*President Buhari proposes N3.6 trillion, recurrent; N2.46 trillion, Capital expenditure
*Sets aside N620.28 bn for minimum wage
*FG staff not captured in IPPIS to lose salary after October
*Sends Finance Bill for NASS consideration
By Ignatius Okorocha, and Gift Chapi-Odekina
President Muhammadu Buhari on Tuesday proposed a national budget estimate totalling N10.33trillion at a joint-session of the National Assembly for the 2020 fiscal year.
In the bill tagged “Budget of Sustaining Growth and Job Creation”, the Federal Ministries of Works and Housing, Power and Transportation were allocated the lion share of the expenditure estimates totaling N512 billion.
President Buhari walked into the hallowed chamber of the House of Representatives, where the joint-session took place, at about 2.15 pm, amidst cheers by the National Assembly members.
This year’s N10.33 trillion estimate is higher than the 2019 fiscal year of N8.33 trillion, by N2 trillion.
The budget is predicted on oil price benchmark of US$57 per barrel and daily oil production estimate of 2.18 mbpd. It also predicated on foreign exchange rate of N305 per US Dollar and GDP growth rate of 2.93%.
The expenditure estimate includes statutory transfers of N556.7 billion; non-debt recurrent expenditure of N4.88 trillion, and N2.14 trillion capital expenditure (excluding the capital component of statutory transfers).
Similarly, debt service for the fiscal year was estimated at N2.45 trillion, while provision for Sinking Fund to retire maturing bonds issued to local contractors was put N296 billion.
The Budget deficit was projected at N2.18 trillion, including draw-downs on project-tied loans, and related capital expenditure.
According to President Buhari, this represents 1.52 percent of estimated GDP, which he said is below the 3 percent threshold set by the Fiscal Responsibility Act of 2007, aligning with the ERGP target of 1.96 percent.
He said: “The deficit will be financed by new foreign and domestic borrowings, Privatization Proceeds, signature bonuses and draw-downs on the loans secured for specific development projects.”
He emphasized investment on critical infrastructure as the thrust of the capital expenditure, adding that “aggregate sum of N2.46 trillion (inclusive of N318.06 billion in statutory transfers), is proposed for capital projects”.
According to him, “although the 2020 capital budget is N721.33 billion (or 23 percent) lower than the 2019 budget provision of N3.18 trillion, it is still higher than the actual and projected capital expenditure outturns for both the 2018 and 2019 fiscal years, respectively”.
He said the emphasis will be the completion of as many ongoing projects as possible, rather than commencing new ones, adding that MDAs have not been allowed to admit new projects into their capital budget for 2020, unless adequate provision had been made for the completion of on-going projects.
He also said the National Assembly has a budget of N125 billion; Judiciary, N110 billion; North East Development Commission (NEDC), N37.83 billion; while Basic Health Care got N44.5 billion.
The president explained that total recurrent expenditure of N3.6 trillion for personnel and pension costs, included projections for the new minimum wage and proposals to improve the remuneration and welfare of the Police and Armed Forces.
On expected revenue targets, President Buhari explained that the sum of N8.155 trillion is 7 percent higher than the 2019 estimate of N7.594 trillion inclusive of the government-owned enterprises.
He assured strict implementation of Treasury Single Account (TSA) to capture the domiciliary accounts in our foreign missions.
Other key sectors captured in the budget included Defence, N100 billion; Zonal Intervention Projects, N100 billion; Agriculture and Rural Development, N83 billion; Water Resources, N82 billion; and Niger Delta Development Commission: N81 billion.
He stated that the draft Finance Bill “proposes an increase of the VAT rate from 5% to 7.5%. to be used to fund health, education and infrastructure programmes”.
He said under the bill, brown and white bread; cereals including maize, rice, wheat, millet, barley and sorghum; fish, flour and starch meals, fruits, nuts, pulses and vegetables are to be exempted from VAT.
*NASS to pass budget in Nov
Meanwhile, the President of the Senate, Ahamd Lawan has expressed the resolve of the two chambers of the National Assembly to fast-track the passage of the Appropriation Bill before the end of next month.
Ahmed assured at the joint session of the National Assemby of the resolve of the legislature to change budgetary cycle to a January-December cycle.
“The public, as well as the private sectors need a reliable Budget cycle that is predictable, and reliable for planning and execution of their fiscal and financial policies and programmes. It is therefore, necessary that the present cycle is changed to a January-December cycle.
“The National Assembly after the receipt of the budget estimates today, will swing into swift action. Both Chambers of the National Assembly have constituted their committees, we are therefore, ready to start processing the budget estimates.
“This was clearly demonstrated last week, when we received, processed and passed the request of Mr. President on the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
“We have earmarked the month of October to be the sole window for all Budget defense activities in this year, by all MDAs.
“In this regard, our Committees will be expected to conclude their work on Budget defense within October, this year.
“The subsequent necessary legislative work will be carried out in November and December, leading to eventual passage before the end of this year.”
He implored the executive to fully implement the budget, assuring that National Assembly committees will assiduously undertake oversight functions to ensure proper and timely execution.
Also, the Speaker of the House of Representatives, Hon. Femi Gbajabiamila said they will improve on past imperfections and leave “a legacy of budgets that are enacted without rancour, implemented diligently, to achieve the objectives of national development for which they are intended.
“We recognise that our highest ambitions and the collective best interests of our nationhood can only be achieved when the legislature and the executive work together in pursuit of our shared ambitions,” he said.