ago the presidency has issued a statement ordering every federal government ministry, parastatal and agencies to begin remitting its earnings into a Treasury Single Account (TSA).
TSA is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.
A week ago Nigeria’s President, Muhammadu Buhari has threatened to sanction those who are yet to remit all revenues due to the Federal Government and its agencies, following the Treasury Single Account (TSA) directive.
The directive from the federal government that every federal government ministry, parastatal and agencies should begin remitting its earnings into aTreasury Single Account (TSA) have had a spiral effect on the Nigerian banking industry.
Since the announcement, commercial banks in the country have reportedly started sacking some of their staff as they can no longer afford to keep them.
This is because of the massive withdrawals of funds by the agencies from their existing accounts in compliance with the government’s directive.