empirical analysis of nigeria budget
TRANSCRIPT
Nigeria Budget & Nigeria Budget & Nigeria Budget & Nigeria Budget & IIIIts Componentsts Componentsts Componentsts Components
A budget is an essential aspect of Individual,Organisation and Government financials. It is a planstated in monetary terms.
TheTheTheThe purposepurposepurposepurpose ofofofof BudgetBudgetBudgetBudget isisisis totototo::::� Provide a forecast of revenues and expenditures� Enable the actual financial operation of thebusiness to be measured against the forecast.
� Establish the cost constraint for a project,program, or operation
Source: wikipediawikipediawikipediawikipedia
Why do we produce budgetsWhy do we produce budgetsWhy do we produce budgetsWhy do we produce budgets????� To control resources� To communicate plans to various Stakeholders� To motivate and strive to achieve budget goals� To evaluate the performance� To provide visibility into performance
The Nigeria budget is made up of fourcomponents:
� Part A – Statutory Transfers� Part B – Debts Service� Part C – Recurrent Expenditure (non-debt)� Part D – Capital Expenditure
Statutory Statutory Statutory Statutory TransferTransferTransferTransfer
Debt ServiceDebt ServiceDebt ServiceDebt ServiceRecurrent Recurrent Recurrent Recurrent ExpenditureExpenditureExpenditureExpenditure
Capital Capital Capital Capital ExpenditureExpenditureExpenditureExpenditure
Consolidated Revenue Fund of the FederationConsolidated Revenue Fund of the FederationConsolidated Revenue Fund of the FederationConsolidated Revenue Fund of the Federation
MDA ExpenditureMDA ExpenditureMDA ExpenditureMDA Expenditure
The Federal Government is required by law to makecertain mandatory expenditures annually in respect of:
Statutory Transfer
Statutory Statutory Statutory Statutory Transfer:Transfer:Transfer:Transfer:
NJCNJCNJCNJC
NDDCNDDCNDDCNDDC
UBECUBECUBECUBEC
INECINECINECINEC
NASSNASSNASSNASS
NHRCNHRCNHRCNHRC
The National Judicial Council
The Niger Delta Development Commission
The Universal Basic Education Commission
The Independent National Electoral Commission
The National Assembly
The National Human Rights Commission
Whenever the Federal Governmentspends more money than the revenues itearns, it must find the financial resourcesto pay for this additional spending.
Debt Service
Debt Service:Debt Service:Debt Service:Debt Service:
Domestic Domestic Domestic Domestic DebtsDebtsDebtsDebts
Foreign Foreign Foreign Foreign DebtsDebtsDebtsDebts
Moneys borrowed within Nigeria
moneys borrowed from outside Nigeria
When the government pays interest and principal on its debts, this is referred to as Debt Debt Debt Debt Service.Service.Service.Service.
StatutoryStatutoryStatutoryStatutory TransferTransferTransferTransfer &&&& DebtDebtDebtDebt ServicesServicesServicesServices
Statutory Statutory Statutory Statutory TransferTransferTransferTransfer
Debts Debts Debts Debts ServicesServicesServicesServices
18.73%
Statutory Transfers Statutory Transfers Statutory Transfers Statutory Transfers and Debt Service Debt Service Debt Service Debt Service currently make up on average about
18.73%18.73%18.73%18.73% of Federal spending
Spending by the Ministries, Departments and Agencies(MDA)(MDA)(MDA)(MDA) of Government on SalariesSalariesSalariesSalaries, PensionsPensionsPensionsPensions & OverheadsOverheadsOverheadsOverheads
Recurrent (non-debt)
Recurrent Expenditure (nonRecurrent Expenditure (nonRecurrent Expenditure (nonRecurrent Expenditure (non----debt):debt):debt):debt):
SalariesSalariesSalariesSalaries
OverheadsOverheadsOverheadsOverheads
PensionsPensionsPensionsPensions
The Federal Government employspeople to work in the various MDAs andpays them salaries in order to maintainthe administration of government andcontinue to provide public goods andservices.
In addition to the pension contributionspaid on behalf of workers under theContributory Pension Scheme, theFederal Government continues to paythe pensions of existing pensionersunder the old Pay-As-You-Go System.
Payment for electricity, water,telecommunications, office rent, officeequipment and consumables, stafftraining, transportation, etc.
Capital Expenditure is used to provide infrastructure such asroads, water and power; fund educational services such asschools, colleges and universities; and provide healthcarefacilities and services among others.
