Nigeria’s Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, Thursday met with the leadership of the National Assembly on plans to submit the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) later this month.
The Minister while briefing principal officers of the Senate and House of Representatives led by the Senate President, Ahmad Lawan, and the Speaker, Femi Gbajabiamila, disclosed that President Muhammadu Buhari had given directives for her ministry to expedite action on next year’s budget estimates to enable him present the proposal to the National Assembly by end of September this year.
She further noted that in keeping with the January – December budget cycle, Buhari will today sign into law, the revised N10.8 trillion budget for the year 2020 passed by the National Assembly in June.
“This for us is a journey towards ensuring that the progress that we have made as a collective to return the fiscal year to January – December is maintained for the 2021 budget as well. “The President has directed that we must deliver the budget to the National Assembly by the end of September,” the Finance Minister said.
While giving an update on the 2020 budget implementation between January and May 2020, Ahmed revealed that the Federal Government’s retained revenue was N1.48 trillion, representing just 56 percent of its target.
On revenue generation she stated that out of government’s total receipts, oil revenues accounted for N701.6 billion; while non-oil tax revenues stood at N439.32 billion; with Companies Income Tax (CIT) and Value Added Tax (VAT) collections at N213.24 billion and N68.09 billion respectively. According to her, Customs collection stood at N158 billion.
“Other revenues amounted to N339.51 billion, of which Independent revenues was N80.22 billion. Recoveries and Stamp duty collected during the period are yet to be booked in the fiscal accounts,” Ahmed said.
On expenditure performance for the same period (January – May 2020), she disclosed that N1.25 trillion was expended for debt service; and N1.32 trillion for personnel cost, including pensions.
She also revealed that at the end of May 2020, only N253.33 billion had been released for capital expenditure.
While giving the underlying assumptions for the macro-economic parameters and targets of the 2021 – 2023 Medium Term Expenditure Framework, she pointed out that these were “revised in line with the emergent realities.”
She stated that the Oil Price Benchmark for the 2021 fiscal year was pegged at USD$35; and USD$40 for 2022 and 2023, respectively.
Oil Production (mbpd) was placed at 1.86 for 2021, 2.09 for 2022, and 2.38 for the 2022 fiscal year; while the Exchange Rate remains at N360 to USD$1.
Ahmed stressed that, “although Nigeria’s total production capacity is 2.5 million barrels per day, current crude production is about 1.4 million barrels per day – in compliance with the Organisation of the Petroleum Exporting Countries’ production quota – and an additional 300,000 barrels per day of condensates, totaling about 1.7mbpd.”She added that while the World Bank forecasts that crude oil prices will rise gradually from an average of USD$42 per barrel in 2021 to USD$44.5 per barrel in 2022; and USD$47pb in 2023, it is also expected that Brent crude oil prices may average $41 per barrel during the second half of 2020 and $50pb during 2021, climbing as high as $53pb by the end of next year.
“The nominal Gross Domestic Product (GDP) is expected to increase from N130,836.1 billion in 2020 to N132,125.4 billion in 2021 and then up to N138,415.8 billion in 2023,” Ahmed said.