The Federal Government is planning to fund the 2021 budget with N1.49tn revenue that will be generated from non-oil sources.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, made this known during a virtual Public Presentation of 2021 FGN Approved Budget- Breakdown and Highlights on Tuesday.
Giving a breakdown of the non-oil revenue sources, she estimated that N681.72bn would be generated from Company Income Tax, N238.43bn from Value Added Tax; N508.3bn from Customs, and N60.51bn from Federation Accounts and Levies.
According to her, this means that 70 percent of the budget will be funded by revenue from non-oil sources and 30 percent of the projected revenue is to come from oil-related sources.
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Ahmed said the government planned to earn N2.01tn from oil in 2021 based on a projected oil production volume of 1.86 million barrels per day and an oil price benchmark of $40 per barrel.
Overall, she stated that the government is expecting total revenue of N7.99tn, including funds from Government-Owned Enterprises to fund the budget, which is 36.09 percent higher than the 2020 projection of N5.84tn.
The minister said estimated revenue from GOEs in 2021 is N2.17tn.
Ahmed said the overall budget deficit is N5.6tn, representing 3.93 percent of the country’s Gross Domestic Product.
According to her, the deficit would be financed mainly from borrowings from domestic sources (2.34tn); foreign sources (2.34tn), and multilateral or bilateral loans (N709.69bn).
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She said proceeds from the privatisation of government investments are expected to yield N205.15bn.
She said, “Recurrent (non-debt) spending, estimated to amount to N5.99tn is 44.1 percent of the total expenditure and 13.3 percent higher than 2020 revised estimates.
“Aggregate capital expenditure of N4.37tn is 32.2 percent of the total expenditure, and 62.9 percent higher than the 2020 revised budget.
“At N32.2tn, debt service is 24.5 percent of total expenditure and 12.6percent higher than 2020 revised budget.
“Provision to retire maturing bonds to local contractors or suppliers at N200bn, which is 1.68 percent of the total expenditure. This reflects the federal government of Nigeria’s continuing commitment to offset accumulated arrears of contractual obligations dating back over 10 years.”
She added that the Federal Government is planning to secure a $1.5bn loan from the World Bank to fund the 2021 budget deficit.
To promote fiscal transparency, accountability, and comprehensiveness, she said the budget of 60 GOEs was integrated into the Federal government’s 2021 budget.
She acknowledged that the size of the budget had been constrained by relatively low revenue.
