President Muhammadu Buhari Tuesday signed the 2020 budget into law, returning the country to the January-December budget cycle.
The budget, tagged “Budget of Sustaining Growth and Job Creation”, is Nigeria’s biggest budget ever, totalling N10.59 trillion. It is up from the 8.83 trillion-naira budget for 2019 and tops the previous record spending plan, the 9.12 trillion-naira budget for 2018.
Key assumptions and parameters upon which the 2020 budget was based include crude oil production of 2.18 mbpd while the benchmark oil price is $57.
The budget assumes a deficit of 1.52 percent of the estimated gross domestic product – representing around 2.18 trillion naira – to be financed through foreign and domestic borrowing.
The National Assembly had on December 5 passed and raised the total estimates from the proposed budget from N10.33tn to N10.59tn.
The spending plan includes a value-added tax increase from five percent to 7.5 percent.
A breakdown of the budget figure as approved by the Senate indicates N560. 4 billion for statutory transfers, N4.84 trillion for recurrent expenditure, capital expenditure provision of N2.46 trillion and N2.72 trillion for debt servicing.
In the approved budget, defence got the highest vote for recurrent expenditure with N784,589 billion. It also got the highest vote of N116.181 billion for capital expenditure. The education sector got the second highest recurrent expenditure of N490.303 billion as well as N84.728 billion for capital expenditure.
Works and housing sector got the highest capital expenditure vote of N315, 563 billion in addition to its N27.983 billion recurrent expenditure.
National Judicial Council N110billion Niger-Delta Development Commission (NDDC) N80.8billion and Universal Basic Education (UBE) N111.7billion, National Assembly N128billion, Public Complaints’ Commission N4.7billion, Independent National Electoral Commission (INEC) N40billion, National Human Rights Commission N2.5billion, North East Development Commission N38. 49 billion, and the Basic Health Care Fund N44. 49billion.
According to the budget document, the GDP growth rate is projected at 2.93 per cent while inflation rate is put at 10.81 per cent. The budget is also based on an exchange rate of N305 per US dollar.