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Full text of Buhari budget presentation to National Assembly

Full text of Buhari budget presentation to National Assembly
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I’ll begin by asking you to pardon my voice. As you’ll be able to hear, I’ve a chilly because of working laborious to satisfy your deadline!

I’m delighted to current the 2020 Federal Budget Proposals to this Joint Session of the National Assembly, being my first funds presentation to this ninth National Assembly.

Before presenting the Budget, let me thank all of you Distinguished and Honourable members of the National Assembly, in your avowed dedication to cooperate with the Executive to speed up the tempo of our socio-economic growth and improve the welfare of our individuals.

I may even as soon as once more thank all Nigerians, who’ve demonstrated confidence in our means to ship on our socio-economic growth agenda, by re-electing this Administration with a mandate to Continue the Change. We stay resolutely dedicated to the actualization of our imaginative and prescient of a vivid and affluent future for all Nigerians.

During this tackle, I’ll current highlights of our funds proposals for the subsequent fiscal 12 months. The Minister of Finance, Budget and National Planning will present full particulars of those proposals, subsequently.

OVERVIEW OF ECONOMIC DEVELOPMENTS

The financial atmosphere stays very difficult, globally. The International Monetary Fund expects world financial restoration to decelerate from 3.6 p.c in 2018 to three.5 p.c in 2020. This displays uncertainties arising from safety and commerce tensions with attendant implications on commodity value volatility.

Nearer to dwelling, nevertheless, Sub-Saharan Africa is projected to proceed to develop from 3.1 p.c in 2018 to three.6 p.c in 2020. This is pushed by investor confidence, oil manufacturing restoration in key exporting international locations, sustained sturdy agricultural manufacturing in addition to public funding in non-dependent economies.

Mr. Senate President; Right Honourable Speaker; I’m happy to report that the Nigerian financial system up to now has recorded 9 consecutive quarters of GDP progress. Annual progress elevated from 0.82 p.c in 2017 to 1.93 p.c in 2018, and a couple of.02 p.c within the first half of 2019. The steady restoration displays our financial system’s resilience and provides credence to the effectiveness of our financial insurance policies up to now.

We additionally succeeded in considerably decreasing inflation from a peak of 18.72 per cent in January 2017, to 11.02 p.c by August 2019. This was achieved via efficient fiscal and financial coverage coordination, change fee stability and smart administration of our overseas change.

We have sustained accretion to our exterior reserves, which have risen from $23 billion in October 2016 to about $42.5 billion by August 2019. The enhance is essentially as a consequence of beneficial costs of crude oil within the worldwide market, minimal disruption of crude oil manufacturing given the secure safety state of affairs within the Niger Delta area and our import substitution drive, particularly in key commodities.

The overseas change market has additionally remained secure as a result of efficient implementation of the Central Bank’s interventions to revive liquidity, enhance entry and discourage forex hypothesis. Special home windows had been created that enabled small companies, traders and importers in precedence financial sectors to have well timed entry to overseas change.

Furthermore, as an indication of elevated investor confidence in our financial system, there have been outstanding inflows of overseas capital within the second quarter of 2019. The complete worth of capital imported into Nigeria elevated from $12 billion within the first half 12 months of 2018 to $14 billion for a similar interval in 2019.

PERFORMANCE OF 2019 BUDGET

Distinguished and Honourable Members of the National Assembly, you’ll recall that the 2019 ‘Budget of Continuity’ was primarily based on a benchmark oil value of $60 per barrel, oil manufacturing of two.Three mbpd, and an change fee of N305 to the United States Dollar. Based on these parameters, we projected a deficit of N1.918 trillion or 1.37 p.c of Gross Domestic Product.

As at June 2019, Federal Government’s precise combination income (excluding Government-Owned Enterprises) was N2.04 trillion. This income efficiency is simply 58 p.c of the 2019 Budget’s goal as a result of underperformance of each oil and non-oil income sources. Specifically, oil revenues had been beneath goal by 49 p.c as at June 2019. This displays the lower-than-projected oil manufacturing, deductions for value under-recovery on provide of premium motor spirit (PMS), in addition to larger expenditures on pipeline safety/upkeep and Frontier exploration.

