The Federal Government of Nigeria has hinged the N13.08 trillion 2021 budget on an oil price benchmark of $40 per barrel and a daily oil production estimate of 1.86 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day).
The central government is also basing the budget estimates on the exchange rate of N379 per US dollar, Gross Domestic Product (GDP) growth projected at 3.0 percent, and inflation closing at 11.95 percent.
President Muhammadu Buhari, who stated this at the presentation of the 2021 budget estimate to a joint session of the National Assembly, said these were the parameters and fiscal assumptions underpinning the 2021 Appropriation as contained in the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Buhari also disclosed that he has directed the Minister of Finance, Budget, and National Planning to finalise the Finance Bill 2020, which will be forwarded for consideration and passage into law by the National Assembly.
Buhari explained that the Finance Bill is to support the realisation of the 2021 revenue projections, adopt appropriate counter-cyclical fiscal policies, and enhance the efficiency of fiscal incentives.
Out of the proposed N13.08 trillion expenditure, the non-debt recurrent cost is allocated 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 (to retire certain maturing bonds).
According to the Appropriation Bill, the 2021 Budget deficit (inclusive of Government-Owned Enterprises and
project-tied loans), is projected at N5.20 trillion representing 3.64 percent of estimated GDP, slightly above the 3 percent threshold set by the Fiscal Responsibility Act, 2007.
The deficit is to be financed mainly by new borrowings totaling N4.28 trillion, N205.15 billion from Privatization Proceeds, and N709.69 billion in drawdowns on multilateral and bilateral loans secured for specific projects and programmes.
Highlights of the budget showed that of the N484.49 billion provided for Statutory Transfers in the 2021 Budget, National Assembly got N128.00 billion; the Niger Delta Development Commission is allocated N63.51 billion; North East Development Commission gets N29.70 billion, and the National Judicial Council has N110.00 billion.
Also, under the Statutory Transfers, Universal Basic Education Commission is given, N70.05 billion; Independent National Electoral Commission – N40.00 billion; Public Complaints Commission – N5.20 billion; Human Rights Commission – N3.00 billion; and Basic Health Care Provision Fund – N35.03 billion.
The sums of N227.02 billion are allocated to the Ministry of Interior; N441.39 billion for the Ministry of Police Affairs; N545.10 billion for the Ministry of Education; N840.56 billion for the Ministry of Defence; and N380.21 billion for the Ministry of Health in the 2021 recurrent cost estimate for payment of salaries
and overheads in MDAs providing these critical public services.
The Federal has allocated an aggregate sum of N3.85 trillion for capital projects in the 2021 budget with N1.80 trillion for MDAs’ capital expenditure; N745 billion for Capital Supplementation; N355 billion for Grants and Aid-funded projects and N20 billion for the Family Homes Fund.
The capital expenditure also includes N25 billion for the Nigeria Youth Investment Fund; N336 billion for 60 Government-Owned Enterprises; N247 billion for the capital component of Statutory Transfers; and N710 billion for projects funded by Multi-lateral and Bi-lateral loans.
The 2021 capital budget is N1.15 trillion higher than the 2020 provision of N2.69 trillion which is at 29 percent of aggregate expenditure, hence moving closer to the present Administration’s policy target of 30 percent.
Further breakdown of the capital expenditure in 2021 showed that Power is allocated, N198 billion (inclusive of N150 billion for the Power Sector Recovery Plan); Works and Housing: N404 billion; Transportation: N256 billion; Defence: N121 billion; and Agriculture and Rural Development: N110 billion.
Also, Water Resources is allocated 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 under the capital projects budget.
