FEC Approves N12.66trn Budget Proposal For 2021

The Federal Executive Council, FEC, yesterday approved a projected budget of N12.66 trillion for 2021 fiscal year.

The Minister of State, Budget and National Planning, Clement Agba, disclosed this while briefing State House correspondents at the end of the eighth virtual council meeting presided over by President Muhammadu Buhari at the Council Chamber, Presidential Villa, Abuja.

He said the council considered the 2021-2023 Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP.

According to him, the MTEF is based on $40 per barrel of crude oil, oil production of 1.6 barrel per day, an exchange rate of N370 to one dollar and inflation rate of 11.95 percent. The gross domestic growth is projected at three percent and revenue target of N7.50 trillion.

He said: “Yes, I spoke of the various assumptions that have been made in terms of parameters and those assumptions are what drives revenues that we get and in terms of how you are able to reflate the economy and help your Gross Domestic Product, GDP.

“For Nigeria, it was projected that by the end of this year, we should have the GDP top at -4.42 percent.

However, if the stimulus is 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, GOE.

“We are bringing them into the budget order to be able to shore up the budget by additional N2.17 trillion, 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.

“Is the plan for borrowing payment? Yes there is. Even in the 2020 budget, we had provisions to repay debt and in the 2021, there is provision to repay debt.

“There is a sinking fund, we look at the ratio and ensure that we are able to pay our debts. Of course, that is why we have the debt management office to run those numbers and advise us.”

(Vanguard)