Daily oil manufacturing averaged 1.86 mbpd as at June 2019, as towards the estimated 2.Three mbpd that was assumed. This shortfall was partly offset because the market value of Bonny Light crude oil averaged $67.20 per barrel which was larger than the benchmark value of $60.

Additionally, income projections from restructuring of Joint Venture Oil and Gas property and enactment of recent fiscal phrases for Production Sharing Contracts didn’t materialize, because the enabling laws for these reforms is but to be handed into regulation.

The efficiency of non-oil taxes and unbiased revenues equivalent to internally generated revenues had been N614.57 billion and N217.84 billion, respectively.

Receipts from Value Added Tax had been beneath expectations as a consequence of decrease ranges of actions in sure financial sectors, within the aftermath of nationwide elections. Corporate taxes had been affected by the seasonality of collections, which are likely to peak within the second half of the calendar 12 months.

On the expenditure facet, 2019 Budget implementation was additionally hindered by the mix of delay in its approval and the underperformance of income collections. As such, solely recurrent expenditure gadgets have been carried out considerably. Of the prorated expenditure of N4.46 trillion budgeted, N3.39 trillion had been spent by June 30, 2019.

In compliance with the provisions of the 2018 Appropriation Act, we carried out the 2018 capital funds until June 2019. Capital releases below the 2019 Budget commenced within the third quarter. As at 30th September 2019, a complete of about N294.63 billion had been launched for capital tasks. I’ve directed the Ministry of Finance, Budget and National Planning to launch an extra N600 billion of the 2019 capital funds by the top of the 12 months.

Despite the delay in capital releases, a deficit of N1.35 trillion was recorded at finish of June 2019. This represents 70 p.c of the budgeted deficit for the total 12 months.

Despite these anomalies, I’m pleased to report that we met our debt service obligations, we’re present on employees salaries and overhead prices have additionally been largely coated.

PRIORITIES

Distinguished Senators, Honourable Members, let me now flip to the 2020 Appropriation, which is designed to be a funds of:

Fiscal consolidation, to strengthen our macroeconomic atmosphere;
Investing in vital infrastructure, human capital growth and enabling establishments, particularly in key job creating sectors;
Incentivising personal sector funding important to enrich the Government’s growth plans, insurance policies and programmes; and
Enhancing our social funding applications to additional deepen their influence on these marginalised and most susceptible Nigerians.
PARAMETERS & FISCAL ASSUMPTIONS

Distinguished and Honourable Members of the National Assembly, the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) set out the parameters for the 2020 Budget. We have adopted a conservative oil value benchmark of $57 per barrel, every day oil manufacturing estimate of two.18 mbpd and an change fee of N305 per US Dollar for 2020.

We count on enhanced actual GDP progress of two.93% in 2020, pushed largely by non-oil output, as financial diversification accelerates, and the enabling enterprise atmosphere improves. However, inflation is predicted to stay barely above single digits in 2020.

Accompanying the 2020 Budget Proposal is a Finance Bill in your type consideration and passage into regulation. This Finance Bill has 5 strategic targets, by way of reaching incremental, however mandatory, modifications to our fiscal legal guidelines. These targets are:

Promoting fiscal fairness by mitigating cases of regressive taxation;
Reforming home tax legal guidelines to align with world greatest practices;
Introducing tax incentives for investments in infrastructure and capital markets;
Supporting Micro, Small and Medium-sized companies consistent with our Ease of Doing Business Reforms; and
Raising Revenues for Government.
The draft Finance Bill proposes a rise of the VAT fee from 5% to 7.5%. As such, the 2020 Appropriation Bill is predicated on this new VAT fee. The further revenues shall be used to fund well being, schooling and infrastructure programmes. As the States and Local Governments are allotted 85% of all VAT revenues, we count on to see higher high quality and effectivity of their spending in these areas as properly.

