Debt Service N3.124trn, excee

August 19, 2020
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  • Debt Service N3.124trn, exceeds Capital expenditure N3.086trn

President Muhammadu Buhari has proposed a N12.658 trillion budget for the 2021 fiscal year. Again, budgetary allocation for debt servicing N3.124 trillion exceeds allocation for capital expenditure N3.086 trillion in the 2021 budgetary framework.

The Ministry of Finance, Budget, and National Planning disclosed the 2021 budget proposal in its recent Economic Outlook document signed by the Minister of Finance, Budget, and National Planning, Ahmed Zainab.

The proposal showed that the 2021 budget is 17.2 per cent higher than the revised 2020 budget of N10.8 trillion.

Highlights of the budget proposal indicate that the aggregate revenue available for the 2021 budget is projected at N7.498 trillion; the aggregate expenditure is projected to be N12.658 trillion, representing about N5.160 trillion.

It was highlighted that the aggregate expenditure is made up of Statutory Transfers of N481.41 billion, Debt Service of N3.124 trillion, and Sinking Fund of N220 billion.

Recurrent (non-debt) expenditure is also put at N5.746 trillion and Capital expenditure (exclusive of capital in Statutory Transfers) has N3.086 trillion.

Also, N1.485 trillion of the capital expenditures is allocated to Ministries, Department, and Agencies (MDAs) Capital.

The Minister observed that the projections were in accordance with the government’s 2021-2023 Medium-Term Expenditure Framework and Fiscal Strategy Paper.

The Minister maintained that the key parameters for the 2021-23 fiscal framework were set in line with the global and domestic economic outlook.

Further highlights show that the Statutory Transfers of N481.41 billion consist of allocations to the National Judicial Council (NJC), Universal Basic Education Commission (UBEC), Niger Delta Development Commission (NDDC), National Assembly (NASS), Independent National Electoral Commission (INEC), National Human Rights Commission (NHRC), Public Complaints Commission (PCC), North East Development Commission (NEDC) and Basic Health Care Provision Fund (BHCPF).

The Finance Ministry, however, noted that these arms of government and agencies, will have to disburse the funds transferred strictly to accomplish the purposes for which they are intended.

The beneficiaries of statutory transfers are also mandated to provide the BOF periodic reports of the allocation and expenditure of the funds received, in compliance with the Fiscal Responsibility Act (2007).

The document indicated that, “The N3.124 trillion in respect of Debt Service is made up of N2.183 trillion for Domestic Debt, and N940.89 billion for Foreign Debt. Additionally, N220 billion is provisioned for the Sinking Fund to retire maturing loans.”

The proposal showed that the aggregate sum of N3.086 trillion, which excludes capital component of statutory transfers, has been set aside for six sundry critical capital expenditures.

They include N1.485 trillion for MDAS’ capital expenditure, N234.19 billion for Capital Supplementation, and N337.06 billion for Grants and donor-funded projects.

Others are N20 billion for Special Intervention Programme, N4335.59 billion for GOEs, and N674.11 billion for Multi-lateral and Bi-lateral Project-tied loans.

National Daily gathered that President Muhammadu Buhari will soon communicate to the National Assembly on a date for official presentation of the 2021 budget proposal to the joint session of the legislature.

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