President Muhammadu Buhari on Tuesday presented a budget estimate of N10.33 trillion for the year 2020. He made the presentation 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.
This is the first time the president is presenting his budget this early in October since he became president in 2015.
If things go according to plan according to reports, the National Assembly is likely to finish work on the proposal and approve it by end of November or sometime in December.
This is a clear departure from what was obtainable in the past 16-20 years. And this is a phenomenon that was caused by both the executive and the legislature.
Meanwhile, the proposal has other details, some of them include, 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.
President Buhari in his presentation made other allocations accordingly, they are: 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.
Hear him “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.
The Peoples Democratic Party (PDP) has however criticised the budget. They challenged the President to make public what the allocation to the State House is. They made other useful interventions.
We hope therefore, that both the executive and the legislature will use the so-called “new working relationship” for the greater good of country.
There are gaps in our budget reality. There are funding and implementation gaps that have refused to fill over the years. Abandoned projects litter the country and poverty is still high.
We had expected that during the budget speech the President will highlight how many jobs or how many people will be pulled out of poverty as a result of the proposal. We also had expected that we will hear how many children will be returned to schools as a result of interventions in education.
This is the best way to appraise a money bill. All the same we wish the National Assembly fruitful deliberations. They must not sacrifice their oversight function on the altar of “cordial relationship” between them and the executive.