The VAT Act already exempts prescription drugs, academic gadgets, and fundamental commodities, which exemptions we’re increasing below the Finance Bill, 2019. Specifically, Section 46 of the Finance Bill, 2019 expands the exempt gadgets to incorporate the next:

Brown and white bread;
Cereals together with maize, rice, wheat, millet, barley and sorghum;
Fish of every kind;
Flour and starch meals;
Fruits, nuts, pulses and greens of varied varieties;
Roots equivalent to yam, cocoyam, candy and Irish potatoes;
Meat and poultry merchandise together with eggs;
Milk;
Salt and herbs of varied varieties; and
Natural water and desk water.
Additionally, our proposals additionally increase the edge for VAT registration to N25 million in turnover every year, such that the income authorities can focus their compliance efforts on bigger companies thereby bringing aid for our Micro, Small and Medium-sized companies.

It is totally important to accentuate our income era efforts. That mentioned, this Administration stays dedicated to making sure that the inconvenience related to any fiscal coverage changes, is moderated, such that the poor and the susceptible, who’re most in danger, don’t bear the brunt of those reforms.

REVENUE ESTIMATES

The sum of N8.155 trillion is estimated as the entire Federal Government income in 2020 and contains oil income N2.64 trillion, non-oil tax revenues of N1.81 trillion and different revenues of N3.7 trillion. This is 7 p.c larger than the 2019 comparative estimate of N7.594 trillion inclusive of the Government Owned Enterprises.

The growing share of non-oil revenues underscores our confidence in our income diversification methods, going ahead. Furthermore, in our efforts to reinforce transparency and accountability, we will proceed our strict implementation of Treasury Single Account (TSA) to seize the domiciliary accounts in our overseas missions and people linked to Government Owned Enterprises.

PLANNED EXPENDITURE

An combination expenditure of N10.33 trillion is proposed for the Federal Government in 2020. The expenditure estimate consists of statutory transfers of N556.7 billion, non-debt recurrent expenditure of N4.88 trillion and N2.14 trillion of capital expenditure (excluding the capital part of statutory transfers). Debt service is estimated at N2.45 trillion, and provision for Sinking Fund to retire maturing bonds issued to native contractors is N296 billion.

STATUTORY TRANSFERS

The sum of N556.7 billion is offered for Statutory Transfers within the 2020 Budget and consists of:

N125 billion for the National Assembly;
N110 billion for the Judiciary;
N37.83 billion for the North East Development Commission (NEDC);
N44.5 billion for the Basic Health Care Provision Fund (BHCPF);
N111.79 billion for the Universal Basic Education Commission (UBEC); and
N80.88 billion for the Niger Delta Development Commission (NDDC), which is now supervised by the Ministry of Niger Delta Affairs.
We have elevated the budgetary allocation to the National Human Rights Commission from N1.5 billion to N2.5 billion. This 67 p.c enhance in funding is finished to allow the Commission to carry out its features extra successfully.

RECURRENT EXPENDITURE

The non-debt recurrent expenditure consists of N3.6 trillion for personnel and pension prices, a rise of N620.28 billion over 2019. This enhance displays the brand new minimal wage in addition to our proposals to enhance remuneration and welfare of our Police and Armed Forces. You will all agree that Good Governance, Inclusive Growth and Collective Prosperity can solely be sustained in an atmosphere of peace and safety.
Our fiscal reforms shall introduce new efficiency administration frameworks to manage the price to income ratios for Government Owned Enterprises, which shall come below important scrutiny. We will reward distinctive income and price administration efficiency, whereas extreme penalties will attend failures to realize agreed income targets.

We shall additionally maintain our efforts in managing personnel prices. Accordingly, I’ve directed the stoppage of the wage of any Federal Government employees that’s not captured on the Integrated Payroll and Personnel Information System (IPPIS) platform by the top of October 2019. All businesses should get hold of the required approvals earlier than embarking on any recent recruitment and any contraventions of those directives shall appeal to extreme sanctions.

