FG spent 6.46 trillion won on debt service in 2020
According to Minister of Finance, Budget and National Planning Ms Zainab Ahmed, the federal government spent a total of $ 6.46 trillion on debt and worker servicing in 2020.
It also turned out that during the year the government allocated a total of N1.8 trillion for capital projects. He noted that of these, up to 118.37 billion N. were allocated for capital expenditures in connection with COVID-19.
Ahmed practically spoke during the presentation of the federal government-approved budget for 2021.
Providing an update on 2020 budget execution, the minister said that as of the end of 2020, revenues held by the federal government totaled $ 3.94 trillion. NE, which is 73% of the target.
He said the federal government’s share of oil revenues was $ 1.52 trillion. N.E., which is 157% of the results, compared to the prorated amount in the revised budget for 2020, while non-oil tax revenues were $ 1.28 trillion. 79% of the revised target.
As for the expenditure side, he said that $ 9.97 trillion was allocated. N.
Ahmed said: “Of these expenditures, $ 3.27 trillion. Trillion were for debt service and 3.19 trillion. Staff costs, including pensions.
“At the end of 2020, 1.80 trillion rubles were allocated for capital investments. Euro, which is about 89% of the volume of capital investments. “
According to him, the economy of Nigeria is becoming less dependent on oil, since the contribution of the oil sector to financing the budget for 2021 will be only 30%.
Ahmed said most of the funding sources for the 2021 budget, 70%, will come from the non-oil sector.
Presenting an overview of the picture of revenues for 2021, the minister said that the total revenue available to finance the budget for 2021 is projected at 7.99 trillion rubles, which is 36.9% higher than the 2020 forecast of 5.84 trillion rubles. … …
He noted that to ensure financial transparency, accountability and completeness, the financial statements of 60 state-owned enterprises were integrated into the federal government’s budget proposal for 2021.
Ahmed said: “In total, 30% of the expected revenues will come from oil-related sources and 70% should come from non-oil sources.
“So it shows that Nigeria’s economy is gradually becoming less dependent on oil. In general, the size of the budget was limited by our relatively low incomes ”.
However, Ahmed noted that by moving from contributions to the non-oil sector to financing national budgets, the economy was systematically moving away from heavy dependence on oil revenues.
It states that the total budget deficit for 2021 was 5.6 trillion. N, or 3.39% of gross domestic product.
The minister explained that the budget deficit will be financed mainly through loans, since 2.34 trillion. Tenge will be borrowed from internal and external sources, 709.69 billion NOK. Through multilateral and bilateral loans, and proceeds from privatization will provide N205. , 15 billion
In terms of spending structure, he said total spending for 2021, including state-owned enterprises and project-linked loans, is expected to be $ 13.59 trillion. N.E., which is 25.7% higher than the revised budget for 2020.
Ahmed said: “Recurrent (non-debt) spending, estimated at $ 5.99 trillion, represents 44.1% of total spending and is 13.3% higher than the revised estimates for 2020 (mainly reflecting salary increases and pensions).
“Total capital expenditures in the amount of N4.37 trillion. Make up 32.2% of total costs; and 62.9% more than the revised budget for 2020 (including the capital component of compulsory transfers, capital expenditure by the Government of England and project-related borrowing costs). “
The minister said that at the level of N3.32 trillion, debt service amounted to 24.5% of total expenditures and 12.6% above the revised budget for 2020.
He said the € 200bn reserve for callbacks to maturity bonds for local contractors / suppliers is 1.68% of total costs.
The base price of crude oil has been maintained at $ 40 per barrel in the 2021 budget, while crude oil production is expected to grow from 1.8 million barrels per day in 2020 to 1.86 million barrels per day. in 2021, with the economy recovering from recession and softened by OPEC + quota agreements.
“Although Nigeria has a total production capacity of 2.5 million barrels per day, the current crude oil production is about 1.7 million barrels per day, including about 300,000 barrels of condensate, indicating that the OPEC quota is being met.” – he said. Ahmed.
He said that oil GDP is expected to grow by 16.23% in 2021 compared to the same period last year, leading to an increase in non-oil GDP of about 1.1%, adding that based on this, real GDP should increase by 3%. in 2021
The minister also said that nominal GDP is expected to rise from NOK 139.52 trillion. In 2020 up to NOK 142.69 trillion. In 2021, and then to NOK 151.46 trillion.
“Likewise, consumer spending is projected to rise from NOK 117.91 trillion. In 2020, to 118.89 trillion. Nor. In 2021, which reflects a gradual economic recovery, ”Ahmed said.
He added: “Inflation is expected to remain above one digit in 2021, given structural issues affecting business costs, including high costs of food distribution.”
He also noted that improving the tax administration system to optimize government revenues was the main goal of the administration’s strategic initiatives to increase revenue.
Source: – Punch ng