Capital Expenditure:Capital Expenditure:Capital Expenditure:Capital Expenditure:
Capital Expenditure
InfrastructureInfrastructureInfrastructureInfrastructure
HealthcareHealthcareHealthcareHealthcare
Educational Educational Educational Educational ServicesServicesServicesServices
Recurrent & Capital Expenditure:Recurrent & Capital Expenditure:Recurrent & Capital Expenditure:Recurrent & Capital Expenditure:
Recurrent Recurrent Recurrent Recurrent ExpenditureExpenditureExpenditureExpenditure
Capital Capital Capital Capital ExpenditureExpenditureExpenditureExpenditure
81.27%
The balance of 81.27% is MDA Expenditure, that is, money spent by the MDAs of Government to
provide public goods and services
Nigeria Budget in a nutshell:Nigeria Budget in a nutshell:Nigeria Budget in a nutshell:Nigeria Budget in a nutshell:
Statutory Statutory Statutory Statutory TransferTransferTransferTransfer
Debt Debt Debt Debt ServicesServicesServicesServices
Recurrent Recurrent Recurrent Recurrent ExpenditureExpenditureExpenditureExpenditure
Capital Capital Capital Capital ExpenditureExpenditureExpenditureExpenditure
MDA ExpenditureMDA ExpenditureMDA ExpenditureMDA Expenditure
NJCNJCNJCNJCNDDCNDDCNDDCNDDCUBECUBECUBECUBECINECINECINECINECNASSNASSNASSNASSNHRCNHRCNHRCNHRC
Domestic Domestic Domestic Domestic DebtsDebtsDebtsDebtsForeign Foreign Foreign Foreign DebtsDebtsDebtsDebts
SalariesSalariesSalariesSalaries
PensionsPensionsPensionsPensions
OverheadsOverheadsOverheadsOverheads
InfrastructureInfrastructureInfrastructureInfrastructure
Educational Educational Educational Educational ServicesServicesServicesServices
HealthcareHealthcareHealthcareHealthcare
≈ 81.27%≈ 18.73%
Empirical Analysis of Budget Components Empirical Analysis of Budget Components Empirical Analysis of Budget Components Empirical Analysis of Budget Components
YEARYEARYEARYEAR BUDGET COMPONENTSBUDGET COMPONENTSBUDGET COMPONENTSBUDGET COMPONENTS ALLOCATIONALLOCATIONALLOCATIONALLOCATION %%%% %%%%
2007200720072007
TOTAL - STATUTORY TRANSFERS 102,300,000,000 4.51%18.90
TOTAL - DEBTS SERVICE 326,000,000,000 14.38%
TOTAL - RECURRENT (NON-DEBT) 1,056,563,540,997 46.62%81.10
TOTAL - CAPITAL EXPENDITURE 781,530,882,480 34.48%
AGGREGATE EXPENDITURE 2,266,394,423,477
2006200620062006
TOTAL - STATUTORY TRANSFERS 86,460,000,000 4.61%20.04
TOTAL - DEBTS SERVICE 289,500,000,000 15.43%
TOTAL - RECURRENT (NON-DEBT) 961,108,775,596 51.22%79.96
TOTAL - CAPITAL EXPENDITURE 539,233,587,755 28.74%
AGGREGATE EXPENDITURE 1,876,302,363,351
2005200520052005
TOTAL - STATUTORY TRANSFERS 89,600,000,000 4.98%24.74
TOTAL - DEBTS SERVICE 355,723,000,000 19.76%
TOTAL - RECURRENT (NON-DEBT) 737,330,997,094 40.96%75.26
TOTAL - CAPITAL EXPENDITURE 617,284,246,044 34.29%
AGGREGATE EXPENDITURE 1,799,938,243,138
2004200420042004
TOTAL - STATUTORY TRANSFERS 532,324,500,000 29.72%50.35
TOTAL - DEBTS SERVICE 369,369,000,000 20.63%
TOTAL - RECURRENT (NON-DEBT) 539,286,472,751 30.11%49.65
TOTAL - CAPITAL EXPENDITURE 349,868,371,837 19.54%
AGGREGATE EXPENDITURE 1,790,848,344,588
((((2004 2004 2004 2004 –––– 2007200720072007))))
Empirical Analysis of Budget Components Empirical Analysis of Budget Components Empirical Analysis of Budget Components Empirical Analysis of Budget Components
YEARYEARYEARYEAR BUDGET COMPONENTSBUDGET COMPONENTSBUDGET COMPONENTSBUDGET COMPONENTS ALLOCATIONALLOCATIONALLOCATIONALLOCATION %%%% %%%%
2011
TOTAL - STATUTORY TRANSFERS 196,115,163,718 4.64%17.47
TOTAL - DEBTS SERVICE 542,381,827,452 12.83%
TOTAL - RECURRENT (NON-DEBT) 2,481,705,176,915 58.72%82.53
