Minister for Finance, Budget and National Planning, Mrs. Zainab Ahmed, has said under-recovery of premium motor spirit (PMS), popularly referred to as fuel subsidy, will gulp N450 billion in 2020.
She stated this on Monday in Abuja at the public presentation of the 2020 budget proposals.
Ahmed said it was called ‘under-recovery’ because it was the cost of operation of the Nigerian National Petroleum Corporation (NNPC): “We have a provision for under-recovery of PMS in the sum of N450 billion. If you look at the Budget Office website, it is in the fiscal framework, which is an annexure to the budget.”
President Muhammadu Buhari had last Tuesday presented a budget proposal of N10.33 trillion to a joint session of the National Assembly. He put the Federal Government’s estimated revenue in 2020 at N8.155 trillion, comprising oil revenue of N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenue of N3.7 trillion.
Other estimates are N556.7 billion for statutory transfers, N2.45 trillion for debt servicing and provision of N296 billion as sinking fund.
The 2020 budget is based on an oil production estimate of 2.18 million barrels per day, oil price benchmark of $57 per barrel and an exchange rate of N305 to a dollar.
Ahmed said recurrent (non-debt) spending was expected to rise by 11.28 per cent, from N4.39 trillion in 2019 to N4.88 trillion in 2020.
This, she said, would reflect in salaries and pensions, including provisions for implementation of the new minimum wage.
The minister said the overall budget deficit of N2.17 trillion represents 1.52 per cent of the gross domestic product (GDP) and N1.64 trillion of it would be funded by domestic and external borrowing.
According to her, external sources would provide N850 billion, while domestic sources would provide N744.99 billion.
Citing the top 12 ministries, departments and agencies’ capital allocations, she said the Ministry of Works and Housing was allocated N259.2 billion; Ministry of Power, N127.67 billion; Ministry of Transportation, N123.07 billion; and Ministry of Education (including Universal Basic Education Commission), N162.74 billion.
Others are Ministry of Defence, N99.87 billion; Ministry of Health, N90.98 billion; Ministry of Agriculture and Rural Development, N79.79 billion; and Ministry of Water Resources, N78.34 billion.
Some others are: Ministry of Humanitarian Affairs, Disaster Management and Social Development, N45.45 billion; Ministry of Aviation, N53.85 billion; Ministry of Industry, Trade and Investment, N41.34 billion; and Ministry of Science and Technology, N37.55 billion.
She noted that there were key expenditures captured in the Medium Term Expenditure Framework (MTEF) that were not in the 2020 budget.
“They are N61 billion for the Presidential Power Initiative, N1.22 trillion for federally-funded projects in the oil and gas sector to be undertaken by NNPC on behalf of the federation.
“Others are: N272 billion as transfers to Tertiary Education Trust Fund for infrastructure projects in tertiary institutions and N82.35 billion as transfer to Nigeria Sovereign Wealth Investment for public-private partnership/Presidential Infrastructure Development Fund,” she said.