Understand govt priority from national budget

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Understand govt priority from national budget

  1. 1. Understand Govt. Priority from National Budget
  2. 2. Understand Govt. Priority from National Budget
  3. 3. There is an adage that says that “the Priority of a person can be deduced from what he spends Money on”. This is applicable to Family, Community, Orgainsations and Nations. The Nigerian government has gone through some transition – from Military governance to Democratic Rule – precisely in 1999 a new democratic government came to power, from 1999 to 2013, we have had 3 Elected Presidents, each with their peculiar programme. As a result, Programmes/Projects are sometimes abandoned mid-way because their is no binding goal or vision that an elected President would run with irrespective of his personal agenda.
  4. 4. The purpose of this budget analysis is four-fold: 1 3 To ascertain whether budgets are allocated in line with policy priorities, as determined by the government To understand from National Budgets the priority of government from 1999 till date To determine the budget growth rate and changes in budget priorities To calculate the annual growth rate of Nigeria Budget over a period 2 4
  5. 5. There are 31 Ministries with several Agencies that helps the Government prosecute programmes as may be considered priority by the government in Power. Agriculture Aviation Communications Technology Defence Education Environment Federal Capital Development Agency Finance & Economic Development Foreign Affairs Health Trade and Investment Culture Tourism & National Orientation Information Interior Justice Labour & Productivity Petroleum Resources Niger Delta Mines & Steel Development Power Science & Technology Special Duties Transport Water Resources Women Affairs & Social Development Works Lands, Housing & Urban Development Sports Youth Development Police Affairs National Planning Commission
  6. 6. President & Programme Priority Olusegun Obasanjo (1999 – 2007) Top Agenda a) Foreign Policy b) Finance c) Health d) Information & Communication e) Security
  7. 7. President & Programme Priority Top Agenda a) Critical Infrastructure b)Niger Delta c) Food Security d)Human Capital Development e) Land Tenure and Home Ownership f) National Security and Intelligence g)Wealth Creation Umaru Yar'adua (2007 – 2010)
  8. 8. Elected President & Programme Priority Top Agenda a) Job Creation b) Education c) Health d) Power e) Transportation f) Niger Delta g) Labour & Productivity Dr. Goodluck Jonathan h) Foreign Policy & Economic Diplomacy (2010 – till date) i) Legislature j) Governance NPC Finance k) Judiciary & Justice Delivery Transportation l) Public Expenditure Management Agriculture m)Information & Communication Niger Delta Technology (ICT) Works Aviation FCT
  9. 9. Summary of Agenda/Ministry Priority President Olusegun Obasanjo Umaru Yar’adua Goodluck Jonathan Ministry Foreign Affairs, Finance, Health, Information & Communication, Defence, Power Power, Works, Niger Delta, Agriculture, Education, Lands, Housing & Urban Development, Defence, Labour & Productivity Education, Health, Power, Transportation, Niger Delta, Labour & Productivity, Foreign Affairs, Justice, Finance, Communication Technology
  10. 10. Defence OBJ YAR ICT, Health, Finance, Foreign Affairs Power Labour & Productivity Niger Delta Education Transportation, Justice GEJ
  11. 11. Normalizing Budgetary Allocation
  12. 12. Definition of Terms: In order to understand this section, it is important to define some terms that will be used in normalizing the budgetary allocations. Nominal terms When government budgets, they allocate budget in actual monetary value in terms of its purchasing power at current prices. This is refer to as Nominal value. This value do not take into account the effect of inflation on the real value of money. This is when budgetary values are measured in terms of their purchasing power at a particular time. For instance, GDP may be measured in constant 2006 prices by taking into consideration the effect of inflation. Deflator Real terms A statistical tool used to convert current currency into inflationadjusted currency, in order to compare prices over time after factoring out the overall effects of inflation.