TOTAL - CAPITAL EXPENDITURE 1,005,989,391,174 23.80%
AGGREGATE EXPENDITURE 4,226,191,559,259
2010
TOTAL - STATUTORY TRANSFERS 180,279,158,994 3.91%14.70
TOTAL - DEBTS SERVICE 497,071,797,452 10.79%
TOTAL - RECURRENT (NON-DEBT) 2,077,358,560,347 45.08%85.30
TOTAL - CAPITAL EXPENDITURE 1,853,906,761,420 40.23%
AGGREGATE EXPENDITURE 4,608,616,278,213
2009
TOTAL - STATUTORY TRANSFERS 140,693,160,103 4.90%14.78
TOTAL - DEBTS SERVICE 283,649,892,795 9.88%
TOTAL - RECURRENT (NON-DEBT) 1,649,429,453,681 57.46%85.22
TOTAL - CAPITAL EXPENDITURE 796,737,536,101 27.76%
AGGREGATE EXPENDITURE 2,870,510,042,679
2008
TOTAL - STATUTORY TRANSFERS 187,600,000,000 7.53%22.46
TOTAL - DEBTS SERVICE 372,200,000,000 14.94%
TOTAL - RECURRENT (NON-DEBT) 1,259,121,253,061 50.52%77.54
TOTAL - CAPITAL EXPENDITURE 673,155,465,876 27.01%
AGGREGATE EXPENDITURE 2,492,076,718,937
((((2008 2008 2008 2008 –––– 2011201120112011))))
Empirical Analysis of Budget Components Empirical Analysis of Budget Components Empirical Analysis of Budget Components Empirical Analysis of Budget Components
YEARYEARYEARYEAR BUDGET COMPONENTSBUDGET COMPONENTSBUDGET COMPONENTSBUDGET COMPONENTS ALLOCATIONALLOCATIONALLOCATIONALLOCATION %%%% %%%%
2013201320132013
TOTAL - STATUTORY TRANSFERS 387,976,000,000 7.7819.65
TOTAL - DEBTS SERVICE 591,764,000,000 11.87
TOTAL - RECURRENT (NON-DEBT) 2,386,024,770,349 47.8480.35
TOTAL - CAPITAL EXPENDITURE 1,621,455,655,252 32.51
AGGREGATE EXPENDITURE 4,987,220,425,601
2012201220122012
TOTAL - STATUTORY TRANSFERS 397,929,101,917 8.3820.16
TOTAL - DEBTS SERVICE 559,580,000,000 11.78
TOTAL - RECURRENT (NON-DEBT) 2,471,814,067,335 52.0579.84
TOTAL - CAPITAL EXPENDITURE 1,319,777,651,919 27.79
AGGREGATE EXPENDITURE 4,749,100,821,170
((((2012 2012 2012 2012 –––– 2013201320132013))))
Graphical Representation of Statutory TransferGraphical Representation of Statutory TransferGraphical Representation of Statutory TransferGraphical Representation of Statutory Transfer((((2004 2004 2004 2004 –––– 2013201320132013))))
7.78%
8.38%
4.64%3.91%
4.90%
7.53%
4.51% 4.61% 4.98%
29.72%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
TOTAL - STATUTORY TRANSFERS
2013201320132013 2012201220122012 2011201120112011 2010201020102010 2009200920092009 2008200820082008 2007200720072007 2006200620062006 2005200520052005 2004200420042004 AVGAVGAVGAVGNJCNJCNJCNJC 17.27% 21.36% 48.44% 50.48% 55.44% 41.58% 42.03% 40.48% 36.83% 5.64% 35.95%
NDDCNDDCNDDCNDDC 15.81% 13.74% 23.86% 24.93% 19.28% 37.26% 23.46% 24.27% 32.14% 2.63% 21.74%
UBECUBECUBECUBEC 19.66% 17.15% 27.70% 24.60% 25.28% 21.16% 34.51% 35.25% 31.03% 23.63%
NASSNASSNASSNASS 38.66% 37.70% 56.72% 85.54% 45.86% 39.31% 58.65% 52.05% 61.87% 6.52% 48.29%
INECINECINECINEC 8.25% 10.05% 23.15% 27.85% 11.40% 6.77% 63.03% 6.46% 15.70%
NHRCNHRCNHRCNHRC 0.35% 0.03% 0.04%
Top Spenders: 1Top Spenders: 1Top Spenders: 1Top Spenders: 1stststst = NASS= NASS= NASS= NASS 2222ndndndnd =NJC=NJC=NJC=NJC 3333rdrdrdrd = UBEC= UBEC= UBEC= UBEC
Graphical Representation of Debt ServicesGraphical Representation of Debt ServicesGraphical Representation of Debt ServicesGraphical Representation of Debt Services((((2004 2004 2004 2004 –––– 2013201320132013))))
11.87%11.78% 12.83%
10.79%9.88%
14.94%14.38%
15.43%
19.76%20.63%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
TOTAL - DEBTS SERVICE
2013201320132013 2012201220122012 2011201120112011 2010201020102010 2009200920092009 2008200820082008 2007200720072007 2006200620062006 2005200520052005 2004200420042004 AVGAVGAVGAVGDOMESTIC DOMESTIC DOMESTIC DOMESTIC DEBTSDEBTSDEBTSDEBTS