Overhead prices are projected at N426.6 billion in 2020. Additional provisions had been made just for the newly created Ministries. I’m assured that the advantages of those new Ministries because it pertains to environment friendly and efficient service supply to our residents considerably outweighs their budgeted prices.

That mentioned, the respective Heads of MDAs should guarantee strict adherence to authorities laws relating to expenditure management measures. The proliferation of Zonal, State and Liaison Offices by Federal Ministries, Departments and Agencies (‘MDAs’), with attendant avoidable enhance in public expenditure, will not be tolerated.

CAPITAL EXPENDITURE

As I discussed earlier, investing in vital infrastructure is a key part of our fiscal technique below the 2020 Budget Proposals. Accordingly, an combination sum of N2.46 trillion (inclusive of N318.06 billion in statutory transfers) is proposed for capital tasks in 2020.

Although the 2020 capital funds is N721.33 billion (or 23 p.c) decrease than the 2019 funds provision of N3.18 trillion, it’s nonetheless larger than the precise and projected capital expenditure outturns for each the 2018 and 2019 fiscal years, respectively. However, at 24 p.c of combination projected expenditure, the 2020 provision falls considerably in need of the 30 p.c goal within the Economic Recovery and Growth Plan (ERGP) 2017-2020.

The foremost emphasis would be the completion of as many ongoing tasks as attainable, moderately than commencing new ones. MDAs haven’t been allowed to confess new tasks into their capital funds for 2020, except sufficient provision has been made for the completion of ALL ongoing tasks.

Accordingly, we have now rolled over capital tasks that aren’t prone to be totally funded by the top of 2019 into the 2020 Budget. We are conscious that the National Assembly shares our view that these tasks must be prioritised and given sufficient funding within the 2020 Appropriation Act.

Therefore, I’ll as soon as once more commend the ninth National Assembly’s agency dedication to cease the pointless cycle of delayed annual budgets. I’m assured that with our renewed partnership, the deliberations on the 2020 Budget shall be accomplished earlier than the top of 2019 in order that the Appropriation Act will come into impact by the first of January.

Some of the important thing capital spending allocations within the 2020 Budget embody:

Works and Housing: N262 billion;
Power: N127 billion;
Transportation: N123 billion;
Universal Basic Education Commission: N112 billion;
Defence: N100 billion;
Zonal Intervention Projects: N100 billion;
Agriculture and Rural Development: N83 billion;
Water Resources: N82 billion;
Niger Delta Development Commission: N81 billion;
Education: N48 billion;
Health: N46 billion;
Industry, Trade and Investment: N40 billion;
North East Development Commission: N38 billion;
Interior: N35 billion;
Social Investment Programmes: N30 billion;
Federal Capital Territory: N28 billion; and
Niger Delta Affairs Ministry: N24 billion.
Although Government’s precise spending has lowered, our plans to leverage personal sector funding via our tax credit score schemes will guarantee our capital programmes are sustained.

For instance, we launched the Road Infrastructure Tax Credit Scheme, pursuant to which I’ve authorised the development and rehabilitation of 19 Nigerian roads and bridges of 794.4km throughout 11 States. Indeed, the Scheme has attracted personal funding of over N205 billion and the primary set of tax credit are being processed by the Federal Ministry of Finance, Budget and National Planning.

As I discussed throughout my Independence Day Speech, below the Presidential Power Initiative, we’ll modernise the National Grid in Three phases; ranging from 5 Gigawatts to 7 Gigawatts, then to 11 Gigawatts by 2023, and eventually 25 Gigawatts afterwards in collaboration with the German Government and Siemens.

BUDGET DEFICIT

Budget deficit is projected to be N2.18 trillion in 2020. This consists of drawdowns on project-tied loans and the associated capital expenditure.

This represents 1.52 p.c of estimated GDP, properly beneath the three p.c threshold set by the Fiscal Responsibility Act of 2007, and consistent with the ERGP goal of 1.96 p.c.

The deficit shall be financed by new overseas and home borrowings, Privatization Proceeds, signature bonuses and drawdowns on the loans secured for particular growth tasks.

