The Federal Executive Council (FEC) has approved the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) with an annual N12.66 trillion budget in the next three years.
The Minister of State for Finance, Budget and National Planning, Mr Clement Agba, disclosed this while briefing State House correspondents at the end of the eighth virtual FEC meeting presided over by President Muhammadu Buhari which lasted about eight hours.
Agba said other projections in the budgets was a $40 per barrel oil benchmark, oil production volume of 1.6 million barrel per day, inflation rate of 11.9 per cent, projected gross domestic growth rate of 3 percent and revenue target of N7.50 trillion.
On the projected revenue for 2021, he said: “Yes, I spoke of the various assumptions that has been made in terms of parameters and those assumptions are what drives revenues that we get and in terms of how you are able to reflate the economy and spend helps your GDP.
“For Nigeria, it was projected that by the end of this year we should have the GDP top at -4.42 percent. However, with the stimulus if properly done and executed, we expect that the GDP will improve to about negative -1.8 percent.
“So in terms of the revenue projection, for 2020 it was N5.84 trillion but for 2021 we expect that it will be N7.50 trillion.
“Even though the oil production is much lower than our capacity, because we are restricted by the OPEC Plus quota in order to get the prices at par, we have brought in 63 Government Owned Enterprises(GOE).
“We are bringing them into the budget order to be able to sure up the budget by additional N2.17 trillion into the budget, hence we are saying we are projecting a larger budget size for 2021 over and above the N10.84 trillion for the revised 2020 budget.
“When you look at the N7.5 trillion and the expectations to spend N12 trillion, yes definitely there will be gap and that gap has to be financed.”
On debt servicing and repayment, Agba also said: “Is the plan for borrowing payment? Yes there is. Even in the 2020 budget we had provisions to repay debt and in the 2021 there is provision to repay debt.
“There is a sinking fund, we look at the ratio and ensure that we are able to pay our debts. Of course, that is why we have the debt management office to run those numbers and advise us.”
Leave a comment