Pegs crude oil benchmark at $40
Projects N2.083trn for Capital Expenditure
Despite the fall in revenue occasioned by the COVID-19 pandemic, the federal government has pro-jected a budget of N13.08trillion for the 2021 fiscal year.
Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed disclosed this to State House correspondents after the virtual federal executive council meeting presided over by President Mu-hammadu Buhari at the presidential villa.
The minister who was accompanied by the mi- nister of state for Budget and National Planning, Clem-ent Agba; the minister ofInformation and Culture Lai Mohammed and the director-general of the Budget Office, Ben Akabueze, also said the projected Capital Expenditure for the year is projected at N2.083 trillion.
According to her, the oil benchmark has been pegged at $40 per barrel.
Other indices that are projected to tune the 2021 Budget include oil production at 1.86 mil- lion barrels per day, including 400,000 barrels of condensate; Gross Domestic Product (GDP) growth target at 3 per cent; inflation target at 11.95 per cent; and foreign exchange set at N379 to one dollar.
The minister said, “The Ministry of Finance, Budget and National Planning presented to Council the proposal for the 2021 Budget. Before presenting the proposal, we also presented the performance of 2020 Budget to July 2020.
“Just briefly, the performance of the FGN Bud- get as of July, for revenue, was 68%. We had a 68% revenue per- formance 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 trans- fers classified as statutory.
“In presenting the Budget 2020, we had to re- port to the Council some slight changes that need to be made on MTEF 2021/2023, which has sin- ce 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 submit-ted to the Council and to the National As- sembly, up to 379. The reason why this is happe- ning is due to the exchange rate movement that the CBN has put in place.
“Also, there were some slight changes in mis- cellaneous revenues and signature bonuses after inter-action with DPR, which resulted in some increase in revenue.
“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, which includes stimulating the economy, creating jobs, enhancing growth and creating an infrastructural investment, also promoting manufacturing and local production.
“The budget assumptions that were presented to Council today include crude oil price benchmark at $40 per barrel; oil production at 1.86 million barrels per day; Exchange rate of N379 to US$1; GDP growth target of 3 per cent and inflation rate of 11.95 per cent.
“We do expect that Nigeria’s economy will recover to the path of growth early in 2021, so the total ag-gregate 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-ow- ned enterprises. If you re-call, 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, in-ter- nationally national oil companies are not included in the national budget. Also, CBN is an autono-mous body.
“Only those two are excluded, 60 government-owned enterprises included. That is to say, their reve-nue and all categories of expenditure are now integrated into the Budget.
“We have a total aggregate revenue of N7.89 trillion and also an aggregate expenditure of N13.08 tril-lion for 2021. There’s a fiscal deficit of N4.489 trillion, this represents 3.64%, slightly above what is re-quired 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.
The minister further explained that this is an improve- ment over the 24 per cent that they had in the 2020 Budget, but slightly below the 30 per cent that the government targeted in the economic recov-ery.
She clarified that the 1.86 million barrels per day crude oil production includes 400,000 condensates, so they have complied with the OPEC quota, which is placed at about 1.5 million barrels per day. So the 1.46 is in meeting with the OPEC quota.
“This is important to us because as you report if you just report the 1.86, some members of the OPEC appear to think that we are exceeding OPEC quota, whereas we are reporting oil and condensate,” she added.
Asked about what specific influence COVID-19 has on 2021 budget, she said the budgets for education and health had been increased.
Her words: “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, Bud- get, and National Planning will also engage in a wor- ld press conference to provide the details. But what is unique about this is that the provision for human capital development, especially health is doubled”.
On his part, the DG budget Akabueze said the overall budget implementation expenditure wise as of July was 92.3 per cent.
He said items like debt service, personnel cost performed 100 per cent.
He stated: “Capital budget as of that day has rea- ched 60% performance and that is what then brought down the overall average to 92 per cent.
As of now, every agency of government has received at least 50 per cent of their 2020 capital budget released to them.
“Indeed, despite the challenges of this year, this might be one year we won’t record the highest le- vel of capital budget performance for a while. It is also reflective of the switch to implementing Janu- ary to December fiscal year despite interruption of COVID-19”.
Ahead 2021 Budget Presentation, Senate Gets 2021-2023 MTEF/FSP Report
The Senate yesterday received the report of the Joint Committee on Finance and National Planning and Economic Affairs on 2021-2023 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The report, which was presented at plenary, was laid by the Committee chairman, Senator Solomon Adeola (APC, Lagos West).
LEADERSHIP recalls that the president of the back from the two-month recess on Tuesday had hin- ted that the consideration and passage of the MTEF/ FSP documentwould precede the presentation of the 2021 budget estimates by President Muhammadu Buhari next week.
The Senate is expected to consider the report on the next legislative day as relevant committees have been directed by Lawan to provide adequate copies of the report to members of the Senate.
Reps Approve N13.08trn, $40 Oil Benchmark
Also, the House of Representatives yesterday ap- proved the sum of N13.08 trillion as expenditure for the 2021 fiscal year, $40 oil benchmark, and N379 exchange rate as well as N4.28 trillion borrowing plan for Nigeria.
The chairman, House Committee on Finance, Hon James Faleke who made this known when he pre-sented the report at plenary, said that it was sequel to the approval of the report of the Joint Commit-tee on Finance Appropriations National Planning and Economic Development on the 2021-2023 Medi-um Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
Falake explained that in the report, the total recurrent (Non-Debt) worth N5.67 trillion; Personnel Costs (MDAs and Government Owned Enterprises (GOEs) worth N3.76 trillion; Capital expenditure (excluding of transfers) stands at N3.56 trillion; Special Intervention (Recurrent) worth N350 billion while N20 billion was proposed as Special Intervention.
Also, the country’s crude oil production was esti- mated at 1.86mbpd, 2.09mbpd and 2.38mbpd for 2021, 2022 and 2023 fiscal years.
In the report, Nigeria’s GDP growth rate was peg- ged at 3.00 per cent; inflation 11.95 per cent; N7.89 trillion federal government retained revenue; N5.20 trillion fiscal deficit; statutory transfers pegged at N484.49 trillion; Pensions, Gratuities and retirees benefits worth N552.8billion.
In the bid to achieve the revenue targets, the fe- deral government reeled out plans to broaden its tax net, specifically a 10 per cent year-on-year basis; and aggregate consumption was estimated at N118.89 trillion in 2021 from N117.91 trillion estimated for 2020. The Value Added Tax (VAT) projections over the medium term are based on holding the rate at 7.5 per cent.
Also, under the macro-economic policy, from the sum of N500 billion COVID-19 crisis intervention fund initiated by the federal government to address emerging and priority funding needs, N36 billion is for support of state governments; N56.46 billion for jobs and food for All.