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THE 2006 FEDERAL BUDGET: 

THE 2006 FEDERAL BUDGET Executive Summary Prepared for Ministries, Departments and Agencies 21 October 2005

OUTLINE: 

OUTLINE What is the 2006 Budget all about? Key assumptions and targets Federation account Federal budget share Aggregate expenditure Breakdown of expenditure Statutory transfers Debt service MDA spending Summary Focus of sector spending

WHAT IS THE 2006 BUDGET ALL ABOUT?: 

WHAT IS THE 2006 BUDGET ALL ABOUT? The 2006 Budget is about:- Clearing pension arrears and paying as and when due from 2006 under the Pay As You Go System Clearing arrears owed to local contractors Channelling savings from debt relief into pro-poor programs to assist in achieving the MDG Improving the quality of infrastructure – particularly Roads, Water and Power Improving basic services – particularly Education and Healthcare Enhancing agricultural production in order to provide raw materials for local industries and for exportation

WHAT IS THE 2006 BUDGET ALL ABOUT?: 

WHAT IS THE 2006 BUDGET ALL ABOUT? The 2006 Budget is about:- Completing key projects that are near completion Ensuring no increase in petroleum prices in 2006 Reforming the Public Service Ensuring that the 2007 Elections are hitch free Improving the business environment for the private sector to grow the economy – particularly security of life & property, tax reforms, power sector reforms and dispute resolution Carefully balancing the need for economic development and macro-economic stability

KEY ASSUMPTIONS & TARGETS: 

KEY ASSUMPTIONS & TARGETS

FEDERATION ACCOUNT: 

FEDERATION ACCOUNT The principal revenues that accrue to the Federation Account (FAAC) are: Oil revenue Crude Oil Sales Petroleum Profits Tax (PPT) Royalties and other Non-oil taxes Companies’ Income Tax (CIT) Value Added Tax (VAT) Customs & Excise Duties

FEDERATION ACCOUNT: 

FEDERATION ACCOUNT These revenues (except VAT) are distributed in accordance with the following manner after 13% of oil revenues have been distributed to the oil producing states Federal Government – 52.68% State Governments – 26.72% Local Governments – 20.60% Out of the 52.68% that accrues to the FGN, the federal budget gets 48.5%. VAT goes into a VAT pool and is distributed 15%, 55% and 30% to the Federal, State and Local Governments respectively

FEDERATION ACCOUNT: 

FEDERATION ACCOUNT

FEDERATION ACCOUNT: 

FEDERATION ACCOUNT

FEDERATION ACCOUNT: 

FEDERATION ACCOUNT

FEDERATION ACCOUNT: 

FEDERATION ACCOUNT

FEDERAL BUDGET SHARE: 

FEDERAL BUDGET SHARE

AGGREGATE EXPENDITURE: 

AGGREGATE EXPENDITURE

BREAKDOWN OF AGGREGATE EXPENDITURE: 

BREAKDOWN OF AGGREGATE EXPENDITURE

BREAKDOWN OF AGGREGATE EXPENDITURE: 

BREAKDOWN OF AGGREGATE EXPENDITURE

STATUTORY TRANSFERS: 

STATUTORY TRANSFERS

DEBT SERVICE: 

DEBT SERVICE

DEBT SERVICE: 

DEBT SERVICE

MDA SPENDING: 

MDA SPENDING

SUMMARY: 

SUMMARY

MDA EXPENDITURE - EDUCATION: 

MDA EXPENDITURE - EDUCATION Education Pay teachers Train teachers Build and equip schools Buy textbooks Improve curriculum Feed school children Develop and enlarge distance learning Reinforce science and technology education

MDA EXPENDITURE - HEALTH: 

MDA EXPENDITURE - HEALTH Health Pay health sector workers without building arrears Complete VAMED Project started and commence the balance Immunize the population (National immunization Program) Build and equip Primary Health Centres Reduce death caused by malaria fever and tuberculosis Reduce the incidence of HIV & Aids Treat those infected by HIV & Aids Rehabilitate Federal Medical Centres

MDA EXPENDITURE - POWER: 

