Buhari proposes N13.08 trillion spending for 2021

08 Oct 2020
Financial Nigeria


The 2021 proposed budget is based on a foreign exchange rate of N379/$; and 3 per cent GDP growth projection for next year.

Nigerian President Muhammadu Buhari presenting the 2021 Appropriation Bill before the parliament on Oct. 8th, 2020

President Muhammadu Buhari, today, presented a proposed budget of N13.08 trillion for the 2021 fiscal year to a joint session of the National Assembly (NASS) in Abuja. The 2021 Appropriation Bill is 21 per cent (N2.27 trillion) higher than the N10.81 trillion revised budget for 2020.

Tagged, "Budget of Economic Recovery and Resilience," the budget proposal was presented amid significant global and domestic economic disruptions caused by the ongoing COVID-19 pandemic. In his budget speech, Buhari said the proposed fiscal plan provides a clear road map for Nigeria's post-COVID-19 economic recovery. He also said the 2021 budget was designed to further deliver on the goals of the Economic Sustainability Plan (ESP), the successor blueprint for the Economic Recovery and Growth Plan (ERGP).

According to Buhari, the components of the 2021 proposed budget include a non-debt recurrent expenditure of N5.65 trillion, compared to N5.82 trillion approved for 2020; and N3.85 trillion for capital expenditure, as against N2.69 trillion (capex) allocated for the current fiscal year.

Based on the estimated total revenue of N7.89 trillion, the government has projected a deficit of N5.20 trillion in 2021, representing 3.64 per cent of estimated gross domestic product (GDP). This is higher than the 2020 budget deficit of N4.98 trillion, which represents 3.57 per cent of GDP. Buhari said the proposed deficit for 2021 will be financed mainly by new borrowings totalling N4.28 trillion.

Statutory transfers to government agencies – including the National Assembly, National Judicial Commission, Niger-Delta Development Commission, INEC, Universal Basic Education, etc – are proposed to be N484.46 billion, while N3.12 trillion has been allocated for debt service next year.

The 2021 budget is based on crude oil benchmark price of $40 per barrel (pbl), compared to $28 pbl in the amended Appropriation Act 2020. Oil production for next year is estimated at 1.86 million barrels (mbpd) of oil per day, as against the revised estimate of 1.80 mbpd for 2020.

The 2021 proposed budget is also based on a foreign exchange rate of N379/$; and 3 per cent GDP growth projection for next year.

Buhari said the federal government will forward to the NASS the Finance Bill 2020 for passage into law, shortly after the budget presentation. The enactment of the legislation will support implementation of the 2021 budget.

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