The Federal Government said it released the sum of N1.80 trillion for the execution of capital projects in 2020.
The release, it stated, represented 89 percent of the provisions for capital expenditure in the budget.
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed disclosed this on Tuesday at the virtual public presentation of the 2021 approved budget.
Zainab said the sum of N118.37 billion was released for COVID-19 capital expenditure.
She stated that while the Federal Government had projected the sum of N9.97trn expenditure for 2020, it actually spent about N10.08trn representing 101 per cent performance.
She put the amount spent on debt servicing at N3.27trn while the sum of N3.19trn was released for payment of salaries and pensions.
President Muhammadu Buhari on 31st December,2020 signed 2021 N13.5 trillion budget into law.
The signed 2021 budget is 25.7 percent higher to 2020 budget.
Giving insights into aggregate revenue to fund 2021 budget projected at N7.99 trillion (36 percent higher ) than 2020 projection of N5.84 trillion, Mrs Ahmed said 30 percent of the projected revenue would come from oil-related sources and 70 percent from non-oil sources.
“Over all, the size of the budget has been constrained by our relatively low revenue,” she said.
For expenditure component of 2021 budget, government projected recurrent ( non- debt) sum of N5.99 trillion, indicating 44.1 percent of total expenditure and 13.39 higher than 2020 revised budget.
2021 budget comes with aggregate capital expenditure of 4.37 trillion representing 32.29 percent of total expenditure and 62.9 percent higher than 2020 .
The debt service provision is N3.32 trillion representing 24.5 percent and 12.6 percent higher than 2020 revised budget.
To retire maturing bonds to local contractors, she said sum of N200 billion had been provided for in the new budget, representing 1.68 per cent of the total budget, adding that, “over all, N5.60 trillion has been provided for borrowing to finance the budget deficit.”
The borrowing , the Minister said, would come in two forms- domestic and foreign sources – with an equal fixed amount of N2.34 trillion respectively while another borrowing in the sum of N709.69 billion is to be procured from multilateral and bi- lateral sources.
Privatisation proceeds target of N205.15 billion would form part of the proceeds to finance 2021 budget, said the minister.
In 2021 budget government’s ministries with large chunk of capital allocations are: Ministry of education N1,146.8 billion, health N600.52 billion, defence and security sector N1,114.16 billion; railway N11.61 billion for rehabilitation and railway tracking.
On measures government is adopting to curtail waivers, she said government was in the process of working out waiver cost as giude to final decision.
“As I reported in my presentation, some of the cost that we expect to incur under the tax waver, custom duties waiver, we said that what we are trying to do is, first, to carry out the assessment of what is costing us.
“We are now in the process of reviewing what can be scaled back because the size of the cost of the tax waver is quite significant in terms of revenue for the country.”
Responding to inquiry on the fate of oil subsidy provisions, the Minister said it was a settled issue.
She said the issue had been dealt with and ruled out the possiblity of retaining oil subsidy.
“No. We are not bringing back fuel subsidy. We didn’t make provision for fuel subsidy in the budget. The impact of what was done is reducing some of the cost components that are within the fuel subsidy template. No provisions have been made for subsidy of fuel, no provisions have been made for subsidy of electricity,” she stated.
On how much government was targeting in assuming control of unclaimed dividends, an action provided for in Finance Act of 2020, which is drawing flak from certain quarters, she gave a conservative estimate of N850 billion.
“There would be as much as N850 billion. We have to get the exact report from CBN and then Company’s Registrar to ascertain that so it could be realised into this special trust fund for unclaimed dividends and dormant account.
“Again, this is a special trust fund, it means government is keeping the money in trust for the beneficiaries at any time a registrar or a bank confirms that this is a true and bonafide beneficiary of this fund then government will release from that trust fund to the investors bankers bank entitlement,” she added.
The government, the Minister restated, was not keen about locking down the economy.
She, however, said government would have no choice but to toe the path if health challenges posed by breach of COVID-19 protocols continued unabated.
“We hope we never have to lockdown the economy like we did before because the impact is very high on the economy, but then if the health challenge becomes so large, and government has no option then that step might be taken.
“But right now, what we are doing as government, is to re-enforce the measures that needed to be taken by government, by companies; by individuals to mitigate the impact of COVID-19 pandmic to reduce the expansion and also obviates the health challenges.
“Currently the vaccines are now out and they are available and Nigeria is in the process of deciding and beginning to acquire its own vaccine so we do hope that a lockdown the type we’ve seen in 2020 will not happen,” she assured.
The Minister gave an insight into the finance implication of procuring COVID-19 vaccines by the government.
“First, we are aware that we are expecting donations . As you know, there is a global alliance to support economically weak nations with vaccines.
“Our understanding of the current plan is that, we will be getting vaccines donations to cover up to 20% of our population. But then, the global standards say that to achieve immunity you have to vaccine at least 70% of the population and so there is a 50% of the population that we may be required to pay for their own vaccination.
“There is inter-ministerial committee looking at this matters and the assurance is that government will do what ever is needful to keep the citizens and economy safe even if it means coming back with a supplementary budget as the minister indicated earlier,” Ahmed said.
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