Takeaways from 2021 budget presentation to n’assembly

President Muhammadu Buhari on Thursday presented the 2021 budget proposal to a joint session of the national assembly in Abuja.

The 2021 budget termed “Budget of Economic Recovery and Resilience” is expected to accelerate the pace of Nigeria’s economic recovery, promote economic diversification, enhance competitiveness and ensure social inclusion.

Here are some takeaways.

The president during presentation said the 2021 Appropriation Bill, is designed to further deliver on the goals of the country’s economic sustainability plan — which provides a clear road map for post- Coronavirus economic recovery.

“A transition plan to take us from the Economic Recovery and Growth Plan (2017 – 2020) to the successor Medium- Term National Development Plan (2021 – 2025),” Buhari said.

The benchmark oil price is projected at $40 per barrel, with daily oil production estimate of 1.86 million barrels (inclusive of condensates of 300,000 to 400,000 barrels per day), the exchange rate of N379 per US Dollar; GDP growth projected at 3.0 percent and inflation closing at 11.95 percent. Oil revenue is projected at N2.01 trillion and non-oil revenue is estimated at N1.49 trillion.

In the proposed 2012 budget, total federally distributable revenue is estimated at N8.433 trillion, total revenue available to fund the 2021 federal budget is estimated at N7.886 trillion. This includes grants and aid of N354.85 billion as well as the revenues of 60 Government-Owned Enterprises.

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.

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 programmes.

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

The sum of N484.49 billion is provided for statutory transfers in the 2021 budget, this represents an increase of N56.46 billion (or 13 percent) over the revised 2020 provision. The Statutory Transfer provisions are:

Niger Delta Development Commission-N63.51 billion; North East Development Commission- N29.70 billion; National Judicial Council- N110.00 billion; Universal Basic Education Commission- N70.05 billion.

Independent National Electoral Commission- N40.00 billion; National Assembly- N128.00 billion; Public Complaints Commission- N5.20 billion; Human Rights Commission- N3.00 billion; Basic Health Care Provision Fund- N35.03 billion.

For debt servicing, the 20201 budget has provisioned N3.12 trillion, representing an increase of N445.57 billion from N2.68 trillion in 2020.

A total of N2.183 trillion has been set aside to service domestic debts while N940.89 billion has been provided for foreign debt service,  N220 billion is provided for transfers to the sinking fund to pay off maturing bonds issued to local contractors and creditors.

An aggregate sum of N3.85 trillion is expected to be available for capital projects in 2021. This is N1.15 trillion higher than the 2020 provision of N2.69 trillion. At 29 percent of aggregate expenditure, the provision moves closer to this Administration’s policy target of 30 percent.

According to the President,  the 2021 capital expenditure, focuses on the completion of as many ongoing projects as possible, rather than the commencement of new ones.

Key capital spending allocations in the 2021 Budget include: Power: N198 billion (inclusive of N150 billion for the Power Sector Recovery Plan); Works and Housing: N404 billion; Transportation: N256 billion; Defence: N121 billion.

Agriculture and Rural Development: N110 billion; Water Resources: 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; Niger Delta Development Commission: N64 billion.

The provision of N65 billion for the presidential amnesty programme is also retained in the 2021 Budget.

In addition, the sum of N63.51 billion has been appropriated for the Niger Delta Development Commission and N24.27 billion has been provided for the capital projects of the Ministry of Niger Delta Affairs.

The sum of N420 billion has been provided to sustain the social investment programme, N20 billion has also been set aside for the Family Homes Fund-Social Housing programme.