N1.6trn NNPC, Sovereign Wealth, Education, Funds Omitted In 2020 Budget
A total of N1.635 trillion key expenditure items captured in the 2020-2022 Medium Term Expenditure Framework (MTEF) are missing in the N10.594 trillion 2020 Budget recently passed by the National Assembly and assented to by President Muhammadu Buhari.
The MTEF is an annual rolling three-year expenditure plan setting out the medium-term expenditure priorities and budget constraints against which sector plans can be developed and refined.
Checks revealed that the N10.594 trillion 2020 fiscal plan christened “Budget of Sustaining Growth and Job Creation,” did not incorporate N1.635 trillion key expenditure items already captured for 2020 by the MTEF.
The projected expenditure items are N1.22 trillion for federally-funded projects in the oil and gas sector to be undertaken by the Nigerian National Petroleum Corporation (NNPC) on behalf of the federation and N272 billion transfers to Tertiary Education Trust Fund (TETEUND) for infrastructure projects in tertiary institutions.
Others captured in the 2020-2022 MTEF but missing in the 2020 budget are N82.35 billion for transfer to the Nigeria Sovereign Investment Authority (NSIA) for public-private partnership (PPP) /Presidential Infrastructure Development Fund (PIDF) and N61 billion provisioned for Presidential Power Initiative.
Buhari, while presenting the Appropriation Bill to the National Assembly on October 8, 2019, had stated that investing in critical infrastructure, human capital development and enabling institutions, especially in key job creating sectors as well as incentivising private sector investment essential to complement the federal government plans, policies and programmes remained the key focus in the 2020 fiscal year.
Dropping the four key expenditure items from the 2020 Budget may have everything to do with cost-cutting measures designed to reduce deficit due to dwindling revenue.
The 2020-2022 MTEF itself shows that Nigeria faces significant medium-term fiscal challenges, especially with respect to revenue generation and rapid growth in personnel costs.
The aggregate revenue available to fund the 2020 budget is projected at N8.42 trillion, which is 3.2 per cent or N263.94 billion more than the figure proposed by the executive, and 10.9 per cent over the 2019 Budget of N7.59 trillion.
The aggregate N10.59 trillion 2020 Budget (including government-owned enterprises) has a recurrent (non-debt) spending expected to total N4.84 trillion, which is 45.7 per cent of total, reflecting increases in salaries and pensions (including provisions for implementation of the new minimum wage).
Aggregate capital expenditure of N2.78 trillion is 26.2 per cent of total expenditure, and 12.6 per cent less than 2019 (inclusive of capital component of Statutory Transfers, government-owned enterprises capital and project-tied loans expenditures).