President Muhammadu Buhari has laid the 2020 budget proposal of over N10 trillion before a joint session of the National Assembly.
Addressing the lawmakers on Tuesday, President Buhari said the budget tagged; ‘Budget of Sustaining Growth and Job Creation’ was based on N8.155 trillion total revenue projection and N10.33 trillion total expenditure.
Oil price benchmark
He also said the appropriation has an oil price benchmark of $57 dollars bench Mark per barrel.
“The sum of N8.155 trillion is estimated as the total Government revenue in 2020 and comprises oil revenue N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenues of N3.7 trillion. This is 7 percent higher than the 2019 comparative estimate of N7.594 trillion inclusive of the Government Owned Enterprises.
“The increasing share of non-oil revenues underscores our confidence in our revenue diversification strategies, going forward. Furthermore, in our efforts to enhance transparency and accountability, we shall continue our strict implementation of Treasury Single Account (TSA) to capture the domiciliary accounts in our foreign missions and those linked to Government Owned Enterprises.
“An aggregate expenditure of N10.33 trillion is proposed for the Federal Government in 2020. The expenditure estimate includes statutory transfers of N556.7 billion, non-debt recurrent expenditure of N4.88 trillion and N2.14 trillion of capital expenditure (excluding the capital component of statutory transfers). Debt service is estimated at N2.45 trillion, and provision for Sinking Fund to retire maturing bonds issued to local contractors is N296 billion.”
“The 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) set out the parameters for the 2020 Budget. We have adopted a conservative oil price benchmark of US$57 per barrel, daily oil production estimate of 2.18 mbpd and an exchange rate of N305 per US Dollar for 2020.
“We expect enhanced real GDP growth of 2.93% in 2020, driven largely by non-oil output, as economic diversification accelerates, and the enabling business environment improves. However, inflation is expected to remain slightly above single digits in 2020,” President Buhari said.
The Nigerian leader said government would continue to maintain its Treasury Single Account TSA, so as to reap in more revenue that will enhance development as well as prevent corruption in its Ministries, Departments and Agencies MDAs.
On statutory transfers, the President announced that the National Assembly has been allocated N125 billion in the 2020 budget while the Judiciary got N110 billion, Niger Delta Development Commission NDDC got 80.8billion.
“The sum of N556.7 billion is provided for Statutory Transfers in the 2020 Budget and includes: N125 billion for the National Assembly; N110 billion for the Judiciary; N37.83 billion for the North East Development Commission (NEDC); N44.5 billion for the Basic Health Care Provision Fund (BHCPF); N111.79 billion for the Universal Basic Education Commission (UBEC); and N80.88 billion for the Niger Delta Development Commission (NDDC), which is now supervised by the Ministry of Niger Delta Affairs.
“We have increased the budgetary allocation to the National Human Rights Commission from N1.5 billion to N2.5 billion. This 67 percent increase in funding is done to enable the Commission to perform its functions more effectively,” he said.
The President the 2020 appropriation bill has a budget deficit of N2.8 trillion.
President Buhari, who blamed the delayed implementation of the 2019 budget on the late passage of this year’s budget by the 8th assembly, appealed to the legislators to accelerate work on the budget proposal, so as to return the country to the January-December budget cycle just the way they handled the Medium-Term Expenditure Framework, MTEF, which was passed within one week.
President Buhari noted that the sum of N2.45 trillion has been budgeted for debt servicing in the 2020 budget, out of which N296 billion would be for local debts.
The President said Value Added Tax would be increased from 7% to 7.5%, explaining that the extra revenue to be recouped from that would be channeled to the health, education and infrastructure sectors.
President of the Senate, Ahmed Lawan pledged that the legislators would expedite action on the passage of the appropriation bill.
He urged MDA’s to cooperate with the National Assembly, to achieve the goal of returning the country to January -December budget cycle.
“The month of October has been dedicated for budget defence sessions by MDAs, other legislative processes would be concluded in November and the National Assembly intends to pass the budget by December,” Lawan said.
The Speaker, House of Representatives, Femi Gbajabiamila praised the harmonious working relationship existing between the legislative and executive arms of government.
He also pledged that the lawmakers would do their best to pass the budget by the end of the year.