Isaac Anumihe, Abuja
As part of measures to meet the targeted revenue of N8.15 trillion in the 2020 Budget, the Federal Government has threatened to sanction any revenue-generating agency that falls short of its target.
Similarly, it said that it would reward agencies that achieve their targets in the year under review.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, disclosed this during the budget breakdown session in Abuja.
“Our fiscal reforms shall introduce new performance management frameworks to regulate the cost-to-revenue ratios for government-owned enterprises which shall come under significant scrutiny. We will reward exceptional revenue and cost management performance while severe consequences will attend failures to achieve agreed targets”, she said.
Besides, a Finance Bill had been forwarded to the National Assembly aimed at raising revenue for the government.
When passed, she explained, the bill would promote fiscal equity by mitigating instances of regressive taxation. Apart from reforming domestic tax laws to align with global best practices, the bill would introduce tax incentives for investments in infrastructure and capital markets.
Also, it would support micro, small and medium business in line with the government’s ease of doing business reforms.
While the oil revenue target for 2020 Budget is N2.64 trillion, non-oil revenue would attract NI.81 trillion and other sources of revenue, which include looted funds , diaspora funds etc, would bring N3.7 trillion.
Also, she put the projected total expenditure at N10.33 trillion from where the government would spend N2.145 trillion for Ministries, Departments and Agencies (MDAs); recurrent would take N4.88 trillion whereas debt service and sinking fund would gulp N2.453 trillion and N2. 96 trillion respectively.
“Recurrent (non-debt) spending is expected to rise by 11.28 per cent from N4.39 trillion in fiscal year to N4.88 trillion (reflecting increases in salaries and pensions, including provisions for implementation of the new minimum wage).
Capital expenditure (inclusive of transfers, GOEs capital and project-tied loans) as percentage of Federal Government expenditure is 24 per cent. At N2.45 trillion, debt service is 23.74 per cent of planned spending. Provision to retire maturing bond to local contractors increased by 169.09 per cent from N110 billion in fiscal year 2019 to N296 billion”, she said.
While overall budget deficit of N2.175 trillion in 2020 represents 1.52 per cent of Gross Domestic Products (GDP), budget deficit is to be financed mainly by borrowing N1.649 trillion, she noted.
The minister said that the government also hopes to garner the sum of N744.99 billion from domestic sources. It would equally garner the sum of N850 billion from foreign sources (gradual shift from commercial to more concessionary financing).
However, the aggregate revenue available to fund the 2020 is projected at N8.155 trillion (7 per cent or N561.2 billion more than the 2019 Budget of N7.59 trillion.
“32.34 per cent of this is projected to come from oil sources while the balance is to be earned from non-oil sources,” the Minister said