Osinbajo Explains Rationale for New Budgeting System

Vice-President, Prof. Yemi Osinbajo

President orders all MDAs to join IPPIS
Tobi Soniyi in Abuja
The Vice-President, Prof. Yemi Osinbajo, has said that the administration of President Muhammadu Buhari decided to change the nation’s budgeting system in order to achieve the administration’s socio-economic goals amidst dwindling oil revenues and the vast number of Nigerians who live in poverty.

A statement by the Special Assistant to the Vice-President on Media and Publicity, Mr. Laolu Akande, said Osinbajo spoke on Tuesday  while meeting with permanent secretaries and directors-general during a one-day sensitisation session on the 2016 budget and 2016-2020 Medium Term Plan of the federal government.

He said: “The greatest challenge to us is controlling ballooning recurrent expenditure and freeing up resources for growth-related capital expenditure.”
He added that the government would do something about poverty, adding, “something more direct, different from how we have done it in the past. So budgeting has to be done differently.” 

He explained that budget planning under the Buhari administration would restore the long term, policy-based approach to budgeting alongside a Zero-Based Budgeting which questions all expenses ensuring greater transparency.

This, he said, was unlike the traditional budgeting where baseline assumptions were taken for granted.

Under the Zero-Based Budgeting, the VP said expenditures would be reduced since every item would have to be justified.

Osinbajo said  the Treasury Single Account would help to avoid the under-declaration of revenues by ministries, departments and agencies of the federal government.

“There have been in the past, MDAs that worked outside the budget, for instance the NNPC, which was running huge revenues and spending outside the budgetary process, that is why we have the TSA,” the vice president asserted.

He said the TSA would enable government to free up revenues that would then become available for economic growth and development.

On the need to control expenditure of the federal government which he said wast oo high, the vice-president stated that MDAs would therefore be expected to cut costs.

He went on to disclose that Buhari had already instructed that every agency including the military and the universities must join the Integrated Personnel and Payroll Information Systems  (IPPIS), which would help  in curtailing some of abuses in the salaries and emoluments’ processes of the government.

Continuing he said: “We need to cut overheads too, we can’t spend as we used to spend. We need to block leakages, increase accountability and transparency. This is an absolute necessity, the level of corruption is an outrage and we have to deal with it.”

Also speaking at the session held at the Presidential Villa, the Head of Service, Mr. Danladi Kifasi, praised the Buhari presidency for the innovation of such a session coming early in the budget planning process.

According to him, it is the first time that permanent secretaries are invited this early for budget planning.

“It means we become critical owners of the process, not just a part of it,” he added.