  13. 13. Deflators from 1999 - 2013 Year 1999 Deflator 0.74 Year Deflator Year Deflator 2000 1.00 2005 1.85 2010 2.68 2001 0.96 2006 2.22 2002 1.15 2007 2.31 2011 3.08 2003 1.28 2008 2.56 2012 3.44 2004 1.55 2009 2.45 2013 3.61 The Deflator for the base year is always 1.00. Year 2000 is going to be the base year
  14. 14. Formula for Calculating Real Value from Nominal Value Nominal Value Deflator Real Value Year 1999 2000 2001 … 2013 Nominal Real Deflator The formula above will be used to calculate and fill up the table
  15. 15. Nominal Value: Budget Presentation (1999 – 2013) Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total* 60,549,835,647 470,009,971,781 894,214,805,186 1,064,801,253,520 976,254,543,375 1,790,848,344,588 1,799,938,243,138 1,876,302,363,351 2,266,394,423,477 2,492,076,718,937 2,870,510,042,679 4,608,616,278,213 4,226,191,559,259 4,749,100,821,170 4,987,220,425,601 Recurrent Capital 230,000,000,000 397,856,858,542 578,096,146,413 593,903,247,703 539,286,472,751 737,330,997,094 961,108,775,596 1,056,563,540,997 1,259,121,253,061 1,649,429,453,681 2,077,358,560,347 2,481,705,176,915 2,471,814,067,335 2,386,024,770,349 170,009,971,781 496,357,946,644 486,705,107,107 382,351,295,672 349,868,371,837 617,284,246,044 539,233,587,755 781,530,882,480 673,155,465,876 796,737,536,101 1,853,906,761,420 1,005,989,391,174 1,319,777,651,919 1,621,455,655,252 Total Budget = Recurrent + Capital + Debt + Statutory
  16. 16. Nominal Value: Budget Presentation (1999 – 2013) Year Total 1999 to 11,199,313,784,063 OBJ 2007 2008 to 9,971,203,039,829 YAR 2010 2011 to 13,962,512,806,030 GEJ 2013 AVG (OBJ) 1,244,368,198,229 Recurrent Capital 5,094,146,039,096 3,823,341,409,320 4,985,909,267,089 3,323,799,763,397 7,339,544,014,599 3,947,222,698,345 636,768,254,887 477,917,676,165 AVG (YAR) 3,323,734,346,610 1,661,969,755,696 1,107,933,254,466 AVG (GEJ) 4,654,170,935,343 2,446,514,671,533 1,315,740,899,448 TOTAL 35,133,029,629,922 17,419,599,320,784 11,094,363,871,062 In 9 Budget Years (1999 – 2007); Total budget under OBJ was approximately 11.2tr. On the average, 1.2tr was spent per year.
  17. 17. Real Value calculation Nominal Value Deflator Real Value 2005: 1,799,938,243,138 1.85 Year Deflator 2005 2006 1.85 2.22 Total Nominal Real Nominal Real = 972,939,590,885 Recurrent 1,799,938,243,138 737,330,997,094 972,939,590,885 Capital 617,284,246,044 398,557,295,726 333,667,160,024 1,876,302,363,351 961,108,775,596 539,233,587,755 845,181,244,753 432,931,880,899 242,898,012,502
  18. 18. Real Value: Budget Presentation (1999 – 2013) Year Deflator 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0.74 1 0.96 1.15 1.28 1.55 1.85 2.22 2.31 2.56 2.45 2.68 3.08 3.44 3.61 Total Recurrent Capital 81,824,102,226 470,009,971,781 931,473,755,402 925,914,133,496 762,698,862,012 1,155,386,028,766 972,939,590,885 845,181,244,753 981,123,127,046 973,467,468,335 1,171,636,752,114 1,719,632,939,632 1,372,140,116,643 1,380,552,564,294 1,381,501,502,937 230,000,000,000 414,434,227,648 502,692,301,229 463,986,912,268 347,926,756,614 398,557,295,726 432,931,880,899 457,386,814,284 491,844,239,477 673,236,511,707 775,133,791,174 805,748,434,063 718,550,600,969 660,948,689,847 170,009,971,781 517,039,527,754 423,221,832,267 298,711,949,744 225,721,530,217 333,667,160,024 242,898,012,502 338,325,057,351 262,951,353,858 325,198,994,327 691,756,254,261 326,619,932,199 383,656,294,163 449,156,691,206