MDA EXPENDITURE - POWER GENERATION Build the following power stations Papalanto Geregu Omotosho Alaoji Dadin Kowa Rehabilitate Egbin Power Station Pursue power generation initiatives in the Niger-Delta using funds from the Excess Crude Account TRANSMISSION Build the following transmission lines Owerri – Ahoada – Yenagoa DC line 2nd Benin – Onitsha S/C line Calabar sub-station Gombe – Yola – Jalingo Kano – Dutse Benin – North S/S line

MDA EXPENDITURE - POWER: 

MDA EXPENDITURE - POWER RURAL ELECTRIFICATION AGENCY Channel Rural Electrification Scheme through this Agency OPENING UP THE SECTOR FOR PRIVATE PARTICIPATION Create Six generating companies One transmission company Eleven distribution companies

MDA EXPENDITURE - ROADS: 

MDA EXPENDITURE - ROADS BUILD/MAJOR REHAB Onitsha – Owerri Abeokuta – Otta-Owode Okigwe - Afikpo Ibadan – Ilorin Dualization Warri – Benin Warri (Effunrun) - PH Bauchi – Kari - Yobe Yola – Mubi – Michia Benin – Asaba (Section iii) Maiduguri - Kano REPAIR & MAINTAIN Enugu – Umuahia Nkpor – Nnobi – Awka-Etiti Lokoja – Auchi – Benin Ofusu – Oluku Junction Shagamu – Ore Akure – Ife – Ibadan Takum - Wukari Akungba – Ikare_Ekiti Bauchi – Ningi – Kwanar Potiskum – Kakuri - Gamayin

MDA EXPENDITURE - ROADS: 

MDA EXPENDITURE - ROADS BUILD/MAJOR REHAB Maraba – Bali Kaduna Eastern Bye-Pass Lamba – Kunchi-Kazaure Link Ikom – Wula – Obudu Mile 3 Diobu – PH Airport Ikom – Wula – Obudu Bodo – Bonny Itigidi Bridge Bridge over Niger River at Shintaku and Onitsha Ibi Bridge Nasarawa – Benue Bridge REPAIR & MAINTAIN Kanu – Bishi - Katsina Nguru – Hadeija – Azare Mainchi – Daki Takwas Bokani – Tegina – birni Gwari Jebba – Ilorin Pizhi – Kontagora Jebba – Mokwa Okenne – Kabba – Isanlu Jos – Saminaka Ikorodu - Itoikin

MDA EXPENDITURE - WATER: 

MDA EXPENDITURE - WATER Gurara Water Transfer Project Biu Water Supply Owena Multi-purpose Dam Alau Auxilliary Dam Goronyo Dam Enugu Water Supply Augmentation Zobe Water Supply Azare Water Supply Zaria Water Small Earth Dams Rural Water Schemes

MDA EXPENDITURE - POLICE: 

MDA EXPENDITURE - POLICE Police Pay police officers Training and re-training of police officers Rehabilitate police barracks Purchase communication equipment Purchase transportation equipment Purchase arms No recruitment on new police officers in 2006.

MDA EXPENDITURE - AGRICULTURE: 

MDA EXPENDITURE - AGRICULTURE Agriculture Pursue subsidy programs in the following areas Fertilizers Tractor procurement Machine, tractor and equipment rehabilitation program Buyer of the Last resort Pursue Chinese South – South Cooperative Program Pursue Presidential Initiatives National Special program for Food Security Seeds for crops and aquaculture

MDA EXPENDITURE - FCT: 

MDA EXPENDITURE - FCT Complete tanks and water treatment plant that will use water from Gurara Procure 30,000 automated water metres Complete express road spanning Central Business Area, Three Arms Zone and the Airport Provide complimentary infrastructure namely (Roads, Street lights e.t.c.) Millennium Park Complex Abuja Cultural Centre

CONCLUSION: 

CONCLUSION The 2006 Budget is designed to Solve the problems associated with the PAYG pension scheme. Clear arrears with respect to amounts due to local contractors (=N= 50 billion). Channel savings from debt relief into pro-poor programs (=N= 100 billion). Complete key projects that are near completion particularly in the following sectors – Education, Healthcare, Water, Power, Roads, Agriculture and FCT (=N= 520 billion). Improve security (=N= 200 billion) Ensure no increase in the price of petroleum products. (=N= 75 billion). Reforming the public service. (=N= 50 billion) We believe that these initiatives will Improve the business environment Create jobs, reduce poverty and generate wealth.