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President Buhari Presents 2020 Budget Next Week

The Presidency on Tuesday said President Muhammadu Buhari would present the 2020 budget estimate next week.

This was against the administration’s promise to present the budget to the National Assembly in the third week of September.

However, findings by The PUNCH indicated that the non-presentation of the estimates had increased pressure on the administration to achieve a return of the country to the January-December budget cycle.

Nigeria currently runs a May-June budget cycle, a development caused by executive-legislature delays since the 8th National Assembly. The delays have caused “distortions” in implementation and the inability to meet budget targets.

On why Buhari was unable to keep to his promise of September presentation, the Presidency blamed it on the fact that the National Assembly had yet to consider and pass the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategic Paper, which should ordinarily precede the estimates.

It also noted that throughout last week, Buhari was away to the United States, where he participated in the activities of the 74th Session of the United Nations General Assembly.

It added that the UNGA session would still have delayed the presentation had the National Assembly passed the MTEF.

Incidentally, in was learnt that the letter conveying the MTEF to the National Assembly was only read to lawmakers on September 25, the same last week.

The MTEF sets out the Federal Government’s spending plans for the next three years, detailing both revenue profiles and spending projections.

But, in his response to enquiries, the Senior Special Assistant to the President on National Assembly Matters (Reps), Mr Umar El-Yakub, argued that much as the presentation was delayed, it was for some reasons.

He gave his defence, “Remember that the MTEF was presented to both chambers (Senate and House of Representatives) last week.

“You also know the President just returned from New York at the weekend where he attended the 74th Session of the United Nations General Assembly. Coincidentally, today is Independence Day (Tuesday), meaning that only yesterday (Monday) was there to present the budget if he was to present it.

“But, it will be the best bet if he (Buhari) presents the budget after the MTEF has been considered and passed by the National Assembly. So, yes, the budget is a bit late by a week or two, but for good reasons.

“Perhaps, we didn’t anticipate UNGA and the fact that MTEF had to be finalised and approved by the Federal Executive Council before it was transmitted to the National Assembly.”

El-Yakub insisted that the delay had not caused any serious setback to the budgeting process, adding that the January-December target could still be met if the presentation was done this month.

“However, we still maintain and still looking forward to this month. We are still going to meet up with the January-December budget cycle that Mr President and the National Assembly talked about”, he added.

Asked when the estimates would be presented, the presidential aide replied, “Mr President will be travelling to South Africa on Wednesday (today).

“By the time he comes back, the budget presentation will be done next week (2nd week of October), though I can’t confirm a specific date to you right now.”

In the MTEF Buhari forwarded to the National Assembly on September 25, the administration proposed an expenditure size of N9.12tr for 2020.

The projected revenue size was put at N7.17tn, meaning that the 2020 budget would come with a deficit of about N2.28trn.

But, the revenue size is N170.41bn higher than that of 2019, which was N6.99tn.

The budget is also higher than that of 2019 estimates that tallied at N8.92tn.

The MTEF document added, “The provisions for personnel cost and pension costs are estimated at N2. 67tn and N586.72bn respectively.

“In addition, N40.17bn representing 1 per cent of the Consolidated Revenue Fund, has been earmarked for the Basic Health Care Provision, N22.73bn for GAV/Routine Immunisation in the Service Wide Votes and N89.44bn for the power reform programme.”

The MTEF captures N1.01tn as the projection for capital expenditure in 2020.

The document noted further, “Given the projected revenue and planned expenditure, the fiscal deficit is estimated at N1.95tn, about N33.61bn (1.8 per cent) more than the estimate of N1.92tn in 2019.

“This level of deficit is 1.37 per cent of the GDP well below the threshold (3 per cent of the GDP) stipulated in the Fiscal Responsibility Act (FRA) 2007.

“Accordingly, the aggregate fiscal deficit for 2020 will be N228tn. which is 1.59 per cent of the GDP, still within the 3 per cent threshold.

The MTEF/FSP also contained the benchmark upon which the 2020 budget will be predicated.

The 2020-2022 MTEF/FSP documents pegged the projected budget profile for the year at $55 oil price benchmark as against $60 used for the N8.9tn 2019 budget .

It also included 2.1m barrel oil production per day as against 2.3 m barrels per day approved for the 2019 budget.
– PUNCH

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