The Federal Government is planning to use a zero-based budgeting format for its 2016 budget planning, the Vice President of the most populous black nation, Prof. Yemi Osinbajo, revealed.
Osinbajo 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,” Osinbajo said.
Osinbajo who stated this at his office on Tuesday during a courtesy visit by the National Economic Summit Group (NESG) also met with a delegation from the Chartered Institute of Stockbrokers (CIS) and the Association of Stockbroking Houses of Nigeria (ASHON).
The Vice President also told the NESG that the introduction of the new TSA policy and its implementation by Ministries, Department 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 will also focus on a bottom-up approach to development.
He disclosed further 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 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.
During his meeting with CIS and the Association of Stockbroking Houses of Nigeria, Osinbajo disclosed that the Federal Government will explore the avenue of utilizing the capital market as another means of providing alternative funding options for the execution of capital projects.
He also observed that allowing retail investors to come into the nation’s capital market ultimately will deepen the market with potentials for multiplier effects on other sectors of the economy.
The Vice President stated that some of the problems of the capital market was due to unethical practices by some market operators. He said those who caused the crash in the market in the past were not punished and called on the two bodies to engage in self-regulation as a means of protecting investors and the market.
In his remarks during the visit, 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 therefore remarked that a new Nigeria was being formed under the present leadership of President Muhammadu Buhari.