As the COVID-19 pandemic rages, the implementation of the N10.8 trillion financial appropriation for the year 2020 reached 92 per cent, especially for expenditure in the third quarter.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed this after the Federal Executive Council (FEC) approved the 2021 budget of 13.08tn.
Mrs. Ahmed noted that, “Just briefly, the performance of the FGN budget as at July, for revenue, was 68 per cent. We had a 68 per cent revenue performance prorated to July. The performance of expenditure, on the other hand, was 92.3 per cent, and that is to say salaries were fully paid, pensions were paid, debt service was made, as well as transfers classified as statutory.
Corroborating this, the Director-General of the Budget Office of the Federation, Ben Akabueze, said, “The overall budget implementation, expenditure wise, as of July was 92.3 per cent, and she (minister) pointed out items like debt service and personnel cost performed 100 per cent each.
“Capital budget as of that day has reached 60 per cent performance, and that is what brought down the overall average to 92 per cent. As at now, every agency of government has received at least 50 per cent of their 2020 capital budget released to them.”
On October 8, 2019, President Muhammadu Buhari presented the 2020 Budget of Sustaining Growth and Job Creation to the National Assembly with a proposal of N10.33tn expenditure.
However, with the coming of the pandemic, the budget was amended in July, 2020, to N10.8tn.
According to the 2019 Third Quarter Budget Implementation Report (BIR), the approved budget was N8.92tn.
The current performance of the 2020 amended budget of 92 per cent in the third quarter is higher than the 86.9 per cent of the expenditure in the 2019 budget.
The records show that as at Q3, the Federal Government’s actual aggregate revenue was N4.25tn, which is 81 per cent of the target, while from the budgeted expenditure of N6.69tn, at least N5.81tn was spent, representing 86.9 per cent performance.
N/Assembly gets N13.08tn proposal Thursday
The finance minister said President Buhari might submit the 2021 budget proposal to the National Assembly on October 8, 2020 (Thursday).
She said the Capital Expenditure (CAPEX) for the year was projected at N2.083tn, while oil benchmark was put at $40 per barrel; oil production at 1.86 million barrels per day (bpd), Gross Domestic Product (GDP) growth target at three per cent, inflation target at 11.95 per cent and foreign exchange (forex) set at N379 to $1. It also has a total aggregate expenditure of 29 per cent CAPEX with a deficit of N4.48tn.
“The total budget proposal that is made for 2021 is to enable us to attain a more inclusive growth and also to achieve the key objectives of government, which includes stimulating the economy, creating jobs, enhancing growth and creating infrastructural investment, also promoting manufacturing and local production.”
She expressed hope that Nigeria’s economy would recover to the path of growth early in 2021, hence projected revenue for the 2021 budget is N7.89tn and aggregate expenditure of N13.08tn and that the budget also integrated 60 government-owned enterprises far above the 10 incorporated for the 2020 budget.
‘2021 budget mindful of COVID-19 effects’
The minister also said the 2021 budget had been able to make more provision for human capital development, hence the Ministry of Health had its provision almost doubled.
She explained that, “The Ministry of Education has a significant increase. The details of the budget will be provided to the country after the president submits the budget which we hope may be on October 8.
“So, the details will be out. And following Mr. President’s submission, the Ministry of Finance, Budget and National Planning will also engage in a world press conference to provide the details. But what is unique about this is that the provision for human capital development, especially health, is doubled.”
The Minister of State for Budget and National Planning, Mr. Clement Agba, explained why the Federal Government is eyeing a growth rate of three per cent despite the COVID-19 pandemic.
Mr. Agba said this was because economic activities had picked up while the country had seen a steady increase in revenue.
“We expect to have more revenues to fund the budget. There is also a lot of improvement on our revenue generation. Even though we haven’t gotten to where we want to be, we have seen steady increase in revenue from 2018 till today and we expect that trajectory to continue as we implement the strategic revenue and growth initiative.”
The DG of the Budget Office, Mr. Akabueze, said the budget proposal was a reflection of the government’s switch to implementing the January to December fiscal year despite the COVID-19 interruption.
Mr. Akabueze said every agency of the government had received at least 50 per cent of their 2020 capital budget released to them.
“Despite the challenges of this year, this may be one year we won’t record the highest level of capital budget performance for a while. It is also reflective of the switch to implementing the January to December fiscal year despite interruption of COVID-19.”