DEBT SERVICE

Nigeria stays dedicated to assembly its debt service obligations. Accordingly, we offered the sum of N2.45 trillion for debt service. Of this quantity, 71 p.c is to service home debt which accounts for about 68 p.c of the entire debt. The sum of N296 billion is offered for the Sinking Fund to retire maturing bonds issued to native contractors.

I’m assured that our aggressive and re-energised income drive will preserve debt-revenue ratio at acceptable and manageable ranges. We may even proceed to be modern in our borrowings by utilizing devices equivalent to Sukuk, Green Bonds and Diaspora Bonds.

SOCIAL INVESTMENT PROGRAMME

Our authorities stays dedicated to making sure the equitable sharing of financial prosperity. Our concentrate on inclusive progress and shared prosperity underscores our eager curiosity in catering for the poor and most susceptible. Accordingly, we’re revamping and enhancing the implementation of the National Social Investment Programme via the newly created Ministry of Humanitarian Affairs, Disaster Management and Social Development.

The National Social Investment Programme is already creating jobs and financial alternative for native farmers and cooks, offering funding to artisans, merchants, youths, and supporting small companies with enterprise schooling and mentoring.

The provision of N65 billion for the Presidential Amnesty Programme has been retained within the 2020 Budget. Furthermore, to quick monitor the rebuilding efforts within the North East area, a provision of N37.83 billion has been made for the North East Development Commission.

OTHER STRATEGIC PRIORITIES IN 2020

The 2020 Budget is predicted to speed up the tempo of our financial restoration, promote financial diversification, improve competitiveness and guarantee social inclusion. We are optimistic of accomplishing larger and extra inclusive GDP progress with the intention to obtain our goal of large job creation and lifting lots of our residents out of poverty.

The effectivity of port operations may even be enhanced by implementing a single customs window, dashing up vessel and cargo dealing with and issuing extra licenses to construct fashionable terminals in current ports, particularly exterior Lagos.

Furthermore, finishing the reforms to the governance and financial phrases of the Petroleum Industry will present certainty and appeal to additional investments into the sector. A consequence of this shall be enhance in jobs and in authorities’s take. I subsequently search your help in passing into regulation two Petroleum Industry Executive Bills I shall be forwarding to you shortly.

In addition, we have to rapidly evaluation the fiscal phrases for deep offshore oil fields to replicate the present realities and for extra income to accrue to the federal government. The Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Bill 2018, was submitted to the eighth National Assembly in June 2018 however was sadly not handed into regulation.

I shall be re-forwarding the Bill to this Assembly very shortly and subsequently urge you to move it. We estimate that this effort can generate no less than 500 million US {dollars} further income for the Federal Government in 2020, and over one billion {dollars} from 2021.

Whilst the Budget is our principal fiscal instrument to realize these socio-economic growth targets, we stay dedicated to prudently planning for our future financial prosperity. In this regard, I’ve directed the reconstituted Ministry of Finance, Budget and National Planning to start preparations in the direction of the event of successor medium – and long-term financial growth plans, significantly because the Nigeria Vision 20-2020 and the ERGP expire subsequent 12 months.

CONCLUSION

Mr. Senate President, Mr. Speaker, Distinguished and Honourable Members of the National Assembly, this speech can be incomplete with out, as soon as once more, commending the patriotic resolve of the ninth National Assembly to collaborate with the Executive within the effort to ship inclusive progress and improve the welfare our individuals. I guarantee you of the sturdy dedication of the Executive to deepen the connection with the National Assembly.

As you evaluation the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), in addition to the 2020 Budget estimates, we imagine that the legislative course of shall be fast, in order to revive the nation to the January-December monetary 12 months.

It is with nice pleasure subsequently, that I lay earlier than this Distinguished Joint Session of the National Assembly, the 2020 Budget Proposals of the Federal Government of Nigeria.

I thanks most sincerely in your consideration.

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Mark Barney
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Mark Barney

If they can Make something better out of the budget it will be okay for us

Irmiya Daniya
Member
Irmiya Daniya

Good