President Buhari To Sign N10.8trn Amended Budget Into Law On Friday

Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning, has said President Muhammadu Buhari will sign the revised 2020 budget into law on Friday.

Ahmed said the move was targeted at keeping with the December-January budget circle.

“This for us is a journey towards ensuring that the progress that 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,” she said while briefing members of the National Assembly on Thursday. 

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

She added that out of the sum generated as revenue, oil revenues accounted for N701.6bn; non-oil tax revenues N439.32bn; Companies Income Tax (CIT) and Value Added Tax (VAT) collections – N213.24bn and N68.09bn; and Customs collection N158bn, respectively. 

“Other revenues amounted to N339.51bn, of which Independent revenues was N80.22bn. Recoveries and Stamp duty collected during the period are yet to be booked in the fiscal accounts,” Ahmed said. 

On Expenditure performance for the same period (January – May 2020), she disclosed that N1.25trn was expended for debt service; and N1.32trn for personnel cost, including pensions.

According to the Finance Minister, as at the end of May 2020, only N253.33bn 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 the same was “revised in line with the emergent realities.”

She stated that the 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 $1. 

Ahmed stressed that, “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 Organization of the Petroleum Exporting Countries’ production quota – and an additional 300,000 barrels per day of condensates, totaling about 1.7mbpd.”

She added that while the World Bank forecasts that crude oil prices will rise gradually from an average of $42 per barrel in 2021 to $44.5per barrel in 2022; and $47pb in 2023, it is also expected that Brent crude oil prices may 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 is expected to increase from N130,836.1bn in 2020 to N132,125.4bn in 2021 and then up to N138,415.8bn in 2023,” Ahmed said.