Frequently Asked Questions
The Nigerian budget is the earning and spending plan of Government within a financial year or one year period.
The budget is funded mainly from revenues from oil sales, taxes paid by companies/individuals, revenues from customs and excise and borrowing (Foreign and Domestic).
Capital expenditure are those expenditures that are meant for investments in goods and services that are meant to be consumed beyond one budget year. They are key to the provisions of public services to the citizens. e.g Infrastructure Development.
Recurrent expenditures are those incurred every year to maintain the running and operations of Government. e.g Wages and Salaries.
A deficit budget occurs when the planned expenditure of Government exceeds the planned revenue within a financial year.
Its a process that links policies, plans and budgets of Government over a period of 3-5 years. The MTEF has four major components; ERGP,MTSS, MTFF and MTBudget
The ERGP is Government’s economic and development plan, to bring an economy out of recession into the path of growth and economic sustainability.
You can monitor the budget by matching the budget allocations with actual expenditures and in the case of the capital budget, the executed projects can be compared with the allocations in the budget.
Budget Preparation is quite a process; there a re several processes that go into the budget preparation;
a. Government develops a plan
b. Government estimates how much it would cost to implement this plan.
c. The items in the plan are prioritized and divided into years.
d. For an annual budget, Government will estimate the possible revenues in that year form all sources and match it with the expenditure that it wants to incur in that year. If Government revenue is not enough to cover the expenditure it will result to borrowing or scale down the expenditure. Government Borrowing has to be inline with the provisions of the fiscal responsibility act. Which implies that the deficit budget must not exceed 3% of the country’s current Gross Domestic Product (GDP)
As a citizen i can be part of the budget process by telling Government what should be included in the budget. Citizens can do this via their elected representative or via other advocative means or participating in budget consultation process of Government.
You can find your state budget in your state ministry responsible for budget and planning or the website of your state Government.
The Deficit in 2017 budget will largely be funded from foreign and domestic borrowings.