The Federal Government of Nigeria has disclosed that she targets a revenue of N8.155trn in the 2020 fiscal year.
This disclosure was mafs during the presentation of the 2020 budget by President Buhari to the joint session of the legislative arm on Tuesday at Abuja.
Buhari said “the proposed N8.155 trillion revenue comprises N2.64trn, , non-oil tax revenues of N1.81 trillion and other revenues of N3.7 trillion representing 7 per cent higher than the 2019 comparative estimate of N7.594 trillion inclusive of the Government Owned Enterprises.
“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 the Sinking Fund to retire maturing bonds issued to local contractors is N296 billion.
“From the sum of N556.7 proposed for Statutory Transfers, N125 billion is for National Assembly; N110 billion for Judiciary; N37.83 billion for North East Development Commission (NEDC); N44.5 billion for Basic Health Care Provision Fund (BHCPF); N111.79 billion for Universal Basic Education Commission (UBEC) and N80.88 billion for Niger Delta Development Commission (NDDC) while allocation to National Human Rights Commission was increased from N1.5 billion to N2.5 billion, representing 67 percent increase.”
While giving the breakdown of allocation for capital expenditure, he stated that a total sum of N262 billion is for Works and Housing; N127 billion is for Power; N123 billion is for Transportation; N112 billion is for Universal Basic Education Commission; N100 billion for Defence; N100 billion for Zonal Intervention Projects; N83 billion for Agriculture and Rural Development; N82 billion for Water Resources while N81 billion is for Niger Delta Development Commission.
The sum of N48 billion is for Education; N46 billion is for Health; N40 billion is for Industry, Trade and Investment; N38 billion for North East Development Commission; N35 billion for Interior; N30 billion for Social Investment Programmes; N28 billion for Federal Capital Territory and N24 billion for Niger Delta Affairs Ministry.
The sum of N2.18 trillion debt service (representing 1.52 percent of estimated GDP) including drawdowns on project-tied loans and the related capital expenditure for year 2020, adding that the deficit will be financed by new foreign and domestic borrowings, Privatization Proceeds, signature bonuses and drawdowns on the loans secured for specific development projects.
From the sum of N2.45 trillion proposed for debt service in 2020 budget, 71 per cent is to service domestic debt which accounts for about 68 per cent of the total debt while the sum of N296 billion is provided for the Sinking Fund to retire maturing bonds issued to local contractors.
While speaking on the Non-Debt recurrent expenditure, President Buhari proposed the sum of N3.6 trillion for personnel and pension costs, an increase of N620.28 billion over 2019.
“This increase reflects the new minimum wage as well as our proposals to improve remuneration and welfare of our Police and Armed Forces. You will all agree that Good Governance, Inclusive Growth and Collective Prosperity can only be sustained in an environment of peace and security.
“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 revenue targets.”
Mr President also expressed optimism that 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.”
To this end, President Buhari reiterated his administration’s resolve towards aggressive and re-energised revenue drive will maintain debt-revenue ratio at acceptable and manageable levels, through the adoption of innovative borrowings instruments such as Sukuk, Green Bonds and Diaspora Bonds.
Under the National Social Investment Programme, Federal Government proposed N65 billion for the Presidential Amnesty Programme and N37.83 billion for North East Development Commission with the view to fast-track the rebuilding efforts in the North East region.
While giving the overview of the country’s economy performance so far, President Buhari explained that “Nigerian economy thus far has recorded nine consecutive quarters of GDP growth. Annual growth increased from 0.82 percent in 2017 to 1.93 percent in 2018, and 2.02 percent in the first half of 2019. The continuous recovery reflects our economy’s resilience and gives credence to the effectiveness of our economic policies thus far.
“We also succeeded in significantly reducing inflation from a peak of 18.72 percent in January 2017, to 11.02 percent by August 2019. This was achieved through effective fiscal and monetary policy coordination, exchange rate stability and sensible management of our foreign exchange. We have sustained accretion to our external reserves, which have risen from US$23 billion in October 2016 to about US$42.5 billion by August 2019. The increase is largely due to favourable prices of crude oil in the international market, minimal disruption of crude oil production given the stable security situation in the Niger Delta region and our import substitution drive, especially in key commodities.
“The foreign exchange market has also remained stable due to the effective implementation of the Central Bank’s interventions to restore liquidity, improve access and discourage currency speculation. Special windows were created that enabled small businesses, investors and importers in priority economic sectors to have timely access to foreign exchange.”
President Muhammadu Buhari, on Tuesday, formally presented an expenditure framework of N10.33 trillion and N8.155 trillion revenue to the joint session of the National Assembly for legislative scrutiny.