2021 Budget: Federal Executive Council approves N13.08 trillion estimate

The Federal Executive Council has, on Wednesday, approved a budget estimate of N13.08 trillion for the 2021 fiscal year.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this to State House correspondents at the end of the council meeting.

The council meeting was presided by President Muhammadu Buhari.

Mrs Ahmed disclosed that the budget proposal was designed to enable the country attain inclusive growth.

Other key objectives of the budget, she said, include stimulating the economy, creating jobs, enhancing growth, creating infrastructural investment and promoting manufacturing and local production.

Key Assumptions

The minister listed the key projections upon which the budget estimate was built.

According to her, the budget proposal was predicated on a $379 exchange rate, oil benchmark of $40 barrel per day, oil production volume of 1.86 million per day, Gross Domestic Product growth target of three per cent; and inflation rate of 11.95 per cent.

“The budget assumptions that were presented to the council today include: one, crude oil price benchmark at $40 per barrel; two, oil production at 1.86 million barrels per day; three, exchange rate of N379 to $1; four, Gross Domestic Product growth target of three per cent; and five, inflation rate of 11.95 per cent,” she said.

“We do expect that Nigeria’s economy will recover to the path of growth early in 2021; so the total aggregate revenue that is projected for the 2021 budget is N7.89tn and what is unique about the 2021 budget is that we have brought in the budgets of 60 government-owned enterprises. If you recall, in 2020 we brought in 10, now we have brought in 60.

“These 60 exclude NNPC and the Central Bank and the reason being NNPC, (is) a national oil company, internationally national oil companies are not included in the national budget.”

Mrs Ahmed explained further that the CBN is an autonomous body.

Aside the two entities, the minister said, 60 government-owned enterprises are now included in the budget.

She explained further that this implies that their revenue and all categories of expenditure are now integrated into the budget.

“We have a total aggregate revenue of N7.89tn and also an aggregate expenditure of N13.08tn for 2021,” Mrs Ahmed said.

“There is a fiscal deficit of N4.49tn, this represents 3.64 per cent, slightly above what is required by the Fiscal Responsibility Act of three per cent and also to report that the total capital expenditure that is projected in the budget is 29 per cent of the aggregate expenditure.

“This is an improvement over the 24 per cent that we had in the 2020 budget, but slightly below the 30 per cent that we targeted in the economic recovery.”

The minister added that the 1.86 million barrels per day crude oil production includes 400,000 condensates, noting that Nigeria complied with the OPEC quota, which is placed at about 1.5 million barrels per day.

“So, the 1.46 million is in meeting with the OPEC quota,” she said.

“This is important to us because as you report, if you just report the 1.86 million, some members of the OPEC appear to think that we are exceeding OPEC quota, whereas we are reporting oil and condensate.”

2020 Budget performance

Mrs Ahmed spoke about the performance of the 2020 budget at the council, she told reporters.

She said: “The performance of the FGN budget as of July, for revenue, was 68 per cent. We had a 68 per cent revenue performance prorated to July.

“The performance of expenditure, on the other hand, was 92.3 per cent and that is to say salaries were fully paid; pensions were paid; debt service was made, as well as transfers classified as statutory.”