A budget breakdown showed that N560,470,827,235 was budgeted for statutory transfer, N2,725,498,930,000 for debt servicing, N4.84 trillion for recurrent expenditure, N2,465,418,006,955 for capital expenditure, and N2.28 trillion for fiscal deficit.
Some key highlights of the budget are N46 billion for presidency, N110 billion for National Judicial Council, N111.7 billion for Universal Basic Education, N128 billion for National Assembly, N40 billion for the Independent National Electoral Commission (INEC), N38 billion for North East Development Commission, and N80 billion for Niger Delta Development Commission.
About N75 billion was also allocated for the fight against Boko Haram and other operations of the armed forces, N65 billion for the amnesty programme, N350 billion (recurrent) earmarked for special intervention programme, N20 billion for contributions to international organisations, and N22.7 billion for immunisation.
The National Assembly passed the bill last week Thursday, with an addition of about N264 billion spread on aspects the Senate deemed fit, which increased the total to ₦10.594 trillion.
President Buhari had submitted the budget on October 8 in response to the call by Senate President, Lawan, for early submission of the appropriation bill and the readiness of the executive arm to defend its various aspects. While signing the budget into law, Buhari commended the National Assembly for the speedy passage of the bill.
“I’m pleased that the National Assembly has expeditiously passed this Bill,” he said during the ceremony. “Our Federal Budget is now restored to a January-December implementation cycle.”
Since the nation returned to democracy in 1999, this year’s budget passage goes down as the earliest that the budget had been submitted, passed and signed before the budget year commences. It, perhaps, brings to end years of unnecessary dithering between the executive and the legislature over budget passage timing, the attendant effect on budget implementation and, by extension, economic planning and development.
Shortly after taking office, having earlier highlighted it as a legislative agenda, Lawan disclosed that the National Assembly would ensure the passage of the nation’s appropriation bill within three months of its submission by the executive arm of government.
Lawan had pledged that the National Assembly would ensure that it carried out the budget defense and the remaining parts of the processes before vacating for the Christmas break. He specifically said that the budget would have been passed and Mr. President would have the budget before him for assent before Christmas. According to him, the National Assembly was in a hurry to perform and support President Buhari in his efforts to transform the nation’s economy for the benefit of all citizens.
“I believe that nobody would take pleasure in wasting the time of this administration,” Lawan had said. “We are in a hurry to perform; we want to see Mr. President achieve those legacies and dreams that he has and we are going to work full course and full time to ensure that we give him the maximum support that he requires,”
With the executive keeping its side of the process, the Lawan-led Senate swung into action, making sacrifices where necessary. While presenting a report at plenary on Thursday, December 5, 2019, the chairman, Senate Committee on Appropriation, Senator Barau Jibrin, said the committee adopted the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) as approved by the National Assembly. He noted that the committee worked harmoniously with the executive in processing the bill, especially in additional revenue projection to fund critical projects.
Jibrin noted that the increase in the budget was to allow for interventions in areas like national security, road infrastructure, mines and steel development, health, and social needs, among others. The senate thereafter passed the bill following the consideration and adoption of the committee’s report.
“I hope we continue to work together as colleagues to ensure the 2020 budget is fully implemented,” Senate President Lawan added after passing the budget.
As the Buhari administration celebrates what it considers a good development going forward, especially in the light of the advantages of the January–December implementation, critics, especially from the opposition, see less positives in the turn of events and have raised doubts as to the thoroughness of the oversight considerations done by the lawmakers on the budget. The dominant tone among the critics is that the 9th Assembly is only a rubber stamp to the Buhari administration.
Yet, the supporters of the administration strongly hold the view that aside from the drawbacks of budget passage delays on the economic outlook and national development of the nation, nothing in the final budget documents passed within the period under review (1999 – 2019) suggests better scrutiny of the budget proposals from the executive.
They maintain that the power struggle between the executive and the legislature, leading to delays in the implementation of spending plans all through the period were mere political hogwash attending the needless assertion of relevance by both arms of government.
Meanwhile, the N10.59 trillion (about $35 billion) 2020 budget is the highest and indeed a record in the nation’s history. And with an assumption of a deficit of 1.52 per cent of the estimated gross domestic product, representing about N2.18 trillion to be financed through foreign and domestic borrowings, experts say the early passage of the budget this time has all but sealed Nigeria’s return to the international debt market in the year under review as the Buhari administration grapples with how to stimulate impactful economic growth.
Already, in line with the administration’s goal of stimulating the economy through massive investment in infrastructure and increasing non-oil revenues to reduce the country’s dependence on crude oil accruals, President Buhari has represented a loan request turned down by the last Assembly for about $30 billion in foreign borrowings. This is besides other innovative borrowings it plans to do in the coming year using instruments such as Sukuk, Green Bonds, and Diaspora Bonds.
Reacting to government’s borrowing, renowned economist and financial analyst, Bismarck Rewane said: “If we were borrowing for general consumption, I would discourage such. But project-specific borrowings, which would have an impact on development, growth, and productivity is good for us. We are trying to borrow about $30bn, a mere 10 per cent of about $300bn, which is our infrastructure deficit. This latest loan request is part of an old borrowing programme, which targeted special projects and infrastructure.
“So, for instance, if we are borrowing to complete the Lagos-Ibadan rail such that when completed, it could help in the movement of goods and aid the decongestion of Apapa or borrowing to finish the Lagos-Ibadan expressway, the Kano – Abuja expressway, Kano – Maiduguri expressway so that people can travel seamlessly, and goods can go from raw materials points to market in good time, that is great.”
It would be recalled that the 2019 budget was passed in May this year. This, the debt office said, prevented the country from tapping the international debt market because of time constraints before the end of its budget cycle. With Nigeria as Africa’s top oil producer, the budget assumes crude production of 2.18 million barrels a day and an oil price of $57 per barrel.
The spending plan, which includes a value-added tax increase from 5 per cent to 7.5 per cent, is up from the N8.83 trillion budget for 2019 and tops the previous record spending plan, the N9.12 trillion budget for 2018. The budget has non-debt recurrent expenditure, which includes N3.6 trillion for personnel and pension costs, an increase of N620.28 billion over 2019 for new minimum wage and proposals to improve remuneration and welfare of police and armed forces.
Government also plans to implement a single customs window, which will speed-up vessel and cargo handling and aid the issuance of more licenses to build modern terminals in existing ports, especially outside Lagos.
According to Taiwo Oyedele of PwC Nigeria, the introduction of a Finance Bill in the budget to amend various tax laws is a positive development to make the tax system dynamic and responsive to changes in the economy. Among other positives, Oyedele noted that the finance bill would promote fiscal equity, reform domestic tax laws to align with global best practices and introduce tax incentives for investments in infrastructure and capital markets. It would also support MSMEs just as it would increase revenues for the government.