President Muhammadu Buhari on Tuesday presented a budget estimate of N10.33 trillion for the year 2020 to a joint session of the National Assembly.
The President, while giving a breakdown of the budget estimates, explained that Debt service is estimated at N2.45 trillion while provision for Sinking Fund to retire maturing bonds issued to local contractors is N296 billion.
According to him, N556.7 billion was for statutory transfers, N4.88 trillion for non-debt recurrent expenditure and N2.14 trillion for capital expenditure.
In his presentation, President Buhari said the sum of N125 billion was budgeted for the National Assembly out of N556.7 billion provided for as statutory transfer; N110 billion for the Judiciary; N37.83 billion for the North East Development Commission (NEDC); N44.5 billion for the Basic Health Care Provision Fund (BHCPF); N111.79 billion for the Universal Basic Education Commission (UBEC); and N80.88 billion for the Niger Delta Development Commission (NDDC), which is now supervised by the Ministry of Niger Delta Affairs.
He added that the budgetary allocation to the National Human Rights Commission was raised from N1.5 billion to N2.5 billion.
This, the President noted, represents 67 percent increase in funding to enable the Commission performs its functions more effectively.
On recurrent expenditure, President Buhari gave non-debt recurrent expenditure as N3.6 trillion for personnel and pension costs, an increase of N620.28 billion over 2019.
According to him, the “increase reflects the new minimum wage as well as our proposals to improve remuneration and welfare of our Police and Armed Forces.”
He disclosed that the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) set out the parameters for the 2020 Budget.
“We have adopted a conservative oil price benchmark of US$57 per barrel, daily oil production estimate of 2.18 mbpd and an exchange rate of N305 per US Dollar for 2020.
“We expect enhanced real GDP growth of 2.93% in 2020, driven largely by non-oil output, as economic diversification accelerates, and the enabling business environment improves. However, inflation is expected to remain slightly above single digits in 2020,” he added.
President Buhari said a draft Finance Bill, which accompanied the 2020 budget, proposes an increase of the VAT rate from 5% to 7.5%.
According to him, the 2020 Appropriation Bill is based on the new VAT rate with additional revenues used to fund health, education and infrastructure programmes.
He, however, said that States and Local Governments were allocated 85% of all VAT revenues.
Some of the key capital spending allocations in the 2020 Budget include: Works and Housing: N262 billion; Power: N127 billion; Transportation: N123 billion; Universal Basic Education Commission: N112 billion; Defence: N100 billion; Zonal Intervention Projects: N100 billion; Agriculture and Rural Development: N83 billion;
Others are: Water Resources: N82 billion; Niger Delta Development Commission: N81 billion; Education: N48 billion; Health, N46 billion; Industry, Trade and Investment: N40 billion; North East Development Commission: N38 billion; Interior: N35 billion; Social Investment Programmes: N30 billion; Federal Capital Territory: N28 billion; and Niger Delta Affairs Ministry: N24 billion.
