The Federal Executive Council (FEC) has approved a budget estimate of N13.08trillikn for the 2021 fiscal year.
The fiscal document was approved at a meeting of the council on Wednesday presided over by President Muhammadu Buhari.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this to State House correspondents at the end of the meeting.
The minister said the budget proposal was predicated on $379 exchange rate, oil benchmark of $40 barrel per day and oil production volume of 1.86 million per day.
Ahmed explained that the total budget proposal for 2021 was to enable the country to attain a more inclusive growth and also to achieve the key objectives of government.
The objectives, she said, included stimulating the economy, creating jobs, enhancing growth, creating infrastructural investment and also promoting manufacturing and local production.
The minister said, “The budget assumptions that were presented to the council today include: one, crude oil price benchmark at $40 per barrel; two, oil production at 1.86 million barrels per day; three, exchange rate of N379 to $1; four, Gross Domestic Product growth target of three per cent; and five, inflation rate of 11.95 per cent.
“We do expect that Nigeria’s economy will recover to the path of growth early in 2021; so the total aggregate revenue that is projected for the 2021 budget is N7.89tn and what is unique about the 2021 budget is that we have brought in the budgets of 60 government-owned enterprises. If you recall, in 2020 we brought in 10, now we have brought in 60.
“These 60 exclude NNPC and the Central Bank and the reason being NNPC, a national oil company, internationally national oil companies are not included in the national budget.
“Also, the CBN is an autonomous body. Only those two are excluded, 60 government-owned enterprises included. That is to say their revenue and all categories of expenditure are now integrated in the budget.
“We have a total aggregate revenue of N7.89tn and also an aggregate expenditure of N13.08tn for 2021. There is a fiscal deficit of N4.49tn, this represents 3.64 per cent, slightly above what is required by the Fiscal Responsibility Act of three per cent and also to report that the total capital expenditure that is projected in the budget is 29 per cent of the aggregate expenditure.
“This is an improvement over the 24 per cent that we had in the 2020 budget, but slightly below the 30 per cent that we targeted in the economic recovery.”
Ahmed explained that the 1.86 million barrels per day crude oil production includes 400,000 condensates.
She said the country had complied with the OPEC quota, which is placed at about 1.5 million barrels per day.
She explained, “So, the 1.46 million is in meeting with the OPEC quota.
“This is important to us because as you report, if you just report the 1.86 million, some members of the OPEC appear to think that we are exceeding OPEC quota, whereas we are reporting oil and condensate.”
Ahmed said before she presented the proposal to the council, she also presented the performance of the 2020 budget up till July 2020.
She added, “The performance of the FGN budget as of July, for revenue, was 68 per cent. We had a 68 per cent revenue performance prorated to July.
“The performance of expenditure, on the other hand, was 92.3 per cent and that is to say salaries were fully paid; pensions were paid; debt service was made, as well as transfers classified as statutory.”
The Minister of State for Finance, Budget and National Planning, Clement Agba, explained the factors that led to the decision on the growth rate. One of it is a deficit of financing of N4.49tn.
Meanwhile, Director-General of the Budget Office, Ben Akabueze, put capital budget performance at 60 per cent.