2020 revised budget: FG raises debt servicing to N3trn
As part of moves to realign the 2020 budget with current realities, the Federal Government has jerked up some components of its revised Appropriation Act while also reducing other aspects.
According to a document seen by Daily Sun, the sum of N2.951 trillion has been set aside for debt servicing, with a total of N4. 928 trillion now being earmarked for recurrent (Non-Debt Expenditure), while the sum of N2.230 trillion is for capital expenditure.
The total budget has also been reduced by N85 billion as the Federal Government is now seeking for the approval of N10.509 trillion, as against its earlier N10.594 trillion.
Consequently, aggregate revenue available to fund the 2020 budget is now projected at N5.09 trillion (35% or N2.78 trillion less than 2020 budget passed by the National Assembly).
Out of this amount, about 26per cent is projected to come from oil related sources, while the balance is to be earned from non-oil sources. The provision from Stamp Duty was reduced to N200 billion from N463.95 billion, while Signature Bonus is now down to N350.52 billion from N939.30 billion.
With the retained revenues of the ten major Government-Owned Enterprises (GOES), the aggregate Federal Government revenue is projected at N5.56 trillion.
The 2020 Appropriation Act (Amendment) Bill is now predicated on oil production of 1.93 million barrels per day and a benchmark oil price of $35 dollar per barrel.
The official exchange rate has also been adjusted upwards to N360/ $1 by the Central Bank of Nigeria (CBN). At the Importers and Exporters Foreign Exchange (IEFX) window, where the bulk of foreign exchange transactions are consummated, the exchange rate recently depreciated from about N360/ US$1 in January, 2020 to over N385/US$1.
In the earlier 2020 Budget, oil production was put at 2.18 million barrels per day at a benchmark oil price of $57 dollar per barrel and an exchange rate of £305 to a dollar.
According to the document, the Federal Government is expected to lose about $26 billion from oil revenues. Oil is Nigeria’s major source of revenue used in funding the budget.
Meanwhile, President of the Senate, Ahmad Lawan, has given three Senate Committees- Local and Foreign Debt; Finance; and Appropriation a five-day ultimatum to submit their reports to enable the upper legislative chamber pass President Muhammadu Buhari’s $5.513 billion loan request and the 2020 revised budget.
Lawan gave the order on Tuesday when he read two letters from President Buhari. By Lawan’s directive, the relevant Committees are expected to work on the documents on Friday and Monday.
The Senate Committees will bypass a serious scrutiny of the documents and may not hold public hearings, where representatives of the various Ministries, Departments and Agencies (MDAs) will come for a defence.
Similarly, State Governments who are expected to benefit from the loan request, may not send representatives to make any defence since the Senate placed a ban on public hearing.