President Muhammadu Buhari led federal executive council has approved a total of twelve point six trillion naira as the country’s budget for three successive years.
It came as the Federal Executive Council (FEC) on Wednesday approved the 2021-2023 Medium Term Expenditure Framework at its virtual meeting presided over by President Muhammadu Buhari at the State House in Abuja.
The Minister of State for Finance, Budget and National Planning, Mr Clement Agba, told State House Correspondents after the meeting that $40 was fixed as the crude oil benchmark for the budget.
Oil production volume was projected at 1.6 million barrel per day; inflation rate,11.9 per cent; Gross Domestic Product growth rate of 3 per cent; and a revenue target of N7.50tn.
The government had originally budgeted N10.59tn as the budget for 2020. It later slashed it to N10.5tn, but the National Assembly eventually passed a revised figure of N10.8tn amid the economic challenges posed by the raging COVID -19 pandemic.
But, the figure is to further rise to N12.6tn in 2021.
Agba added that the GDP projection at the end of 2020 was expected to cruise at -4.42 per cent but would later read -1.8 per cent.
On revenue target, the minster said whereas in 2020, the projection was N5.84tn, it was projected to climb to N7.50tn in 2021.
Agba added that 63 Government Owned Enterprises were expected to raise another N2.17tn to fund the budget.
He explained that this would bring the total revenue in line with the budget size of N12.6tn.
However, he admitted that there would be a deficit to be funded through borrowing.
He added, “Yes, I spoke of the various assumptions that has been made in terms of parameters and those assumptions are what drives revenues that we get and in terms of how you are able to reflate the economy and spend helps your GDP.
“For Nigeria, it was projected that by the end of this year we should have the GDP top at -4.42 per cent. However, with the stimulus if properly done and executed, we expect that the GDP will improve to about negative -1.8 per cent.
“So in terms of the revenue projection, for 2020 it was N5.84tb but for 2021 we expect that it will be N7.50tn.
“Even though the oil production is much lower than our capacity, because we are restricted by the OPEC Plus quota in order to get the prices at par, we have brought in 63 Government Owned Enterprises (GOE).
“We are bringing them into the budget order to be able to sure up the budget by additional N2.17tn into the budget, hence we are saying we are projecting a larger budget size for 2021 over and above the N10.84tn for the revised 2020 budget.
“When you look at the N7.50tn nd the expectations to spend N12tn, yes definitely there will be gap and that gap has to be financed.
“Is the plan for borrowing payment? Yes, there is. Even in the 2020 budget we had provisions to repay debt and in the 2021 there is provision to repay debt.
“There is a sinking fund, we look at the ratio and ensure that we are able to pay our debts. Of course that is why we have the debt management office to run those numbers and advise us.”