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Empirical Analysis of 2014 Budget

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Empirical Analysis of 2014 Budget …

Empirical Analysis of 2014 Budget
This analysis takes a look at the Nigerian 2014 Budgetary allocations to different Ministries, Departments and Agencies of the Nigerian Sector.

A comparative analysis of allocations to the 4 Components as outlined in the Budget is also carried out.

A review is carried out to know if this and previous budgets meets the UNDP Recommendation.

How well can we ascertain that the Government will cut down on Foreign travels.

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  • A beautiful analysis, i'm writing on the budget and this work of yours will render a great guide, keep up the good work we need independent analysis of our budget if at all any meaningful critique will be said. Pls find my email add on my profile and assist with any data you see to e relevant.
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  • IT IS GOOD TO APPRECIATE FRIENDSHIP BUT NOT TO TAKE UNDUE ADVANTAGE OF IT
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  • 1. Analysis of 2014 Budget
  • 2. This analysis takes a look at the Nigerian 2014 Budgetary allocations to different Ministries, Departments and Agencies of the Nigerian Sector. A comparative analysis of allocations to the 4 Components as outlined in the Budget is also carried out. A review is carried out to know if this and previous budgets meets the UNDP Recommendation. How well can we ascertain that the Government will cut down on Foreign travels.
  • 3. The Nigeria budget is made up of four components:  Part A – Statutory Transfers  Part B – Debts Service  Part C – Recurrent Expenditure (non-debt)  Part D – Capital Expenditure MDA Expenditure Statutory Transfer Debt Service Recurrent Expenditure Capital Expenditure Consolidated Revenue Fund of the Federation
  • 4. Total 2014 National Budget: N4,642,960,000,000 Statutory Transfer Debt Service Recurrent Expenditure Capital Expenditure 399,687,801,891 1,100,606,836,512 712,000,000,000 2,430,665,361,597
  • 5. Statutory Transfer The Federal Government is required by law to make certain mandatory expenditures annually in respect of: NJC 68,000,000,000 NDDC 61,940,000,000 UBEC 70,470,000,000 INEC 45,000,000,000 NASS 150,000,000,000 NHRC 1,350,000,000 PCC 2,927,801,891 399,687,801,891
  • 6. Debt Service Domestic Debts Whenever the Federal Government spends more money than the revenues it earns, it must find the financial resources to pay for this additional spending. 663,610,000,000 Moneys borrowed within Nigeria moneys borrowed from outside Nigeria Foreign Debts 48,390,000,000 712,000,000,000
  • 7. Recurrent Expenditure Spending by the Ministries, Departments and Agencies (MDA) of Government on Salaries, Pensions & Overheads Salaries 1,973,418,403,241 Pensions Overheads 457,246,958,356 2,430,665,361,597
  • 8. Capital Expenditure Infrastructure Capital Expenditure is used to provide infrastructure such as roads, water and power; fund educational services such as schools, colleges and universities; and provide healthcare facilities and services among others. Educational Services Healthcare 1,100,606,836,512
