Nigerian Govt. Approves $34bn 2021 Budget

By Abel Ejikeme

Nigerian Govt. Approves $34bn 2021 BudgetNigeria’s Federal Executive Council (FEC) has approved a proposed N13.08 trillion (about $34bn) aggregate expenditure cost for the 2021 fiscal year. The council also estimated a revenue projection of N7.89 trillion (about $2.5bn) as a key component of the 2021 budget.

This was contained in the 2021 budget proposal presented to the council on Wednesday by the country’s Minister of Finance, Budget, and National Planning, Zainab Ahmed. The council was presided over by Nigeria’s President Muhammadu Buhari.

The budget estimate is predicated on an oil benchmark price of $40 per barrel, with daily oil production of 1.8 million barrels per day and an exchange rate of N379 to $1.

The minister told reporters after the council meeting that the budget proposal will enable the government attain its key objectives on stimulating the economy for growth and infrastructure development.

Ahmed said the fiscal document has integrated the budget of sixty government-owned enterprises except for the country’s state-owned oil company and the Central Bank.

The government says it expects the economy to recover early next year with a Gross Domestic Product (GDP) growth target of 3% and an inflation rate of 11.9%.

“We have a total aggregate revenue of N7.89 trillion (about $21bn)and also an aggregate expenditure of N13.08 trillion ($34bn) for 2021.

“There’s a fiscal deficit of N4.489 trillion (about $12bn). This represents 3.64%, slightly above what is required by the Fiscal Responsibility Act of 3% and also to report that the total capital expenditure that is projected in the budget is 29% of the aggregate expenditure.

“This is an improvement over the 24% that we had in the 2020 Budget, but slightly below the 30% that we targeted in the economic recovery.

“Just to clarify that the 1.86 million barrels per day crude oil production includes 400,000 condensates, so we have complied with the OPEC quota, which is placed at about 1.5 million barrels per day. So the 1.46 is in meeting with the OPEC quota.

“This is important to us because as you report, if you just report the 1.86, some members of the OPEC appear to think that we are exceeding OPEC quota, whereas we are reporting oil and condensate,” Ahmed said.