The Nigerian Senate, on Thursday, December 5th, 2019, passed the 2020 National Budget of N10.59 trillion. This is Nigeria’s most ambitious budget to date. It is also not surprising that it includes a deficit of N2.18 trillion, which is about 1.52% of the estimated gross domestic product.
According to Reuters, the Nigerian government will possibly have to borrow money from the international debt market in order to finance the 2020 budget. The country’s economy has been struggling to fully recover, following a destabilizing 2015 recession.
Recall that Nairametrics reported that the Nigerian government plans to primarily source funding to finance the budget from oil (N2.64 trillion), Non-oil (N1.81 trillion), and others (N3.7 trillion).
Earlier in September, Nigeria approached the World Bank to borrow the sum of $2.5 billion to facilitate the budget. Although the country will most likely receive the loan once negotiations are finalised, the truth remains that it will not be enough to meet the deficit that has been highlighted above.
The government is also exploring various means available to internally generate revenue. Recently, there has been an increase in VAT, even as revenue targets for various government agencies have been increased.
In the meantime, initial breakdown of the 2020 National Budget showed what the budgeted amount would be spent on.
- Works and Housing: N262 billion
- National Assembly: N125 billion
- Judiciary: N110 billion
- Power: N127 billion
- Transportation: N123 billion
- Universal Basic Education Commission: N112 billion
- North East Development Commission: N37.83 billion
- Defence: N100 billion
- Industry, Trade & Investment: N40 billion
- Social Investment Programmes: N30 billion
- FCT: N28 billion
- Health: N46 billion
- Niger Delta Ministry: N24 billion
- Interior: N35 billion
- Zonal Intervention Projects: N100 billion
- Agriculture and Rural Development: N83 billion
- Water Resources: N82 billion
- Niger Delta Development Commission: 81 billion
- Education: N48 billion
- Capital Projects: N2.46 trillion