  • 9. Budget Component Statutory Transfer Debt Service Recurrent Expenditure Capital Expenditure UNDP Recommends Allocation 399,687,801,891 712,000,000,000 2,430,665,361,597 1,100,606,836,512 % 8.61% 15.34% 52.35% 23.70% United Nations Development Programme recommendation “Allocate 70% of Budget to Capital Expenditure and 30% to Recurrent Expenditure.”
  • 10. Budget Component Capital Expenditure 23.70% Recurrent Expenditure Debt Service Statutory Transfer 0.00% 52.35% 15.34% 8.61% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%
  • 11. Aggregate Recurrent Total Capital Total Allocation 3,542,353,163,488 1,100,606,836,512 4,642,960,000,000 76.3% 23.7% 76.3% of total allocation would be spent on Salaries, Pensions & Overheads while 23.7% goes to Infrastructure, Educational services and Healthcare facilities. Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Recurrent % 67.49% 72.21% 76.20% 59.77% 72.24% 72.99% 65.52% 71.26% 65.71% 80.46% Capital % 32.51% 27.79% 23.80% 40.23% 27.76% 27.01% 34.48% 28.74% 34.29% 19.54% Year 2010 was when Capital Expenditure got 40% allocation, so far the highest ever.
  • 12. "We are very worried that over 70% of the budget is actually going for recurrent expenditure and less than 30% on capital expenditure. No country develops under such provisions because what grows a country or builds the economy is the amount of investments you are making on infrastructure and other structural issues that you required to strengthen your economy”. Actionaid Country Director, Hussaini Abdu
  • 13. How well does each MDA perform according to the UNDP Recommendation? The following MDA (6) fulfills the UNDP recommendation S/N MDA 1 2 3 4 5 6 Power Aviation Water Resources Transport Works Lands & Housing Recurrent% Capital% 5.44 94.56 19.04 80.96 20.08 79.92 21.78 78.22 22.15 77.85 30.38 69.62 MDA with appreciable Recurrent : Capital Allocation 7 8 9 10 11 Women Affairs Police Service Commission Agriculture & Rural Development Niger-Delta (including NDDC) Office of NSA 33.95 43.58 47.26 57.80 60.17% 66.05 56.42 52.74 42.20 39.83%
  • 14. Ministry of Power Year Recurrent Capital Total Recurrent % Capital % 2014 3,397,810,244 59,051,290,389 62,449,100,633 5.44% 94.56% 2013 4,204,008,698 73,159,378,866 77,363,387,564 5.43% 94.57% 2012 3,116,536,317 70,300,000,000 73,416,536,317 4.25% 95.75% 2011 8,150,616,175 78,100,030,625 86,250,646,800 9.45% 90.55% 2010 3,580,819,527 153,207,074,322 156,787,893,849 2.28% 97.72% 2009 4,965,947,715 88,471,515,074 93,437,462,789 5.31% 94.69% 2008 25,408,533,868 114,375,000,468 139,783,534,336 18.18% 81.82% 2007 3,867,128,061 100,784,441,479 104,651,569,539 3.70% 96.30% 2006 3,382,764,019 74,710,240,083 78,093,004,102 4.33% 95.67% 2014 Budget is the minimum in about 10years. The Power ministry has consistently allocate more funds to Capital Expenditure even surpassing the UNDP recommendation, however Nigerians have not enjoyed commensurate benefit of these allocations. Therefore, it goes beyond budgeting to actually make the people enjoy the dividend of Democracy.
  • 15. Ministry of Power 100.00% 90.00% 80.00% 70.00% 60.00% Recurrent % 50.00% Capital % 40.00% 30.00% 20.00% 10.00% 0.00% 2014 2013 2012 2011 2010 2009 2008 2007 2006
