President Buhari presents proposed 2021 budget of N13.08tn to national assembly

Nigeria's President, Mohammadu Buhari on Thursday presented a proposed budget of N13 Trillion naira to the National Assembly. Saying he remains committed to lifting 100 million Nigerians out of poverty in the next ten years.

The President, speaking during the presentation of the 2021 Draft Appropriation Bill at the Joint Session of the National Assembly in Abuja said the theme of the 2021 budget is economic recovery and resilience. He commended the effort of members in passing the 2021-2023 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper and expresses his hope that the National Assembly will pass the 2021 Appropriation Act on time.

In his statement, as quoted said " In view of the many challenges confronting us, we must accelerate our economic recovery process, promote social inclusion and strengthen the resilience of the economy. The 2021 Appropriation has, therefore, been themed the 'Budget of Economic Recovery and Resilience'. It is expected to accelerate the pace of our economic recovery, promote economic diversification, enhance competitiveness, and ensure social inclusion. Parameters & Fiscal Assumptions Underpinning the 2021 Appropriation

"Distinguished Members of the National Assembly, the 2021 – 2023 Medium Term Expenditure Framework and Fiscal Strategy Paper set out the parameters for the 2021 Budget, which include:

"- 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);-Exchange rate of N379 per US Dollar; and- GDP growth projected at 3.0 percent and inflation closing at 11.95 percent.

Finance Bill 2020

"Distinguished and Honourable Members; I have directed the Minister of Finance, Budget and National Planning to finalize the Finance Bill 2020, which will be forwarded for your kind consideration and passage into law, shortly after today's 2021 Budget presentation. The Finance Bill is to support the realization of our 2021 revenue projections, adopt appropriate counter-cyclical fiscal policies and enhance the efficiency of fiscal incentives," he said.

Planned 2021 Expenditure

The president said, "An aggregate expenditure of N13.08 trillion is proposed for the Federal Government in 2021. This includes N1.35 trillion spending by Government-Owned Enterprises and Grants and Aid funded expenditures of N354.85 billion." For 2021, the proposed N13.08 trillion 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 (to retire certain maturing bonds).

Fiscal Balance

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. It is, however, to be noted that we still face the existential challenge of the Coronavirus Pandemic and its aftermath; I believe that this provides a justification to exceed the threshold as provided for by this law.

"The deficit will 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 programs," he said

Senate President Ahmed Lawan in his earlier speech said "the National Assembly is again ready to pass the 2021 budget before the end of the year by the grace of God," the Senate President said.

"This will continue to enable planning and enhanced productivity and efficiency in the management and application of our resources."