The Nigerian Senate has passed the 2020 budget at a record 10.59 trillion naira. The sum of 264 billion naira was added to the budget of 10.33 trillion naira presented by the President, Muhammadu Buhari.
The chairman of the Senate Committee on Appropriations, Jubril Barau explained that the increase allows for intervention in critical areas like security, infrastructure, mines and steel development, social development, among others.
After asking for extra time and was given a week, Barau, presented the final report on the floor of the Senate on Wednesday. The Senate initially planned to pass the budget on November 28 but for delay by the appropriations committee.
The President of the Senate, Ahmad Lawan, thanked his colleagues and the Executive for the cooperation. “We have done so much in a short while; we have given the Executive everything they need – budget, finance bill, MTEF, among others, he said.
The passage of the 2020 budget sees Nigeria adhering to the fabled January – December fiscal year- regarded as an organic budget calendar.
264 Billion Increase
Nigeria’s National Assembly in accordance with sections 80 and 84 of the 1999 Constitution as it relates to amendments increased the Oil Benchmark Price to $57 per barrel against the $55 proposed by the Executive while it maintained Nigeria’s daily oil production rate at 2.18 million per barrel. The committee retained the inflation rate at 10.81 percent and the exchange rate at N305-$1 as proposed by the executive. It also retained GDP Growth Rate at 2.93 percent as proposed.
Statutory transfer was passed at N560,470,827,235, Debt service at N2,725,498,930,000, Recurrent expenditure atN4,842,974,600,640, Capital expenditure at N2,465,418,006,955, Fiscal Deficit at N2.28 trillion, and Deficit/GDP – N1.52 per cent.
President Muhammadu Buhari presented an appropriation bill of N10.33 trillion for the 2020 fiscal year before a joint session of the national assembly on October 8th. He tagged the budget a budget of fiscal consolidation, investing in critical infrastructure, incentivizing the private sector and enhancing social investment programs.
The 2020 budget which includes a value-added tax increase from 5% to 7.5%, is up from the 8.83 trillion-naira budget for 2019. This also tops the previous record budget which was 9.12 trillion-naira for 2018.
Experts however opined that the minimum budget for Nigeria in 2020 should be $60b or 15% of the Gross Domestic Product which would bring Nigeria to the same level as Tanzania the lowest country in the group of top 10 economies in Africa. They believe it should be funded by income and corporate taxes adding that Buhari administration should aim to raise the budget and annual government spending to $100b by 2023.
Imminent return to January – December Budget Cycle excites Udoma
With the National Assembly passing the 2020 Appropriation Bill, the immediate past Minister of Budget and National Planning, Udo Udoma, said he has been vindicated on his position that the January to December fiscal year can be achieved once the leadership of National the Assembly aligns with the Executive.
Senator Udoma who started the campaign for the return to the January to December budget cycle had consistently blamed the inability to achieve the more strategic fiscal cycle on the frosty relationship between the two arms of government; but he was hopeful that the present administration would still achieve it once the leadership of the National Assembly is convinced and aligned with the Executive.