  • 16. Top MDA with high Recurrent Allocation S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MDA Police Formation & Commands Federal Character Commission ICPC Interior Justice Including NHRC ICRC Youth Development FRC Education Including UBEC Petroleum Resources Defence/Mod/Army/Air Force/Navy Code of Conduct Tribunal Information Trade & Investment Labour & Productivity National Population Commission Mines & Steel Development Federal Civil Service Commission Culture & NOA Health National Salaries, Incomes & Wages Commission National Sports Commission Recurrent % 97.68% 97.26% 97.16% 95.83% 95.10% 94.74% 93.91% 90.95% 89.96% 89.95% 89.92% 89.77% 86.11% 85.32% 84.67% 84.06% 83.92% 82.98% 82.69% 82.36% 80.52% 79.84% Capital % 2.32% 2.74% 2.84% 4.17% 4.90% 5.26% 6.09% 9.05% 10.04% 10.05% 10.08% 10.23% 13.89% 14.68% 15.33% 15.94% 16.08% 17.02% 17.31% 17.64% 19.48% 20.16%
  • 17. The implication of high Recurrent Expenditure as against Capital Expenditure is that more funds are used to maintain Personnel (Salaries, Wages, Allowances, Pension, etc.) while less funds are reserved for Infrastructural development, Heath Services and Educational Services. Recurrent Expenditure Capital Expenditure Nevertheless this huge personnel allocation, our Schools lack sufficient academic strength, our Hospitals do not have enough Medical practitioners.
  • 18. Ministry with High Personnel & Overhead Allocation 100.00% 97.68 95.83 95.10 93.91 89.96 90.00% 89.95 89.92 86.11 85.32 84.67 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 13.89 10.04 10.00% 2.32 4.17 4.90 Interior Justice 10.05 14.68 15.33 10.08 6.09 0.00% Police Youth Education Petroleum Defence Information Trade & Inv. Labour & Prod.
  • 19. How does this 2014 Budget compare with past years? (Statutory transfer, Debt Services, Recurrent & Capital Expenditure)
  • 20. Overall Budget from 2004 - 2014 YEAR STATUTORY TRANSFERS DEBTS SERVICE RECURRENT CAPITAL EXPENDITURE EXPENDITURE 2014 399,687,801,891 712,000,000,000 2,430,665,361,597 1,100,606,836,512 4,642,960,000,000 2013 387,976,000,000 591,764,000,000 2,386,024,770,349 1,621,455,655,252 4,987,220,425,601 2012 397,929,101,917 559,580,000,000 2,471,814,067,335 1,319,777,651,919 4,749,100,821,171 2011 196,115,163,718 542,381,827,452 2,481,705,176,915 1,005,989,391,174 4,226,191,559,259 2010 180,279,158,994 497,071,797,452 2,077,358,560,347 1,853,906,761,420 4,608,616,278,213 2009 140,693,160,103 283,649,892,795 1,649,429,453,681 796,737,536,101 2,870,510,042,680 2008 187,600,000,000 372,200,000,000 1,259,121,253,061 673,155,465,876 2,492,076,718,937 2007 102,300,000,000 326,000,000,000 1,056,563,540,997 781,530,882,480 2,266,394,423,477 2006 86,460,000,000 289,500,000,000 961,108,775,596 539,233,587,755 1,876,302,363,351 2005 89,600,000,000 355,723,000,000 737,330,997,094 617,284,246,044 1,799,938,243,138 2004 532,324,500,000 369,369,000,000 539,286,472,751 349,868,371,837 1,790,848,344,588 TOTAL
  • 21. Statutory Transfer from 1999 to 2014 NJC YEAR 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 NDDC UBEC INEC STATUTORY TRANSFERS 399,687,801,891 387,976,000,000 397,929,101,917 196,115,163,718 180,279,158,994 140,693,160,103 187,600,000,000 102,300,000,000 86,460,000,000 89,600,000,000 532,324,500,000 NASS NHRC PCC TOTAL 4,642,960,000,000 4,987,220,425,601 4,749,100,821,171 4,226,191,559,259 4,608,616,278,213 2,870,510,042,680 2,492,076,718,937 2,266,394,423,477 1,876,302,363,351 1,799,938,243,138 1,790,848,344,588 % 8.61 7.78 8.38 4.64 3.91 4.90 7.53 4.51 4.61 4.98 29.72 2010 seems to be a golden year; 2014 Statutory transfer shows a growing trend from 2010.