  19. 19. Real Value: Budget Presentation (1999 – 2013) Year Deflator 1999 OBJ to 2007 2008 YAR to 2010 2011 GEJ to 2013 Total Recurrent Capital 7,126,550,816,367 3,864,737,160,080 1,940,214,542,358 1,279,906,602,446 4,134,194,183,873 AVG (OBJ) 1.45 (1.54)* 3,247,916,188,668 2,549,595,041,640 2,185,247,724,880 1,159,432,917,567 546,095,847,997 263,629,560,769 206,947,649,484 AVG (YAR) 2.56 503,220,984,385 252,632,101,869 166,654,505,527 AVG (GEJ) 3.38 407,711,457,976 215,507,665,176 114,342,496,802 TOTAL 15,125,482,160,320 7,373,378,455,906 4,988,934,561,653 In 9 Budget Years (1999 – 2007); Total Real budget (taking inflation into consideration) under OBJ was approximately 7.13tr. On the average, 546Billion was spent per year. * 1.45 is average of Deflators for 9yrs, while 1.54 is for 8yrs. 1.54 is used for both Recurrent and Capital since no allocation were made in 1999.
  20. 20. OBJ: Budget Allocations (1999 – 2007) Nominal & Real: Nominal Total 1999 to 2007 AVG TOTAL Recurrent Capital 11,199,313,784,063 5,094,146,039,096 3,823,341,409,320 1,244,368,198,229 636,768,254,887 477,917,676,165 35,133,029,629,922 17,419,599,320,784 11,094,363,871,062 % 31.88 29.24 34.46 While Nominal value shows that OBJ spent 31.88% of Total Budget between 1999 – 2013, the Real value shows that it was 47.12% Real 1999 to 2007 AVG TOTAL % Def. 1.45 (1.54)* Total Recurrent Capital 7,126,550,816,367 3,247,916,188,668 2,549,595,041,640 546,095,847,997 263,629,560,769 206,947,649,484 15,125,482,160,320 7,373,378,455,906 47.12 44.05 4,988,934,561,653 51.11
  21. 21. OBJ: Priority (1999 – 2007) President OBJ Priority Ministry Based on Declaration/Focus Foreign Affairs, Finance, Health, Information & Communication, Defence, Power Objective 1: To ascertain whether budgets are allocated in line with policy priorities, as determined by the government Objective 2: To understand from National Budgets the priority of government from 1999 till date
  22. 22. Objective 1: To ascertain whether budgets are allocated in line with policy priorities, as determined by the government. To Do: Confirm if the budget of the following Ministries ranks higher than other ministries - Foreign Affairs, Finance, Health, Information & Communication, Defence, Power MINISTRY Total Budget Defence Power Health Foreign Affairs Information Finance MINISTRY Total Budget Defence Power Health Foreign Affairs Information Finance 2007 2006 2005 2,266,394,423,477 1,876,302,363,351 1,799,938,243,138 117,314,507,407 98,359,999,999 111,868,968,876 104,651,569,540 75,850,000,000 93,294,415,519 122,399,999,999 105,590,000,000 71,685,426,092 41,351,772,928 29,500,000,000 33,124,758,316 19,353,762,428 14,415,986,568 29,430,435,710 10,232,352,402 12,025,000,000 17,235,132,969 2003 2002 2001 976,254,543,375 1,064,801,253,520 894,214,805,186 58,613,225,424 64,908,031,039 61,565,511,944 36,676,857,552 69,960,796,880 73,925,163,473 52,149,106,213 44,652,636,040 42,629,588,516 17,028,004,353 16,353,262,879 15,392,552,465 7,912,798,350 15,529,233,560 11,212,554,765 16,883,279,026 11,825,221,600 10,695,271,875 2004 1,790,848,344,588 76,057,340,928 58,935,614,817 59,787,376,511 17,422,571,561 12,992,626,447 17,466,407,044 2000 470,009,971,781 35,062,097,640 16,886,900,460 17,114,684,155 11,729,143,960 2,717,202,268 9,740,279,000 1999 60,549,835,647 5,500,000,000 2,319,250,000 1,000,000,000 900,000,000
