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Buhari Presents N10.33trn Budget for 2020

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  • Buhari Presents N10.33trn Budget for 2020

President Muhammadu Buhari on Tuesday presented N10.33 trillion ($33.8 billion) budget for 2020 to the National Assembly.

The proposed budget tagged ‘Budget of Sustaining Growth and Job Creation’ is N1.4 trillion higher than the N8.91 trillion approved by the National Assembly for the 2019 fiscal year.

The Ministry of Works and Housing received the highest allocation of N262 billion, the highest of all the ministries.

Power, Transportation and Defence followed with N123 billion, N112 billion and N100 billion, respectively.

Education was allocated N48 billion while Health would receive N46 billion.

Buhari said: “An aggregate sum of N2.46tn (inclusive of N318.06bn in statutory transfers) is proposed for capital projects in 2020.

“Although the 2020 capital budget is N721.33bn (or 23 per cent) lower than the 2019 budget provision of N3.18tn, it is still higher than the actual and projected capital expenditure outturns for both the 2018 and 2019 fiscal years, respectively.”

According to him, at 24 per cent of aggregate projected expenditure, the 2020 provision falls short of the 30 per cent target in the Economic Recovery and Growth Plan 2017-2020.

“The main emphasis will be the completion of as many ongoing projects as possible, rather than commencing new ones. The MDAs have not been allowed to admit new projects into their capital budget for 2020, unless adequate provision has been made for the completion of all ongoing projects,” the president stated.

President said, “Although government’s actual spending has reduced, our plans to leverage private sector funding through our tax credit schemes will ensure our capital programmes are sustained.

“For example, we launched the Road Infrastructure Tax Credit Scheme, pursuant to which I have approved the construction and rehabilitation of 19 roads and bridges of 794.4km across 11 states. Indeed, the scheme has attracted private investment of over N205bn and the first set of tax credits are being processed by the Federal Ministry of Finance, Budget and National Planning.

“Under the Presidential Power Initiative, we will modernise the national grid in three phases; starting from five gigawatts to 7GW, then to 11GW by 2023, and finally 25GW afterwards in collaboration with the German Government and Siemens.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market.

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Economy

NNPC Spends N101.65bn on Petrol Subsidy in Q1 2020

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FG Spends Petrol N101.65bn on Petrol Subsidy in the First Quarter

The Nigerian National Petroleum Corporation (NNPC) said it spent N101.65 billion on petrol subsidy in the first three months of the year.

In its latest Monthly Financial and Operations report released in the month of March, the corporation described the spending as under-recovery.

A break down shows N43.31 billion was spent in January while N20.68 billion and N37.66 billion were spent in February and March respectively.

The amount was spent before the Federal Government halted subsidy following the decline in global oil prices due to the COVID-19 pandemic.

Speaking on subsidy, the former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, said “There is no need for subsidy again because they are using it to make unnecessary demands and this is the corruption that we are talking about. They are also using it to finance corruption too.

“The money that they would have used for other sectors or even send to FAAC is being used for subsidy and we cannot actually quantify its impact on the masses; rather, it is used to enrich a very few.”

Nzekwe urged the PPPRA to ensure subsidy does not return and encouraged the government to liberalise the downstream oil sector in order to allow other marketers to participate in fuel importation.

He said, “The NNPC should not be the only one importing petrol. The downstream sector must not continue like this. Other players should be allowed to play in the space too. The sector should be fully liberalised.

“And it is because the NNPC is the only one importing and almost running everything that makes it simple for it to say whatever it wanted as expenses on subsidy or under-recovery. This should not continue.”

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Oil Prices Decline on Rising COVID-19 Cases

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Global Oil Prices Dipped on Friday as New COVID-19 Cases Jump Globally

Global oil prices decline on Friday as the number of confirmed COVID-19 cases surged across the world.

Brent crude oil, against which Nigerian oil is priced, declined from $43.47 per barrel it traded on Thursday during the Asian trading session to $41.60 per barrel on Friday at around 11:39 am Nigerian time.

global Oil prices While the price of US West Texas Intermediate (WTI) crude oil dipped from $40.97 per barrel it traded on Thursday to $38.78 on Friday.

Oil traders and investors are worried that the rising number of COVID-19 new cases would disrupt demand for the commodity and force refineries to shut down once again.

“I do not suspect many oil traders will be looking to place significant bids in the market today, suggesting prices may continue to wallow into the weekend,” said Stephen Innes, chief global markets strategist at AxiCorp.

Despite efforts by both OPEC plus and other top oil producers to halt falling oil prices and reduce global oil glut, the lack of a cure for COVID-19 remained global concerns.

As previously stated on this platform, until a cure is found the world would have to find a way to either work through COVID-19 or shut down activities completely.

This is coming a day after the Federal Government of Nigeria announced that it was putting school resumption plan on hold following the latest COVID-19 report that shows Nigeria’s confirmed cases crossed 30,000 on Wednesday.

In the United States, more than 60,000 new COVID-19 cases were reported on Thursday, forcing lawmakers to start contemplating the second phase of COVID-19 lockdown.

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Economy

We Are Losing N13.9bn Monthly Because FG Caps Tariff – Discos

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Discos Says it is Losing N14bn Monthly Because of NERC Capped Tariff

The Nigerian power Distribution Companies (Discos) have said they a losing N13.9 billion in revenue every month because the Nigerian Electricity Regulatory Commission, limited how much they can charge for consumption.

Ernest Mupwaya, the Managing Director, Abuja Electricity Distribution Company, made the statement during a presentation on behalf of the Discos to the House of Representatives Committee on Power.

The statement was after the Discos demanded realistic indices before the implementation of the proposed service reflective tariff, which was supposed to be implemented on July 1.

Mupwaya said there were some outstanding requirements before the service reflective tariff could be implemented.

“One of them is the removal of estimated billing caps. The financial impact of the Capping Order is an average loss of N13.9bn monthly, thereby, undermining or jeopardising the minimum remittance requirement,” Mupwaya stated.

The July 1 service tariff implementation was halted by members of the National Assembly, who prevailed on the Discos to shelve the date to the first quarter of 2021 due to the current economic challenges in Nigeria.

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