The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said that the Federal Government had plans to spend about N9.78 trillion in the 2020 fiscal period.
She spoke on Tuesday in Abuja during the unveiling of the draft of 2020-2022 Medium Term Fiscal Framework and Fiscal Strategy Paper.
The N9.7 trillion budget proposal for 2020 showed a reduction of N360 billion from the N10.06 trillion that was budgeted in 2019.
The minister at the event pointed out, that medium-term fiscal challenges in Nigeria, chiefly in the area of revenue generation, had remained an issue of concern.
She added that the continuous increase in personnel costs is an area of concern for the government.
According to the minister, “Oil production volume is projected at average 2.18mbpd for 2020.”
She said that though “this is lower than the projected oil production volume of 2.3mbps for 2019, we believe that this is a more realistic projection. For 2021 and 2022, the projections are 2.22mbpd and 2.36mbps, respectively.”
On the reason for the cut in oil price benchmark, she said, “A lower oil price benchmark of $55 per barrel is assumed considering the expected oil glut in 2020 as well as the need to cushion against unexpected price shock.”
Ahmed went further to say that the trio of the major forecasters, the Organisation of Petroleum Exporting Countries (OPEC), the International Energy Association and the United States Energy Information Administration, had predicted that non-OPEC countries would grow oil production by about two million barrel this year and produce even more next year.
She gave a breakdown of the expenditure as follows:
-Statutory transfer – to gulp N526.45 billion next year, up from N502.05 billion in 2019.
-Debt service and recurrent (non-debt) to consume N2.45 trillion and N4.7 trillion, respectively in 2020, up from N2.14 trillion and N4.38 trillion in 2019.
-Capital expenditure, a drop of about N1.13 trillion from N3.18 trillion this year to N2.05 trillion next year.
On source for the revenue to fund the budget, she said about N7.6 trillion would be raised from oil and non-oil sources.
A breakdown of this amount revealed that the sum of N2.36 trillion would come from oil; N124.2 billion from the NLNG dividend; N1.55 trillion from taxes; and N849.9 billion expected to be generated from independent revenue sources.
Also, about N300 billion is being projected to come from special levies; N237 billion from domestic recoveries; N200 billion from stamp duty and N125.48 billion from exchange rate differentials.
She also said that the Federal Government would commence from this month, the recovering of N614 billion bailout, it gave to state governments to pay salaries.
“The recovery process for us is to deduct from the FAAC allocation to the states and then we will remit to the CBN. We are going to start this remittance by the next FAAC,” she said.
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