  23. 23. MINISTRY Defence Power Health Foreign Affairs Information Finance Total Allocation % 623,749,683,257 535,681,318,241 518,328,067,526 182,902,066,462 114,464,600,096 106,102,943,916 5.57 4.78 4.63 1.63 1.02 0.95 Objective 2: To understand from National Budgets the priority of government from 1999 till date MINISTRY Education Works Defence Power Health Police Formation and Commands Water Resources FCT Presidency Interior Allocation 821,356,629,283 649,370,619,933 623,749,683,257 535,681,318,241 518,328,067,526 462,410,270,667 434,265,470,799 325,631,971,297 312,143,493,655 234,392,995,522 % 7.33 5.80 5.57 4.78 4.63 4.13 3.88 2.91 2.79 2.09
  24. 24. Findings  From the foregoing, it can be inferred that while priorities were set on these Ministries, Defence, Finance, Foreign Affairs, Health, Information & Communication, and Power, budgetary allocation did not entirely reflect that they were priorities.  It is commendable that three (Defence, Power & Health) of these priority Ministries were given higher credence.  From the Budgetary Allocation, Education and Works’ Ministries were given the highest allocation respectively.  The Education ministry was allocated the highest budget in 2000 (8.71%), 2003 (7.75%), 2004 (5.24%), 2005 (6.67%) and 2007 (8.81%).  The Ministry with the highest singular allocation was Ministry of Works, it was allocated 15.83% of total budget.
  25. 25. YAR: Budget Allocations (2008 – 2010) Nominal Total TOTAL Capital 9,971,203,039,829 4,985,909,267,089 3,323,799,763,397 3,323,734,346,610 2008 to 2010 AVG Recurrent 1,661,969,755,696 1,107,933,254,466 35,133,029,629,922 17,419,599,320,784 11,094,363,871,062 % 28.38 28.62 29.96 While Nominal value shows that YAR spent 28.38% of Total Budget between 2008 – 2010, the Real value shows that it was 25.55% Real Def. 2008 to 2010 3,864,737,160,080 2.56 AVG TOTAL % Total 503,220,984,385 15,125,482,160,320 25.55 Recurrent Capital 1,940,214,542,358 1,279,906,602,446 252,632,101,869 166,654,505,527 7,373,378,455,906 4,988,934,561,653 26.31 25.65
  26. 26. YAR: Priority (2008 – 2010) President YAR Priority Ministry Based on Declaration/Focus Power, Works, Niger Delta, Agriculture, Education, Lands, Housing & Urban Development, Defence, Labour & Productivity Objective 1: To ascertain whether budgets are allocated in line with policy priorities, as determined by the government Objective 2: To understand from National Budgets the priority of government from 1999 till date
  27. 27. Objective 1: To ascertain whether budgets are allocated in line with policy priorities, as determined by the government. To Do: Confirm if the budget of the following Ministries ranks higher than other ministries - Power, Works, Niger Delta, Agriculture, Education, Lands, Housing & Urban Development, Defence, Labour & Productivity. Year Total Budget 2010 2009 2008 Aggregate 4,608,616,278,213 2,870,510,042,679 2,492,076,718,937 9,971,203,039,829 % Education 295,293,389,496 216,639,437,111 210,444,818,579 722,377,645,186 7.24 Defence 291,719,069,185 201,406,861,244 151,940,617,034 645,066,547,463 6.47 Agriculture & Rural Development 184,396,769,831 119,763,275,542 152,111,452,763 456,271,498,135 4.58 Power 194,523,673,105 93,437,462,789 139,783,534,336 427,744,670,230 4.29 Works 250,046,528,157 173,330,753,464 0 423,377,281,621 4.25 Niger Delta 93,889,415,401 50,000,000,000 0 143,889,415,401 1.44 Labour & Productivity 15,033,288,654 6,237,011,718 6,142,634,383 27,412,934,756 0.27
