FG Proposed N9.12trn Budget for 2020 Fiscal Year

• FG Proposed N9.12trn Budget for 2020 Fiscal Year

The Federal Government on Wednesday proposed N9.12 trillion budget for the fiscal year 2020.

This was contained in the 2020-2022 Medium Time Expenditure Framework and Fiscal Strategy Paper forwarded to the National Assembly by President Muhammadu Buhari on Wednesday.

The proposed budget has a deficit of N2.28 trillion with projected revenue of N7.17 trillion.

It stated that the estimated N7.17 trillion revenue is expected from Value Added Tax and other national revenues sources.

The estimated revenue is N170.41 billion higher than the 2019 estimated revenue of N6.99 trillion.

The budget figure was higher than the N8.92 trillion estimated for the 2019 budget.

Also, the document noted that N34.2 percent of the projected funding for the 2020 budget would come from oil, while the remaining balance is expected from the non-oil sector.

The submitted document read, “Interest payment on debt is estimated at N0.45tn while provision for Sinking Fund to retire maturing bonds to local contractors at N296bn.

“The provisions for personnel cost and pension costs are estimated at N2.67tn and N586.72bn respectively.

“In addition, N40.17bn representing one per cent of the consolidated revenue fund, has been earmarked for the Basic Health Care Provision, N22.73bn for GAV/Routine Immunisation in the Service Wide Votes and N89.44bn for the power reform programme.”

It further explained that the sum of N1.01 trillion, excluding capital statutory transfers, is appropriated for ministries, departments and agencies as capital expenditure.

This, the documents explained, is also with the inclusion of capital in statutory transfers, capital supplementation, grants and donor funded projects, as well as multi-lateral/bilateral projects-tied loans of N328.13 billion and the capital expenditure amounting to N2.17 trillion.

It added, “With the inclusion of the planned expenditure of the top 10 GOES of N553.14bn, the proposed aggregate expenditure rises to an estimate of N10tn.

“With the inclusion of the GOEs capital estimated at N188.23bn, aggregate capital expenditure (inclusive of capital in statutory transfers) is estimated at N2.17tn.

“This represents 22 per cent of the aggregate projected Federal Government expenditure in 2020, which falls short of the 30 per cent target in the ERGP.

“This is the consequence of the slower growth in revenues than the rate of growth in non-discretionary recurrent expenditures, specifically debt service and personnel cost.

“Given the projected revenue and planned expenditure, the fiscal deficit is estimated at N1.95tn, about N33.61bn (1.8 per cent) more than the estimate of N1.92tn in 2019.

“This level of deficit is 1.37 per cent of GDP well below the threshold (3% of GDP) stipulated in the Fiscal Responsibility Act (FRA) 2007.

“In order to present a more comprehensive picture of the FGN’s fiscal operations, the revenues and expenditures of the top 10 GOEs as well as expenditures financed from project-tied loans will be captured in the FGN’s budget.

“Accordingly, the aggregate fiscal deficit for 2020 will be N228tn, which is 1.59 per cent of GDP, still within the three per cent threshold.”