February 9, 2025
Business News

2020 budget: FG targets N8.155trn revenue, proposes N512bn for power, roads, housing

The Federal Government of Nigeria through President Muhammadu Buhari, on Tuesday, has presented an expenditure framework (2020 Budget) of N10.33 trillion and N8.155 trillion revenue to the joint session of the National Assembly for the approval.

The Federal Government adopted a conservative oil price benchmark of US$57 per barrel, daily oil production of an estimate of 2.18 mbpd and an exchange rate of N305/$ for 2020 and 2.93 per cent GDP growth of 2.93 per cent driven largely by non-oil output, as economic diversification accelerates, and the enabling business environment improves while inflation is expected to remain slightly above single digits.

Breakdown of the revenue, the proposed N8.155 trillion revenue comprises oil revenue N2.64 trillion, 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 are 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 per cent increase.

Breakdown of allocation for capital expenditure showed that the 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.

According to him, the sum of N2.18 trillion debt service (representing 1.52 per cent of estimated GDP) including drawdowns on project-tied loans and the related capital expenditure for the 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.

2020 FISCAL YEAR: BUHARI TO PRESENT N11TR BUDGET TO NATIONAL ASSEMBLY TODAY

“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 the 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

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 per cent in 2017 to 1.93 per cent 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.

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