  28. 28. Objective 2: To understand from National Budgets the priority of government from 2008 - 2010 Year Total Budget Education Defence Health 2010 2009 2008 Aggregate 4,608,616,278,213 2,870,510,042,679 2,492,076,718,937 9,971,203,039,829 295,293,389,496 216,639,437,111 210,444,818,579 722,377,645,186 291,719,069,185 201,406,861,244 151,940,617,034 645,066,547,463 179,999,734,315 143,107,216,257 138,179,657,132 461,286,607,704 % 7.24 6.47 4.63 Agriculture & Rural Dev. 184,396,769,831 119,763,275,542 152,111,452,763 456,271,498,135 4.58 Interior 95,953,764,285 82,230,690,736 266,371,519,798 444,555,974,819 4.46 Police Formation & Commands 245,095,275,181 195,358,792,301 0 440,454,067,482 4.42 Power Works Transport FCT 194,523,673,105 250,046,528,157 134,414,036,176 138,360,000,000 93,437,462,789 173,330,753,464 39,392,035,203 64,450,000,000 139,783,534,336 0 124,444,316,123 37,958,110,000 427,744,670,230 423,377,281,621 298,250,387,502 240,768,110,000 4.29 4.25 2.99 2.41
  29. 29. Findings  There is high correlation between government programme priority and budgeting.  Ministries of Education, Defence, Agriculture, Power and Works received higher budgetary allocation in line with government programme priority.  The Ministry of Education, Defence and Health were the top three ministries with 7.24%, 6.47% and 4.63% of the Budget. Education Defence Agriculture Power Works Niger Delta Labour & Prod. Budget Priority Health Interior Police Command Transport FCT Programme Priority
  30. 30. GEJ: Budget Allocations (2011 – 2013) Nominal 2011 to 2013 AVG (GEJ) TOTAL Total Recurrent Capital 13,962,512,806,030 7,339,544,014,599 3,947,222,698,345 4,654,170,935,343 2,446,514,671,533 1,315,740,899,448 35,133,029,629,922 17,419,599,320,784 11,094,363,871,062 % 39.74 42.13 35.58 While Nominal value shows that GEJ spent 39.74% of Total Budget between 2011 – 2013, the Real value shows that it was 27.33% Real Def. 2011 to 2013 AVG (GEJ) TOTAL % Total 4,134,194,183,873 3.38 407,711,457,976 15,125,482,160,320 27.33 Recurrent Capital 2,185,247,724,880 1,159,432,917,567 215,507,665,176 114,342,496,802 7,373,378,455,906 4,988,934,561,653 29.64 23.24
  31. 31. GEJ: Priority (2011 – 2013) President Priority Ministry Based on Declaration/Focus Education, Health, Power, Transportation, Niger GEJ Delta, Labour & Productivity, Foreign Affairs, Justice, Finance, Communication Technology Objective 1: To ascertain whether budgets are allocated in line with policy priorities, as determined by the government Objective 2: To understand from National Budgets the priority of government from 1999 till date
  32. 32. Objective 1: To ascertain whether budgets are allocated in line with policy priorities, as determined by the government. To Do: Confirm if the budget of the following Ministries ranks higher than other ministries - Education, Health, Power, Transportation, Niger Delta, Labour & Productivity, Foreign Affairs, Justice, Finance, Communication Technology. Year Total Budget 2013 2012 2011 Aggregate 4,987,220,425,601 4,749,100,821,170 4,226,191,559,259 13,962,512,806,030 % Education 432,760,713,761 400,148,037,983 339,481,528,685 