Buhari To Sign Revised ₦10.8 Trillion 2020 Budget Into Law Today

President Muhammadu Buhari will today sign into law the revised 2020 budget of N10.8 trillion. The Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, disclosed this yesterday while briefing the leadership of the National Assembly on plans to submit the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) later this month.

Ahmed, who briefed principal officers of the Senate and House of Representatives, led by the Senate President, Ahmad Lawan and speaker, Femi Gbajabiamila, said the President had given directives for the Ministry to expedite action on next year’s budget estimates to enable him present the 2021 budget proposal to the National Assembly by the end of September this year.

“This for us is a journey towards ensuring that the progress we have made as a collective to return the fiscal year to January – December is maintained for the 2021 budget as well.

“The President has directed that we must deliver the budget to the National Assembly by the end of September,” the Finance Minister said.

Ahmed, while giving an update on the 2020 budget implementation between January and May 2020, stated that the Federal Government’s retained revenue was N1.48 trillion, an amount representing 56 percent of government’s target.

She added that out of the sum generated as revenue, oil revenues accounted for N701.6 billion; non-oil tax revenues N439.32 billion; Companies Income Tax (CIT) and Value Added Tax (VAT) collections – N213.24 billion and N68.09 billion; and Customs collection N158 billion, respectively.

She added: “Other revenues amounted to N339.51 billion, of which Independent revenues was N80.22 billion. Recoveries and Stamp duty collected during the period are yet to be booked in the fiscal accounts.’’

On Expenditure performance for the same period (January – May 2020), the minister disclosed that N1.25 trillion was expended for debt service; and N1.32 trillion for Personnel cost, including Pensions.

According to her, as at the end of May 2020, only N253.33 billion had been released for capital expenditure.

Ahmed, while giving underlying assumptions driving the macro-economic parameters and targets of the 2021 – 2023 Medium Term Expenditure Framework, said same was “revised in line with the emergent realities.”

She said oil price benchmark for the 2021 fiscal year was pegged at $35; and $40 for 2022 and 2023, respectively.

Oil Production (mbpd) was placed at 1.86 for 2021, 2.09 for 2022, and 2.38 for the 2022 fiscal year; while the Exchange Rate remains at N360 to USD$1.

“Although Nigeria’s total production capacity is 2.5 million barrels per day, current crude production is about 1.4 million barrels per day – in compliance with the Organisation of the Petroleum Exporting Countries’ production quota – and an additional 300,000 barrels per day of condensates, totaling about 1.7mbpd,’’ the minister said.

She added that while the World Bank forecasts that crude oil prices would rise gradually from an average of $42 per barrel in 2021 to $44.5 per barrel in 2022; and $47pb in 2023, it was also expected that Brent crude oil prices might average $41 per barrel during the second half of 2020 and $50pb during 2021, climbing as high as $53pb by the end of next year.

“The nominal Gross Domestic Product (GDP) is expected to increase from N130,836.1 billion in 2020 to N132,125.4 billion in 2021 and then up to N138,415.8 billion in 2023,” Ahmed said.

Earlier in his welcome address, the Senate President, Ahmad Lawan, said: “This meeting is holding at the instance of the Minister of Finance, Budget and National Planning, and the main purpose of the meeting is for the Minister to brief the leadership of the National Assembly on the 2021 – 2023 Medium Term Expenditure Framework and Fiscal Strategy Paper.

“Therefore, it will not be wrong to say that the journey to the presentation of the 2021 budget estimates by the Executive arm of Government has started in earnest.

“It is our expectation in the National Assembly, that this journey will lead to the presentation or laying of the budget estimates by the President before the end of September by the grace of God.”