His Excellency, the President of the Federal Republic of Nigeria, Muhammadu Buhari, GCFR, today 8 October 2020, presented the 2021 Federal Government Budget Proposals before a joint sitting of the National Assembly. The proposed Revenue and Expenditure budgets for 2021 are N8.43 trillion and N13.08 trillion, respectively, resulting in N4.65 trillion fiscal deficit.
Below are the key assumptions behind the budget and movements in the proposed fiscal parameters between the revised 2020 and 2021 Budgets:
|Budget Assumption/ Fiscal Parameter||2020 Approved Budget||2020 Revised Budget||2021 Proposed Budget||Percentage change|
|Benchmark oil price||US$57 per barrel||US$28 per barrel||US$40 per barrel||43%|
|Oil production volume (bpd)||2.18 million||1.80 million||1.86 million||3%|
|Inflation Rate (%)||10.81||14||11.95||-15%|
|Average exchange rate||N305/ US$1||N360/ US$1||N379/ US$1||5%|
|GDP growth rate (%)||2.93||-4.42||3||168%|
|Capital expenditure||N2.47 trillion||N2.69 trillion||N3.85 trillion||43%|
|Statutory transfer||N0.56 trillion||N0.43 trillion||N0.48 trillion||13%|
|Debt service||N2.43 trillion||N2.68 trillion||N3.12 trillion||16%|
|Recurrent expenditure (non-debt)||N4.49 trillion||N4.94 trillion||N5.65 trillion||14%|
|Total revenue||N8.42 trillion||N5.84 trillion||N8.43 trillion||44%|
|Total expenditure||N10.59 trillion||N10.81 trillion||N13.08 trillion||21%|
|Fiscal deficit||N2.17 trillion||N4.98 trillion||N4.65 trillion||-7%|
Source: Ministry of Budget and National Planning; 2020 Appropriation Act
The 2021 Budget, which has been themed the “Budget of Economic Recovery and Resilience”, is designed to deliver on the Government’s Economic Sustainability Plan goals, accelerate the pace of Nigeria’s economic recovery, promote economic diversification, enhance competitiveness and ensure social inclusion.
The President used the opportunity of the 2021 Budget presentation to announce the preparation of the Finance Bill, 2020 by the Honourable Minister of Finance, Budget and National Planning for passage with the 2021 Appropriation Bill. The Finance Bill, 2020 will seek to support the realization of the 2021 revenue projections, adopt appropriate counter-cyclical fiscal policies and enhance the efficiency of fiscal incentives.