1,172,390,280,429 8.40 Health 279,819,553,930 282,771,771,425 235,866,483,244 798,457,808,599 5.72 Power 77,363,387,564 73,416,536,317 90,026,917,709 240,806,841,590 1.72 Niger Delta 64,706,473,318 59,723,482,821 56,629,811,018 181,059,767,157 1.30 Foreign Affairs 71,602,678,070 50,186,470,959 45,239,702,831 167,028,851,860 1.20 Transport 52,738,692,336 54,825,494,233 55,954,636,803 163,518,823,372 1.17 Justice 22,164,762,081 22,330,185,048 19,822,776,913 64,317,724,042 0.46 Finance 14,896,868,382 13,397,725,756 15,150,616,144 43,445,210,282 0.31 Communications Tech. 15,742,880,079 18,305,107,489 0 34,047,987,568 0.24 12,718,574,857 10,851,966,886 8,616,487,013 32,187,028,756 0.23 Labour & Productivity
  33. 33. Objective 2: To understand from National Budgets the priority of government from 2011 – 2013. Year 2013 2012 2011 Aggregate 4,987,220,425,601 4,749,100,821,170 4,226,191,559,259 13,962,512,806,030 % Total Budget 432,760,713,761 400,148,037,983 339,481,528,685 1,172,390,280,429 8.40% Education 364,415,146,886 326,354,184,382 313,869,733,252 1,004,639,064,520 7.20% Defence Police Formation 311,151,366,222 307,857,718,425 304,737,303,692 923,746,388,339 6.62% & Commands 279,819,553,930 282,771,771,425 235,866,483,244 798,457,808,599 5.72% Health 194,781,682,742 180,799,815,246 163,564,863,303 539,146,361,291 3.86% Works 154,731,693,977 157,332,986,945 158,157,297,012 470,221,977,934 3.37% Interior National Security 115,512,690,505 124,263,761,913 105,240,648,267 345,017,100,685 2.47% Adviser 77,363,387,564 73,416,536,317 90,026,917,709 240,806,841,590 1.72% Power Agriculture & 83,204,844,639 78,984,828,949 63,526,625,985 225,716,299,573 1.62% Rural Dev. 79,579,478,867 70,591,647,019 63,563,978,749 213,735,104,635 1.53% SGF 86,944,795,951 76,075,840,142 47,272,599,579 210,293,235,672 1.51% Youth Dev.
  34. 34. Findings  There is low correlation between government programme priority and budgeting.  We found this correlation in three ministries; Education, Health and Power  Ministries of Education, Defence, Police Formation and Commands, Health and Works have budget allocation priority Education Health Power Niger Delta Labour & Prod. Budget Priority Defence Police Command Works Interior NSA Agriculture SGF Youth Dev. Programme Priority
  35. 35. 1999 2000 2001 2013 To determine the budget growth rate and changes in budget priorities
  36. 36. While budget growth rate can be inferred from Nominal value, however the Real value gives one the exact growth rate in a normalized system where inflation is taken into consideration. Year Total Budget (Nominal) Deflator Total Budget (Real) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 60,549,835,647 470,009,971,781 894,214,805,186 1,064,801,253,520 976,254,543,375 1,790,848,344,588 1,799,938,243,138 1,876,302,363,351 2,266,394,423,477 2,492,076,718,937 2,870,510,042,679 4,608,616,278,213 4,226,191,559,259 4,749,100,821,170 4,987,220,425,601 0.74 1.00 0.96 1.15 1.28 1.55 1.85 2.22 2.31 2.56 2.45 2.68 3.08 3.44 3.61 81,824,102,226 470,009,971,781 931,473,755,402 925,914,133,496 762,698,862,012 1,155,386,028,767 972,939,590,885 845,181,244,753 981,123,127,046 973,467,468,335 1,171,636,752,114 1,719,632,939,632 1,372,140,116,643 1,380,552,564,294 1,381,501,502,937 With the assumption that Year 2000 is our base year, therefore the deflator is assumed to be at 1.00.