91.82% 91.49% 92.82% 93.18% 80.31% 82.27% 81.29% 75.99% 52.22% 50.29% 79.17%
FOREIGN FOREIGN FOREIGN FOREIGN DEBTSDEBTSDEBTSDEBTS
8.18% 8.51% 7.18% 6.82% 19.69% 17.73% 18.71% 24.01% 47.78% 49.71% 20.83%
Graphical Representation of Recurrent ExpenditureGraphical Representation of Recurrent ExpenditureGraphical Representation of Recurrent ExpenditureGraphical Representation of Recurrent Expenditure((((2004 2004 2004 2004 –––– 2013201320132013))))
47.84%
52.05%
58.72%
45.08%
57.46%
50.52%
46.62%
51.22%
40.96%
30.11%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
TOTAL RECURRENT (NON-DEBT)
MDAsMDAsMDAsMDAs GrossGrossGrossGross %%%%EDUCATION 12.66
POLICE FORMATION AND COMMANDS 11.33
DEFENCE/MOD/ARMY/AIR FORCE/NAVY 11.00
HEALTH 7.38
INTERIOR 6.73
Top Spenders of Recurrent Expenditure:Top Spenders of Recurrent Expenditure:Top Spenders of Recurrent Expenditure:Top Spenders of Recurrent Expenditure:
Graphical Representation of Capital ExpenditureGraphical Representation of Capital ExpenditureGraphical Representation of Capital ExpenditureGraphical Representation of Capital Expenditure((((2004 2004 2004 2004 –––– 2013201320132013))))
Top Spenders of Recurrent Expenditure:Top Spenders of Recurrent Expenditure:Top Spenders of Recurrent Expenditure:Top Spenders of Recurrent Expenditure:
32.51%
27.79%
23.80%
40.23%
27.76% 27.01%
34.48%
28.74%
34.29%
19.54%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
TOTAL CAPITAL EXPENDITURE
MDAs Gross %Gross %Gross %Gross %WORKS 13.58
POWER 10.64
FEDERAL CAPITAL TERRITORY ADMINISTRATION 10.18
AGRICULTURE & RURAL DEVELOPMENT 6.57
WATER RESOURCES 5.40
EDUCATION 5.21
TRANSPORT 4.81
HEALTH 4.73
DEFENCE/MOD/ARMY/AIR FORCE/NAVY 3.34
47.84%
52.05%
58.72%
45.08%
57.46%
50.52%
46.62%
51.22%
40.96%
30.11%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
Statutory Transfer
Debt Services
Recurrent Expenditure
Capital Expenditure
Graphical Representation of Graphical Representation of Graphical Representation of Graphical Representation of All Budget ComponentsAll Budget ComponentsAll Budget ComponentsAll Budget Components
Evidently, Recurrent Expenditure (Salaries, Recurrent Expenditure (Salaries, Recurrent Expenditure (Salaries, Recurrent Expenditure (Salaries, Pensions and Overheads) Pensions and Overheads) Pensions and Overheads) Pensions and Overheads) enjoys a huge share of
Nigeria’s yearly budget
Summary of the Budget ComponentsSummary of the Budget ComponentsSummary of the Budget ComponentsSummary of the Budget Components
Recurrent ExpenditureRecurrent ExpenditureRecurrent ExpenditureRecurrent Expenditure
48.06%48.06%48.06%48.06%
(Salaries, Pensions & Overhead costs)
Capital ExpenditureCapital ExpenditureCapital ExpenditureCapital Expenditure
(Infrastructure, Educational Services & Health)
Debt ServicesDebt ServicesDebt ServicesDebt Services
(Domestic & Foreign Debts)
Statutory Statutory Statutory Statutory TransferTransferTransferTransfer(NJCNDDCUBECNASSINECNHRC)29.62%29.62%29.62%29.62% 14.23%14.23%14.23%14.23%
8.10%8.10%8.10%8.10%
(2004 (2004 (2004 (2004 –––– 2013)2013)2013)2013)
Freely share, freely use and freely acknowledge the source – © Wale Micaiah
DataDataDataData sourcesourcesourcesource::::- Budgit (http://www.budgit.com/)- Nigeria Budget office (www.budgetoffice.gov.ng)
Analysis by: Wale Micaiah Wale Micaiah Wale Micaiah Wale Micaiah (M.sc., CISM, CCNP-Sec, MCSA)
e: e: e: e: [email protected]
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b: b: b: b: walemicaiah.blog.com
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