FG Prepares ₦13.08trn Budget for 2021 with $40 Oil Price Estimate
The Federal Executive Council (FEC) on Wednesday in Abuja approved budgetary proposal of N13.08trillion for 2021 fiscal year.
The breakdown shows that Federal Government estimates to produce 1.86 million barrel of oil per day and uses $40 as oil price benchmark.
The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, made this known when she briefed State House correspondents on the outcome of the Council meeting.
She explained that the total aggregate revenue projected for the 2021 budget was N7.89 trillion with a deficit of N4.48 trillion.
The finance minister said the total capital expenditure projected in the budget is 29% of the aggregate expenditure.
This is an improvement over the 24 % projected in budget 2020.
“We have a total aggregate revenue of N7.89 trillion and also an aggregate expenditure of N13.08 trillion for 2021.
“There’s a fiscal deficit of N4.489 trillion, this represents 3.64%, slightly above what is required by the Fiscal Responsibility Act of 3% and also to report that the total capital expenditure that is projected in the Budget is 29% of the aggregate expenditure.
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“This is an improvement over the 24% that we had in the 2020 Budget, but slightly below the 30% that we targeted in the economic recovery.
“Just to clarify that the 1.86 million barrels per day (mbpd) crude oil production includes 400,000 condensate, so we have complied with the OPEC quota, which is placed at about 1.5 million barrels per day.
“So the 1.46 mbpd is in meeting with the OPEC quota,” she said.
The minister disclosed that the performance of the 2020 budget, as at July for revenue, was 68 %, while its performance for expenditure was 92 %.
“The performance of the 2020 Budget as at July, for revenue, was 68 % We had a 68 % revenue performance prorated to July.
“The performance of expenditure, on the other hand, was 92.3 % and that is to say salaries were fully paid, pensions were paid, debt service was made, as well as transfers classified as statutory.
“In presenting the Budget 2020, we had to report to Council some slight changes that need to be made on MTEF 2021/2023, which has since July been sent to the National Assembly by Mr President.
“Specifically, the exchange rate is going to be changed from 360 that we initially presented and submitted to Council and to the National Assembly, up to 379.
“The reason why this is happening is due to the exchange rate movement that the CBN has put in place.
“Also, there were some slight changes on miscellaneous revenues and signature bonuses after interaction with DPR, which resulted in some increase in revenue,” she added.
The minister stated that the 2021 budget proposal was aimed at enhancing inclusive growth and also to achieve the key objectives of government.
She said: “The total budget proposal that is made for 2021 is to enable us to attain a more inclusive growth and also to achieve the key objectives of government.
“These include; stimulating the economy, creating jobs, enhancing growth and creating infrastructural investment, also promoting manufacturing and local production.”
The minister further revealed that the budget assumptions that were presented to Council included the crude oil price benchmark at $40 per barrel; oil production come with exchange rate of N379 to $1.
Meanwhile, the budget target GDP growth of 3 % and inflation rate of 11.95 %.
She also expressed the hope that Nigeria’s economy would recover to the path of growth early in 2021.
The total aggregate revenue that is projected for the 2021 Budget is N7.89 trillion and what is unique about the 2021 Budget is that we have brought in the budgets of 60 government-owned enterprises.
“If you recall, in 2020 we brought in 10, now we have brought in 60.
“These 60 exclude NNPC and the Central Bank and the reason being NNPC, a national oil company, internationally national oil companies are not included in the national budget.
“Also, the CBN is an autonomous body. Only those two are excluded, 60 government-owned enterprises included.
“That is to say their revenue and all categories of expenditure are now integrated in the Budget.”
On the effect of COVID-19 on the 2021 budget proposal, the minister said provisions had been made in the budget to address such challenges.
She said: “The 2021 budget has been able to make more provision for human capital development. So, the Ministry of Health for example has its provision almost doubled.
“The Ministry of Education has a significant increase. The details of the budget will be provided to the country after Mr President submits the budget which we hope might be on the 8th of October. So, the details will be out.
“And following Mr President’s submission, the Ministry of Finance, Budget, and National Planning will also engage in a world press conference to provide the details.
“But what is unique about this is that the provision for human capital development, especially health is doubled.”
The minister disclosed that the budget proposal would be transmitted to the National Assembly on Thursday.
FG Prepares ₦13.08trn Budget for 2021 with $40 Oil Price Estimate
