Minister of Finance, Mrs Kemi Adeosun, who gave this indication in London while addressing international investors, said the decision was favoured against an option of increased borrowing to plug the increasing revenue gap.
Though she did not specify the expected amount to be cut from the budget or any particular expenditure head to be affected, a budget office source told Vanguard that looking at the current revenue trend, over 50 percent of the capital expenditure budget would not be implemented.
This gives about N900 billion out of the total N1.8 trillion budgeted for capital expenditure in 2016. The source also said that though the present government adopted a zero-based budgeting, the unimplemented portions would be transferred to 2017 budget.
Adeosun said the government would not want to increase its debt to GDP ratio in 2016, but hinted that the ratio would eventually go up over the next three years to about 20 per cent from current 13 per cent, indicating the current government under President Mohammadu Buhari would be borrowing annually throughout its first term.
The government had planned to borrow both from domestic and international markets to plug its 2016 budgeted deficit of N2.2 trillion. Meanwhile, the minister had stated that the treasury single account, TSA, has witnessed significant increase in revenue to N3.3 trillion in May, up from N2.9 trillion in March.
Adeosun also noted that the ministry was continuing to unearth pockets of revenue that had escaped its net, including visa fees, airport landing charges and shipping levies.