The Federal Executive Council (FEC), on Wednesday, projected N12.66 trillion budget for each of three consecutive fiscal years with the approval of the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
The Minister of State, Budget and National Planning, Clement Agba, disclosed this to State House reporters after the eighth virtual FEC meeting chaired by President Muhammadu Buhari.
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Agba mentioned other projections in the budget as $40 per barrel oil benchmark, oil production volume of 1.6 million barrel per day, the inflation rate of 11.9 percent, projected gross domestic growth rate of three percent and revenue target of N7.50 trillion.
The minister, who said the GDP projection was expected to cruise at -4.42 percent and later improve to about -1.8 percent later at the end of 2020 fiscal year, said the revenue target for 2021 was projected to rise to N7.50 trillion in 2021 from N5.84 trillion target for 2020 budget.
He said though the projected oil production volume was lower when compared to the earlier projection in 2020 budget as a result of the Organisation of Petroleum Export Countries restriction quota, 63 government-owned enterprises had been brought in “to get prices at par.”
According to him, the GOEs have been drafted to raise another N2.17 trillion to fund the budget, adding that despite the N7.50 trillion budget projection for 2021 and the projected additional N2.17trillion to be driven by the GOEs, the figures would eventually match the N12.66 trillion budget projection.
Borrowing and repayment
The minister, who said the budget deficit would be funded by a borrowing and repayment plan as well as sinking funds, added that the Debt Management Office (DMO) has the responsibility to properly guide the federal government on borrowing.
He said: “On projected revenue for 2021, yes I spoke of the various assumptions that have been made in terms of parameters, and those assumptions are what drive revenues that we get and in terms of how you are able to reflate the economy and spend helps your GDP.
“For Nigeria, it was projected that by the end of this year we should have the GDP top at -4.42 percent.
“However, with the stimulus,if properly done and executed, we expect that the GDP will improve to about negative -1.8 percent.
“So, in terms of the revenue projection, for 2020 it was N5.84 trillion but for 2021 we expect that it will be N7.50 trillion.
“Even though the oil production is much lower than our capacity because we are restricted by the OPEC Plus quota in order to get the prices at par, we have brought in 63 Government-Owned Enterprises.
“We are bringing them into the budget order to be able to shore up the budget by additional N2.17 trillion into the budget, hence we are saying we are projecting a larger budget size for 2021 over and above the N10.84 trillion for the revised 2020 budget.
“When you look at the N7.5 trillion and the expectations to spend N12 trillion, yes definitely there will be gap and that gap has to be financed.”
