The Federal Government on Tuesday presented the medium term expenditure framework and fiscal strategy paper (MTEF/FSP) where it proposed a total budget of N9.78trn for 2020.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, who made the presentation also proposed a budget of N10.1trn for 2021 and N10.4trn for 2022.
The crude oil benchmark for 2019 budget is put at $60pb whilst for 2020-2022 is reduced to $55pb with the oil production benchmark put at 2.18m barrels per day.
Mrs. Zainab Ahmed also noted that “the 2020 to 2022 fiscal years will be very challenging with respect to revenue generation and rapid growth in personnel costs” thus, the states would be adversely impacted.
The minister said “oil revenue is projected to decline from N3.688trn in 2019 to N2.367trn in 2020. This is due to lower production and lower oil prices” she said. But she however noted that FG will get more dividends from NLNG of up to about three folds. She also tipped non-oil revenue to grow marginally. Non-oil revenue is also increasing the N1.409trn in 2012, to over N1.55trn in 2020 she said.
Speaking on the government borrowing, she said that hasn’t waned and the FG hasn’t hit the red flags. “New borrowing is put at N1.605trn for 2019, projected at N1.7trn for 2020, N1.6trn for 2021 and N1.3trn for 2020.
The borrowings will be 50 percent local and 50 percent foreign” she said. Based on the borrowings, she confirmed the debt servicing obligations have also risen significantly.
The minister said all ministries, departments and agencies not on the Integrated Payroll and Personnel Information System (IPPIS) will not get paid as from October 2019 until they are able to do so.
On 2019 capital expenditure she said “the aggregate capital expenditure in 2019 was N3.187trn but in 2020, it has been lowered to N2.05trn and the next years, the pattern will be the same thing.”
She said the total fiscal deficit for 2019 is N2.474trn, in 2020 it will reduce to N2.154trn. The deficit to GDP is 1.77 percent in 2019.