2020 Budget: FG Proposes N9.12trn Estimate, Targets N7.17trn Revenue
The Federal Government has proposed N9.12trn as the 2020 budget estimate. It has deficit of about N2.28trn.
These were contained in the 2020-2022 Medium Time Expenditure Framework and Fiscal Strategy Paper sent to the National Assembly by President Muhammadu Buhari on Wednesday.
The figure is slightly higher than the 2019 estimate of N8.92tn.
It stated that the expenditure would include grants and donor funding of N36.39bn.
It projected N7.17tn as estimated revenue Nigeria is expecting from Value Added Tax and other revenues expected to fund the 2020 national budget.
The expected revenue projection, according to the document, is N170.41bn higher than that of 2019 which was N6.99tn.
The documents stated that the N34.2 per cent of the projection would come from oil sources while the balance would be earned from non-oil sources.
It added that the retained revenues of the 10 major Government-Owned Enterprises were considered, the aggregate Federal Government revenue is projected at N7.72tn.
The document read in part, “Interest payment on debt is estimated at N0.45tn while provision for Sinking Fund to retire maturing bonds to local contractors at N296bn.
“The provisions for personnel cost and pension costs are estimated at N2.67tn and N586.72bn respectively.
“In addition, N40.17bn representing one per cent of the consolidated revenue fund, has been earmarked for the Basic Health Care Provision, N22.73bn for GAV/Routine Immunisation in the Service Wide Votes and N89.44bn for the power reform programme.”
It further explained that with the provisions, only the sum of N1.01tn, exclusive of capital in statutory transfers, is available as amount for ministries, departments and agencies as capital expenditure.
This, the documents explained, is also with the inclusion of capital in statutory transfers, capital supplementation, grants and donor funded projects, as well as multi-lateral/bilateral projects-tied loans of N328.13bn and the capital expenditure amounting to N2.17tn.
It added, “With the inclusion of the planned expenditure of the top 10 GOES of N553.14bn, the proposed aggregate expenditure rises to an estimate of N10tn.
“With the inclusion of the GOEs capital estimated at N188.23bn, aggregate capital expenditure (inclusive of capital in statutory transfers) is estimated at N2.17tn.
“This represents 22 per cent of the aggregate projected Federal Government expenditure in 2020, which falls short of the 30 per cent target in the ERGP.
“This is the consequence of the slower growth in revenues than the rate of growth in non-discretionary recurrent expenditures, specifically debt service and personnel cost.
“Given the projected revenue and planned expenditure, the fiscal deficit is estimated at N1.95tn, about N33.61bn (1.8 per cent) more than the estimate of N1.92tn in 2019.
“This level of deficit is 1.37 per cent of GDP well below the threshold (3% of GDP) stipulated in the Fiscal Responsibility Act (FRA) 2007.
“In order to present a more comprehensive picture of the FGN’s fiscal operations, the revenues and expenditures of the top 10 GOEs as well as expenditures financed from project-tied loans will be captured in the FGN’s budget.
“Accordingly, the aggregate fiscal deficit for 2020 will be N228tn, which is 1.59 per cent of GDP, still within the three per cent threshold.”
President Buhari in a letter attached to the document and read at plenary by Senate President, Ahmad Lawan, urged the lawmakers to accord the documents urgent legislative action.