2020 Budget: Buhari proposes N2.8trn deficit, to spend N10.33trn

.Allocates N262bn to Works & Housing; Power – N127bn; Transport – N123bn, Defence – N100bn, Agric N83bn

. APC confident of early passage of budget .Budget will further impoverish Nigerians – PDP

Nigeria once again will run a deficit budget of N2.8 trillion in the 2020 fiscal year. This was as President Muhammadu Buhari said the nation’s total expenditure for the year will be N10.33 trillion.

Presenting the 2020 Appropriation Bill tagged ‘Budget of Sustaining Growth and Job Creation’ to a joint session of the National Assembly on Tuesday, the President put the total revenue for the year at N8.155 trillion.

He said from the N8.155 trillion revenues, Oil sector will rake in N2.64 trillion; Non-oil sector – N1.81 trillion, others – N3.7 trillion.

Government also proposed increase of Value Added Tax (VAT) from 5% to 7.5% while the President said the 2020 budget based on new VAT rate increased revenues will be used to fund education, health and infrastructure, adding that VAT Act already exempts Pharmaceutical, Educational items and basic commodities with a promise to expand the exemptions.

Buhari added that his government will raise the threshold for VAT registration to N25m turnover per annum, to bring relief to small(est) businesses.

He said N2.46 trillion is proposed for capital projects and main emphasis will be on the completion of as many ongoing projects as possible, instead of starting new ones.

In the budget, infrastructure Tax Credit Scheme got prominent mention. Buhari said PPP Scheme launched in January 2019, which in its ongoing Phase 1 has already attracted N200 billion in private capital into reconstruction of 800km of federal Roads, across all 6 geopolitical zones.

He said government will give priority to Single Customs Window for 2020, while PIB also a priority.

“I seek your support in passing into law two Executive PIBs I will be forwarding to you shortly” and also said “the Deep Offshore Act Amendment Bill 2018 was submitted to 8th Assembly in June 2018, but not passed. I will be re-forwarding shortly, to the 9th Assembly. I seek the support of the National Assembly in passing into law two Executive PIBs I will be forwarding shortly”

Buhari said he had directed the stoppage of salaries for any Nigerian government staff not captured in the Integrated Payroll and Personnel Information System (IPPIS) by end of October 2019.

Ministry of Works and Housing got lion allocation of N262 billion; Power – N127 billion; Transportation- N123 billion; Universal Basic Education Commission – N112 billion; Defence – N100 billion; Zonal Intervention Projects – N100 billion; Agriculture and Rural Development – N83 billion; Water Resources – N82 billion; Niger Delta Development Commission – N81 billion; Education – N48 billion; Health – N46 billion; Industry, Trade and Investment – N40 billion; North East Development Commission – N38 billion; and Interior – N35 billion.

Others are Social Investment Programmes – N30 billion; Federal Capital Territory – N28 billion; and Niger Delta Affairs Ministry – N24 billion.

The 2020 Appropriation, according to the president, was designed to be a budget of: Fiscal consolidation, to strengthen our macroeconomic environment; Investing in critical infrastructure, human capital development and enabling institutions, especially in key job creating sectors; Incentivising private sector investment essential to complement the Government’s development plans, policies and programmes; and Enhancing social investment programmes to further deepen their impact on those marginalised and most vulnerable Nigerians.

He said the government adopted the parameter assumptions of the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

He said: “We have adopted a conservative oil price benchmark of US$57 per barrel, daily oil production estimate of 2.18 mbpd and an exchange rate of N305 per US Dollar for 2020.

“We expect enhanced real GDP growth of 2.93% in 2020, driven largely by non-oil output, as economic diversification accelerates, and the enabling business environment improves. However, inflation is expected to remain slightly above single digits in 2020.

He concluded that the goal of his government is for the 2020 Appropriation Act to come into effect on January 1, 2020.

Reviewing the performance of his government in the running 2019 budget, the President said the nation’s Gross Domestic Product has grown from 1.93 percent in 2018 to 2.02 percent in the first half of 2019.

He added that inflation reduced from peak of 18% in January 2017 to 11% by August 2019 while external reserves increased from $23bn in October 2016 to $42bn in September 2019, adding that Capital importation rose from $12bn in first quarter of 2018 to $14bn in first quarter of 2019.