  • 22. Debt Services from 1999 to 2014 Domestic Debts Foreign Debts YEAR DOMESTIC FOREIGN DEBTS SERVICE TOTAL 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 663,610,000,000 543,376,000,000 511,980,000,000 503,465,330,805 463,155,300,805 227,809,018,411 306,200,000,000 48,390,000,000 48,388,000,000 47,600,000,000 38,916,496,647 33,916,496,647 55,840,874,384 66,000,000,000 265,000,000,000 220,000,000,000 185,749,000,000 185,769,000,000 61,000,000,000 69,500,000,000 169,974,000,000 183,600,000,000 712,000,000,000 591,764,000,000 559,580,000,000 542,381,827,452 497,071,797,452 283,649,892,795 372,200,000,000 326,000,000,000 289,500,000,000 355,723,000,000 369,369,000,000 4,642,960,000,000 4,987,220,425,601 4,749,100,821,171 4,226,191,559,259 4,608,616,278,213 2,870,510,042,680 2,492,076,718,937 2,266,394,423,477 1,876,302,363,351 1,799,938,243,138 1,790,848,344,588 From 2009; there has been a growing increase in the Debt Services allocation, current allocation stands at 15.34%. % 15.34 11.87 11.78 12.83 10.79 9.88 14.94 14.38 15.43 19.76 20.63
  • 23. Recurrent & Capital Expenditure from 2004 - 2014 Year 2014 Total Recurrent Total Capital Total Budget % Growth 3,542,353,163,488 1,100,606,836,512 4,642,960,000,000 -6.90 2013 3,365,764,770,349 1,621,455,655,252 4,987,220,425,601 5.01 2012 3,429,323,169,252 1,319,777,651,919 4,749,100,821,171 12.37 2011 3,220,202,168,085 1,005,989,391,174 4,226,191,559,259 -8.30 2010 2,754,709,516,793 1,853,906,761,420 4,608,616,278,213 60.55 2009 2,073,772,506,579 796,737,536,101 2,870,510,042,680 15.19 2008 1,818,921,253,061 673,155,465,876 2,492,076,718,937 9.96 2007 1,484,863,540,997 781,530,882,480 2,266,394,423,477 20.79 2006 1,337,068,775,596 539,233,587,755 1,876,302,363,351 4.24 2005 1,182,653,997,094 617,284,246,044 1,799,938,243,138 0.51 2004 1,440,979,972,751 349,868,371,837 1,790,848,344,588 The 2014 Capital Expenditure of 1.1tn is compared to that of Year 2010, if inflation is put into consideration (Deflator of 3.71), the actual/Real Capital Expenditure budget for 2014 is 296,659,524,666.
  • 24. Summary of 2014 Budget Components Recurrent Expenditure (MDA Salaries, Pensions & Overhead costs) Capital Expenditure (Infrastructure, Debts Service Educational Services & Health) (Foreign and Domestic Debt) Statutory Transfer 52.35% 23.70% 15.34% 8.61%
  • 25. Foreign travel by government personnel will be further curtailed. This directive shall apply to all Ministries, Departments and Agencies of the Federal Government. (President Goodluck Jonathan) Jan 1, 2014 Presidential Press Release
  • 26. Government Allocation to Foreign Travels (2012 – 2014) MDA 2012 2013 2014 Grand Total 15,310,545,925 19,621,732,323 14,777,749,467 Total of 14.78Billion has been allocated to INTERNATIONAL TRAVEL & TRANSPORT: TRAINING & INTERNATIONAL TRAVEL & TRANSPORT: OTHERS Top 10 Ministries with High Allocation Ministry of Foreign Affairs Ministry of Defence Presidency Office of National Security Adviser Ministry of Education Ministry of Finance Ministry of Trade & Investment Ministry of Science & Technology Office of SGF Ministry of Justice Total 5,196,552,734 1,748,368,642 1,545,992,529 1,012,834,421 585,139,210 496,531,468 307,370,808 279,409,490 277,831,400 251,114,363
  • 27. Data source: - Nigeria Budget office (www.budgetoffice.gov.ng) Analysis by: Wale Micaiah (M.Sc., CISM, CCNP-Sec, MCSA) e: walegate@yahoo.com m: 08078001800 b: walemicaiah.blog.com w. www.statisense.com Freely share, freely use and freely acknowledge the source – © Wale Micaiah

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