Highlights of FGN Budget Proposals for 2021 Fiscal Year

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Friday, October 09, 2020 / 08:33 AM / By KPMG Nigeria / Header Image Credit: Vanguard News

 

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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.

 

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