President Muhammadu Buhari sent his proposal for the 2020 budget for Nigeria to a National Assembly joint session in Abuja on Wednesday.
The total expenditure proposed to the Federal Government in 2020 amounts to N10.33 trillion.
The proposal reveals that nearly one quarter of the amount (N2.45 trillion) will be expended on debt servicing, while capital spending is projected to gulp N2.14 trillion, excluding the capital portion of legal transfers.
A further breakdown provided by the president reveals that the calculation of expenditure includes legislative transfers of N556.7 billion, recurring non-debt spending of N4.88 trillion and allocation of N296 billion for the Sinking Fund to redeem maturing bonds issued to local contractors.
The budget was prepared on the assumption of $57 per barrel with 2.18 million barrels of crude oil production per day and the exchange rate of N305 to $1 was assumed.
Other assumptions include 2.93% real GDP growth though “inflation is expected to remain slightly above single digits in 2020.”
The President said the Appropriation Bill for 2020 was structured as a budget:
- Fiscal consolidation, to strengthen the 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 programs to further deepen their impact on those marginalised and most vulnerable Nigerians.
For consideration and enactment into law, the president also introduced a Finance Bill.
The amount of N8,155 trillion is estimated as the total revenue of the Federal Government in 2020 which includes N2.64 trillion oil revenue, N1.81 trillion non-oil tax revenue and other N3.7 trillion revenue. It, the president said, was 7% higher than the 2019 N7,594 trillion comparative figure.
He clarified that the rising share of non-oil revenues underlines, going forward, trust in the revenue diversification strategies of his administration.
“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,” Mr Buhari said.
The president said N556.7 billion was included in the budget for legal transfers, which is the first-line fee, and it includes:
- N125 billion for the National Assembly;
- N110 billion for the Judiciary;
- N37.83 billion for the North East Development Commission (NEDC);
- N44.5 billion for the Basic Health Care Provision Fund (BHCPF);
- N111.79 billion for the Universal Basic Education Commission (UBEC); and
- N80.88 billion for the Niger Delta Development Commission (NDDC), which is now supervised by the Ministry of Niger Delta Affairs.
Mr Buhari announced that the National Human Rights Commission’s budget allocation would be increased from N1.5 billion to N2.5 billion. This 67% increase in funding is being done to enable the Commission to more effectively perform its functions, he said.
The non-debt recurrent expenditure includes 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.
Overhead costs are projected at N426.6 billion in 2020. He said additional provisions were made only for the newly created ministries.
In his closing remarks, the House of Representative’s Speaker, Femi Gbajabiamila, pledged prompt consideration of the budget and a friendly relationship between the National Assembly and the presidency.