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Just in: Senate passes 2021 budget, raises it by N505bn

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Budget

The senate has passed the sum of 13.588 trillion as budget for 2021 fiscal year which was increased by N505 billion.

The appropriation bill was passed by the senate on Monday after Jibrin Barau, chairman of the committee on appropriation, presented a report.

While presenting his report, Barau noted that the COVID-19 pandemic affected all sectors of the economy. The chairman said the executive arm of government could present a supplementary budget owing to the fact that the country’s crude oil price is on the rise.

“That the impact of COVID-19 has affected all facets of life. There is a remarkable increase of Nigeria’s oil price. In view of increasing oil prices, the executive may wish to submit a supplementary bill to lift the country out of recession,” he said.

On October 8, President Mohammadu Buhari presented the 2021 budget of N13.08 trillion to a joint session of the national assembly.

The budget is based on an exchange rate benchmark of N379/$ and crude oil production of 1.86 million barrels per day (including 400,000 barrels of condensate) at $40 per barrel.

Capital expenditure in the budget is estimated at N2.083 trillion which represents 29 percent of the total budget. It targets three percent GDP growth and 11.95 percent inflation rate.

However, with the increase of the total budget size, the capital expenditure is now N4.125 trillion. The sum of N3.324 trillion was earmarked for debt service and the sum of N5.641 trillion was voted for recurrent (non-debt expenditure).

Highlights of the 2021 capital projects include;

  • Power – N198 billion (inclusive of N150 billion for the Power Sector Recovery Plan);
  • Works and Housing – N404 billion.
  • Transportation – N256 billion.
  • Defence – N121 billion.
  • Agriculture and Rural Development – N110 billion.
  • Water Resources – N153 billion.
  • Industry, Trade and Investment – N51 billion.
  • Education – N127 billion.
  • Universal Basic Education Commission – N70 billion.
  • Health – N132 billion.
  • Zonal Intervention Projects – N100 billion.
  • Niger Delta Development Commission – N64 billion.

The major chunk of the budget allocation for key capital projects goes to Works and Housing, followed by Transportation, Power, Water Resources, Health, Education, Defence, Agriculture, etc.

Recurrent expenditure

A major part of the 2021 recurrent cost estimate of 37% of the budget (N4.888 trillion) is allocated to paying salaries and overheads. The recurrent expenditures (i.e. Salaries, Pensions, Gratuities and Retirees’ Benefits and overheads) for the MDAs providing critical public services include;

  • N227.02 billion for the Ministry of Interior;
  • N441.39 billion for the Ministry of Police Affairs;
  • N545.10 billion for Ministry of Education;
  • N840.56 billion for Ministry of Defence; and
  • N380.21 billion for Ministry of Health.

The Ministry of Defence (17%), followed by Ministry of Education (11%), and Ministry of Police Affairs (9%) got huge shares of the budget allocation.

Nigeria: Senate Passes 2021 Budget

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