Emmanuel Thomas l Thursday, October 08, 2020
ABUJA, Nigeria – President Muhammadu Buhari today presented the 2021 budget appropriation of N13.08 trillion to the National Assembly, with a total deficit of N5.20 trillion.
Tagged ‘ Budget of Economic Recovery and Resilience’, the 2021 budget is expected to accelerate the pace of our economic recovery, promote economic diversification, enhance competitiveness and ensure social inclusion.
The 2021 budget is tied to a benchmark oil price of 40 US Dollars per barrel; Daily oil production estimate of 1.86 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day) and exchange rate of N379 per US Dollar.
Nigeria’s GDP growth is projected at 3.0 percent and inflation closing of 11.95 percent. The Nigerian government also projected N8.433 trillion for sharing among the federating states in 2021.
However, projected total revenue available to fund the 2021 Federal Budget is estimated at N7.886 trillion, including Grants and Aid of N354.85 billion as well as the revenues of 60 Government-Owned Enterprises.
Oil revenue is projected at N2.01 trillion, while non-oil revenue is estimated at N1.49 trillion.
The N13.08 trillion total expenditure comprises: Non-debt Recurrent Costs of N5.65 trillion; Personnel Costs of N3.76 trillion; Pensions, Gratuities and Retirees’ Benefits of N501.19 billion; Overheads of N625.50 billion; Debt Service of N3.124 trillion; Statutory Transfers of N484.49 billion and Sinking Fund of N220 billion.
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The 2021 Budget deficit (inclusive of Government Owned Enterprises and project-tied loans), is projected at N5.20 trillion.
This represents 3.64 percent of estimated GDP, slightly above the 3 percent threshold set by the Fiscal Responsibility Act, 2007.
“The deficit will be financed mainly by new borrowings totaling N4.28 trillion, N205.15 billion from Privatization Proceeds and N709.69 billion in draw downs on multilateral and bilateral loans secured for specific projects and programmes”, the President said.
The sum of N484.49 billion is provided for Statutory Transfers in the 2021 Budget, which represents an increase of N56.46 billion (or 13 percent) over the revised 2020 provision.
The Statutory Transfer provisions are: Niger Delta Development Commission – N63.51 billion; North East Development Commission – N29.70 billion; National Judicial Council – N110.00 billion; Universal Basic Education Commission – N70.05 billion; Independent National Electoral Commission – N40.00 billion; National Assembly – N128.00 billion; Public Complaints Commission – N5.20 billion; Human Rights Commission – N3.00 billion; and Basic Health Care Provision Fund – N35.03 billion.
“In compliance with the Fiscal Responsibility Act 2007, all beneficiaries of Statutory Transfers will be required to provide the Budget Office of the Federation with periodic reports on the allocation and expenditure of funds for inclusion in the quarterly Budget Implementation Report”, the president said.
Salaries and overheads in MDAs are as follows, N227.02 billion for the Ministry of Interior; N441.39 billion for the Ministry of Police Affairs; N545.10 billion for Ministry of Education; N840.56 billion for Ministry of Defence; and N380.21 billion for Ministry of Health.
The sum of N3.12 trillion was earmarked for debt service for the year 2021, representing an increase of N445.57 billion from N2.68 trillion in 2020.
Of the 3.12 trillion earmarked to service debts, a total of N2.183 trillion has been set aside to service domestic debts while N940.89 billion has been provided for foreign debt service, while N220 billion is provided for transfers to the Sinking Fund to pay off maturing bonds issued to local contractors and creditors.
Capital Expenditure is made up of an aggregate sum of N3.85 trillion is for capital projects in 2021. Out of the total sum, N1.80 trillion is for MDAs’ capital expenditure; N745 billion for Capital Supplementation; N355 billion for Grants and Aid-funded projects; N20 billion for the Family Homes Fund; N25 billion for the Nigeria Youth Investment fund; N336 billion for 60 Government Owned Enterprises; N247 billion for capital component of Statutory Transfers; and N710 billion for projects funded by Multi-lateral and Bi-lateral loans.
Key capital spending allocations in the 2021 Budget include:
Power: N198 billion (inclusive of N150 billion for the Power Sector Recovery Plan); Works and Housing: N404 billion; Transportation: N256 billion; Defence: N121 billion; Agriculture and Rural Development: N110 billion; Water Resources: N153 billion; Industry, Trade and Investment: N51 billion; Education: N127 billion; Universal Basic Education Commission: N70 billion; Health: N132 billion; Zonal Intervention Projects: N100 billion; and Niger Delta Development Commission: N64 billion.