“As at June 2019, Federal Government’s actual aggregate revenue (excluding Government-Owned Enterprises) was N2.04 trillion. This revenue performance is only 58 percent of the 2019 Budget’s target due to the underperformance of both oil and non-oil revenue sources. Specifically, oil revenues were below target by 49 percent as at June 2019. This reflects the lower-than-projected oil production, deductions for cost under-recovery on supply of premium motor spirit (PMS), as well as higher expenditures on pipeline security/maintenance and Frontier exploration”, he said.

Meanwhile, the All Progressives Congress (APC) has welcomed the commitment of both the executive and legislative arms to ensure budget passage is returned to January-December cycle.

To put this into effect, the party noted that the early presentation by the President, leaves the lawmakers near three months to consider and pass the budget.

The party in a statement by its National Publicity Secretary, Mallam Lanre Issa- Onilu, congratulated the President and all APC members on the early presentation of the proposed 2020 Budget of a record N10.33 trillion naira which surpasses the N8.916 trillion budgeted for 2019.

The party said: “The proposed 2020 budget is targeted at consolidating on the gains the current administration has made in revamping our power, rail and road infrastructure; diversification and retooling the economy; social intervention programmes targeted at the poor; fight against emerging crimes, insurgency and rehabilitation, rebuilding of the North East particularly through the newly-established North East Development Commission, among other critical interventions.

“According to the President in his budget speech, tagged “Budget of sustaining growth and job creation”, there is a renewed government’s commitment to plugging revenue leakage with the continued strict implementation of the Treasury Single Account (TSA).

“We congratulate the leaders of the two chambers of the 9th National Assembly, Senate President, Ahmed Lawan and Speaker of the House of Representatives, Rt. Hon. Femi Gbajabiamila, for creating a convivial environment for the budget presentation exercise, a welcomed departure from the usual tensed and adversarial atmosphere of the previous four years”.

The APC was confident that the patriotic disposition of the leaders and members of the 9th National Assembly would ensure a cordial relationship with the executive arm, which would surely translate to good governance and proper implementation of the administration’s Next Level plans for Nigerians.

However, reacting to the 2020 budget presented by President Buhari, the Peoples Democratic Party (PDP) lamented that the N10.7 trillion 2020 budget presented will further impoverish Nigerians and mortgage the future of the nation.

The party urged the legislature to redirect the fiscal proposal to serve the interest of majority of Nigerians.

The party noted that the core of the budget “remains hazy, showing streaks of padding, fraudulent duplications, replete with false performance indices, deceptive projections and inexplicable expenditure assertions which create openings for continued looting of our national patrimony by leaders of the All Progressives Congress (APC) and persons close to the Presidency.”

In the reaction signed by party’s spokesperson, Kola Ologbondiyan, the PDP insisted that it is inexcusable that despite the huge natural resources at President Buhari’s reach, he articulated a N10.7 trillion budget that is completely lacking in concrete wealth creation strategy but relies on further squeezing of Nigerians through excruciating taxes, levies and agonizing tolls.

The party described as unacceptable that the budget is skewed to serve the interest of the opulent, as projects that have direct bearing on the wellbeing of the masses were not substantially accommodated in the overall expenditure profile.

The PDP said such cannot happen under the Atiku Abubakar economic recovery blueprint for which Nigerians voted massively the PDP in the 2019 Presidential election.

The party also criticised the Buhari administration for not being transparent in the mammoth allocations for alleged vague projects, particularly the ministries of works and housing as well as transportation, where allegations of diversion of public funds were endemic in the last budget.

“Standing with millions of Nigerian youths and women, our party rejects the paltry budgets of N48 billion for education and N46 billion for health and urges the National Assembly to review the allocations in the interest of Nigerians.

“Furthermore, the PDP notes, as unacceptable that President Buhari, in his budget speech, could not give account of his handling of the 2019 budget and had to resort to lame excuses and unsupported figures, particularly on the various unimplemented subheads in critical sectors of the economy.

“Moreover, Mr. President failed to explain why his administration has remained hugely corrupt and how his Presidency depleted our foreign reserves to an all-time low $41,852 billion, accumulated huge foreign and domestic debts and kept the naira at its knees at about N360 to $1USD under his watch.

” The party also challenged the Presidency to make public the details of the Presidency allocation for Nigerians to see the billion being spent to finance the opulent lifestyle of the Buhari Presidency, despite Mr. President’s claims of prudence and sacrifice”, said the party.