President Muhammadu Buhari has signed into law the revised N10.8 trillion budget passed by the National Assembly in June, Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed has disclosed.
Ahmed said government is determined to keep strictly with the January–December budget cycle even as plans are underway to submit the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTEF/FSP, later this month.
The minister while briefing principal officers of the Senate and House of Representatives led by the Senate President, Ahmad Lawan, and the Speaker, Femi Gbajabiamila, Thursday, disclosed that President Buhari had given directives to the ministry to expedite action on next year’s budget estimates to enable him present the 2021 budget proposal to the National Assembly by the end of September.
“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,” the minister said.
Ahmed while giving an update on the 2020 budget implementation between January and May 2020, stated that the federal government’s retained revenue was N1.48 trillion, an amount representing 56 percent of its target.
She added that out of the sum generated as revenue, oil revenues accounted for N701.6 billion; non-oil tax revenues N439.32 billion; Companies Income Tax, CIT, and Value Added Tax, VAT, collections – N213.24 billion and N68.09 billion; and Customs collection N158 billion, respectively.
“Other revenues amounted to N339.51 billion, of which independent revenues was N80.22 billion. 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 N1.25 trillion was expended for debt service and N1.32 trillion for personnel cost including pensions.
According to the minister, as at the end of May, only N253.33 billion 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 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 Petroleum Exporting Countries, OPEC, 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 $44.5 per 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, GDP, is expected to increase from N130,836.1 billion in 2020 to N132,125.4 billion in 2021 and then up to N138,415.8 billion in 2023,” Ahmed said.
The Senate president said “this meeting is holding at the instance of the minister of finance, budget and national planning, and the main purpose of the meeting is for her to brief the leadership of the National Assembly on the 2021–2023 Medium Term Expenditure Framework and Fiscal Strategy Paper.
“Therefore, it will not be wrong to say that the journey to the presentation of the 2021 budget estimates by the executive has started in earnest.
“It is our expectation in the National Assembly that this journey will lead to the presentation or laying of the budget estimates by the president before the end of September.”
Similarly, the minister of finance, budget and national planning has presented the draft 2021 to 2023 Medium Term Expenditure Framework and Fiscal Strategy Paper to the National Economic Council, NEC.
Mrs Ahmed, who spoke with State House correspondents after the virtual NEC meeting, said it was one of the main consultations that needed to be done before proceeding to the Federal Executive Council, FEC, for approval.
The virtual NEC was presided over by Vice President Yemi Osinbajo at the Presidential Villa, Abuja.
She said “as you know, the Nigerian economy has been facing significant challenges and this is the first half of the year.
“The micro-economic environment has been really challenged and disrupted; crude oil prices have declined and we have had to adjust our budget and our medium term plan as a result.
“And also, another development that has affected is the massive cut that OPEC has now imposed on its members and allies to our production volume.
“So, our crude oil production level as provided by OPEC is now 1.4 million barrels per day.’’
She said the issue of the gross revenue expected into the Federation Account which would subsequently be shared was also discussed.
According to her, the revised 2020 budget has a total expenditure of N9.16 trillion while the projection being made for 2021 budget is at N9.613 trillion.
“So, after consultations with NEC, National Assembly and with the public, we will now make any adjustments before we eventually go to FEC for approval.
“Our target is to continue with the momentum to ensure that we meet the January to December budget deadline and to be able to meet the deadline, we have to get the MTEF done and approved because it forms the framework for the budget,’’ she said.