President Muhammadu Buhari on Tuesday, September 8, 2019 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, said N556.7 billion was for statutory transfers, N4.88 trillion for non-debt recurrent expenditure and N2.14 trillion for capital expenditure. Debt service, according to the President, is estimated at N2.45 trillion while provision for Sinking Fund to retire maturing bonds issued to local contractors is N296 billion.
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.
Earlier, President of the Senate, Ahmad Lawan restated the commitment of members of the National Assembly to cooperate with the Executive on early budget passage. He informed that only this October is set aside for all government agencies to defend their 2020 budget estimates to enable the passage of the document in December. In his remarks during the presentation of the 2020 budget by President Muhammadu Buhari, Lawan said the National Assembly committees are ready to receive the Ministers and other Heads of Government Agencies for the defence of their budget estimates.
Sen. Lawan implored all Ministries, Departments and Agencies(MDAs) to appear before the Committees for the defence of their Budget estimates within the month of October in order for timely passage of the budget.
“We have earmarked the month of October to be the sole window for all Budget defense activities, this year, by all MDAs. In this regard, our Committees will be expected to conclude their work on Budget defense within October, this year. The subsequent necessary legislative work will be carried out in November and December, leading to eventual passage before the end of this year," he informed.
The Senate President said the 9th National Assembly has shown capacity, commitment and willingness to treat legislative matters that will impact on the lives of the citizens with dispatch and every sense of urgency. This, he said, was clearly demonstrated last week, when the Assembly received, processed and passed the request of Mr. President on the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Sen. Lawan gave assurance that the National Assembly will treat the 2020 Budget Estimates with the same commitment or even more. “In our effort to pass the Budget, we will also be guided by the legislative requirement of a thorough scrutiny," he said.
The Senate President, however warned that the budget estimates "will remain what they are, estimates, until we are able to generate and receive the necessary revenues to fund and foot the bills. “It is imperative therefore, that our revenue generating agencies be more alive to their responsibilities, more innovative and focused on how to meet their revenue targets."
He emphasized that the National Assembly will continue to review how the revenue generation, collection and remittance would be more effective and efficient. He added that there is need to review the laws establishing the agencies responsible with a view to enhancing their capacity and capability.
Meanwhile, the Speaker of the House of Representatives, Rt. Hon. Femi Gbajabiamila, in a vote of thanks during the Joint session commended President for the early presentation of the 2020 budget proposals to the legislature, he said the budget is significant in the sense that it will add value to the lives of the Nigeria citizens. He added that the socioeconomic lives of the people will be greatly affected by the budget which has been tagged “budget of fiscal consolidation”.