  37. 37. The Real value for 2001 budget is N931 billion, compared to N894 billion prior to the consideration of inflation. Even though there was an increase of N424 billion in nominal terms, the actual increase for the 2001 financial year is N461 billion. Year Total Budget (Nominal) Change (Nominal) 60,549,835,647 1999 470,009,971,781 2000 409,460,136,134 894,214,805,186 2001 424,204,833,405 1,064,801,253,520 2002 170,586,448,334 976,254,543,375 2003 -88,546,710,145 1,790,848,344,588 2004 814,593,801,213 1,799,938,243,138 2005 9,089,898,550 1,876,302,363,351 2006 76,364,120,213 2,266,394,423,477 2007 390,092,060,126 2,492,076,718,937 2008 225,682,295,460 2,870,510,042,679 2009 378,433,323,742 4,608,616,278,213 2010 1,738,106,235,534 4,226,191,559,259 2011 -382,424,718,954 4,749,100,821,170 2012 522,909,261,911 4,987,220,425,601 2013 238,119,604,431 Total Budget (Real) 81,824,102,226 470,009,971,781 931,473,755,402 925,914,133,496 762,698,862,012 1,155,386,028,767 972,939,590,885 845,181,244,753 981,123,127,046 973,467,468,335 1,171,636,752,114 1,719,632,939,632 1,372,140,116,643 1,380,552,564,294 1,381,501,502,937 Change (Real) 388,185,869,555 461,463,783,621 -5,559,621,906 -163,215,271,484 392,687,166,755 -182,446,437,882 -127,758,346,132 135,941,882,293 -7,655,658,711 198,169,283,779 547,996,187,518 -347,492,822,989 8,412,447,651 948,938,643
  38. 38. Calculating change in budget priority It is important to determine the budget growth and changes in budget priorities as compared to the previous years. This is to understand whether the allocated budget is increasing or decreasing in line with policy priorities. The growth rate describes how much the size of an allocation changes from one year to the next. It is expressed as a percentage of the original allocation and is called the annual growth rate or year to year change. The following formula is used to calculate Growth Rate: Real Growth rate % = (Year 2 – Year 1) Year 1 x 100
  39. 39. Year Nominal 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 60,549,835,647 470,009,971,781 894,214,805,186 1,064,801,253,520 976,254,543,375 1,790,848,344,588 1,799,938,243,138 1,876,302,363,351 2,266,394,423,477 2,492,076,718,937 2,870,510,042,679 4,608,616,278,213 4,226,191,559,259 4,749,100,821,170 4,987,220,425,601 % Real % 676.24 90.25 19.08 -8.32 83.44 0.51 4.24 20.79 9.96 15.19 60.55 -8.30 12.3 5.01 81,824,102,226 470,009,971,781 931,473,755,402 925,914,133,496 762,698,862,012 1,155,386,028,767 972,939,590,885 845,181,244,753 981,123,127,046 973,467,468,335 1,171,636,752,114 1,719,632,939,632 1,372,140,116,643 1,380,552,564,294 1,381,501,502,937 474.42 98.18 -0.60 -17.63 51.49 -15.79 -13.13 16.08 -0.78 20.36 46.77 -20.21 0.61 0.07 The figure above indicates that, although the budget seems to have increased in nominal terms, when considered in real terms, it transpires that the budget has actually increased by lesser percentages. For instance, in 2010, an increase of 60.55% in Nominal term shows a 46.77% in Real term.
  40. 40. 1999 2000 2001 2013 To calculate the Annual Growth Rate of Nigeria Budget over a period
  41. 41. Year Real % 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 81,824,102,226 470,009,971,781 931,473,755,402 925,914,133,496 762,698,862,012 1,155,386,028,767 972,939,590,885 845,181,244,753 981,123,127,046 973,467,468,335 1,171,636,752,114 1,719,632,939,632 1,372,140,116,643 1,380,552,564,294 1,381,501,502,937 474.42 98.18 -0.60 -17.63 51.49 -15.79 -13.13 16.08 -0.78 20.36 46.77 -20.21 0.61 0.07 Annual average real growth rate over the medium term: 1999 to 2013 = 14years 639.84 45.70 = 14 639.84 The average medium term growth rate from 1999 to 2013 has been approximately 46%.
  42. 42. Data source: - A Budget Guide for Civil Society Organisations Working in Education - Budget analysis manual (www.parliament.gov.za) - 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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