Finance Minister Zainab Ahmed’s 2021 Budget Breakdown

13 Jan Finance Minister Zainab Ahmed’s 2021 Budget Breakdown

Minister of finance, budget and national planning, Zainab Ahmed, yesterday made a virtual presentation of the 2021 budget breakdown in Abuja.

Noting that “overall, the size of the budget has been constrained by our relatively low revenues,” she promised the budget will be impactful.

Major highlights of the budget showed aggregate revenue available to fund the year’s budget is projected at N7.99 trillion (36.9% higher than the 2020 projection of N5.84 trillion); to promote fiscal transparency, accountability, and comprehensiveness, the budgets of 60 Government-Owned Enterprises (GOEs) are integrated in the FGN’s 2021 Budget proposal.

* Some of the sources government hopes to finance the 2021 budget include share of oil revenue; taxes; NLNG Dividend;   minerals and mining ; and non-oil N1, 488,924,372,031.

*Aggregate expenditure, inclusive of government owned enterprises (GOEs) and project-tied loans is projected to be N13.08 trillion.

* Recurrent (non-debt) spending, estimated to amount to N5.93 trillion, is 43.19 per cent of total expenditure, and 14.32 per cent higher than 2020 revised estimates (reflecting increases in salaries & pensions).

* Aggregate Capital Expenditure of N3.85 trillion is 29.43 per cent of total expenditure.

*Debt service to gulp N3.12 trillion or 23.88 per cent of total expenditure

* Provision of N220 billion is 1.68 per cent of total expenditure was made to retire maturing bonds to local contractors/suppliers.

* Overall budget deficit is N5.196 trillion for 2021, representing 3.64 per cent of GDP and is to be financed mainly by borrowings at a ratio of 50 per cent domestic and 50 per cent foreign.

*Multi-lateral/bi-lateral loan drawdowns would account for N709.69 billion; while privatisation proceeds are expected to yield N205.15 billion.

* Dormant accounts and unclaimed dividend to be borrowed by government during the year would be repaid from the Special Trust Fund to be set up by the federal government, once owners were properly identified.

*On 2020 budget, N1.8 trillion has so far been spent on capital projects and that the implementation of the capital budget would continue until March 31, 2021.

* Government would have surpassed the N3.94trnit generated in the 2020 fiscal year but for the N4. 691 trillion tax waivers it granted to citizens and companies to cushion the effects of Covid-10 pandemic in the economy; assessing existing tax waivers to some organisations/ companies.

* The Minister of Health and his team were still working on the details of what covid-19 vaccines would cost the nation but that once that was finalised, a supplementary budget would be presented to the National Assembly, for the approval funds.

* Although she declared that subsidy has finally been eliminated in the petroleum sector, that there had been accumulated subsidies in the electricity sector and provisions were made for market players in the current budget to clear part of the arrears which would be finally wiped out in 2022.

* The rate of increase in inflation is expected to decelerate, which means higher inflation at a slower rate.