THE fiscal deficit position of the Federal Government is expected to hit N5.2trn next year as the Federal Government contends with huge revenue underperformance.
President Muhammadu Buhari gave the figure on Thursday in Abuja during the presentation of the 2021 budget to a joint session of the National Assembly.
He said an aggregate expenditure of N13.08trn was being proposed for the Federal Government in 2021.
This, according to him, includes N1.35trn spending by Government-Owned Enterprises as well as Grants and Aid funded expenditures of N354.85bn.
For 2021, he said the proposed N13.08trn expenditure comprises non-debt Recurrent Costs of N5.65trn; Personnel Costs of N3.76trn; Pensions, Gratuities and Retirees’ Benefits of N501.19bn; Overheads of N625.5bn; Debt Service of N3.124trn; Statutory Transfers of N484.49bn; and Sinking Fund of N220bn to retire certain maturing bonds.
The President said the 2021 Budget deficit, inclusive of Government Owned Enterprises and project-tied loans, was projected at N5.2trn, adding that this represented 3.64 per cent of the budget size.
He said, “We remain committed to meeting our debt service obligations. Hence, we have provisioned N3.12trn for this in 2021, representing an increase of N445.57bn from N2.68trn in 2020.
“A total of N2.183trn has been set aside
to service domestic debts while N940.89bn has been provided for foreign debt service.”
The President said despite the challenges of revenue underperformance, the government had met its debt service obligations.
“We are also up to date on the payment of statutory transfers and staff salaries, while overhead costs have been significantly covered,” he said.
Buhari emphasised that revenue generation remained the major challenge for the government.
Nevertheless, he said the Federal Government was determined to tackle the persisting problems with domestic resource mobilisation, as there was a limit to deficit financing through borrowing.
He said the time had come for the government to maintain a health balance between meeting its growing expenditure commitments and long-term public financial health.
“In addition to the Strategic Revenue Growth Initiatives, we are leveraging technology and automation, as well as more effective monitoring of Independently Generated Revenues. Our efforts are aimed at addressing revenue leakages and redirecting scarce resources to the poor and vulnerable,” the President said.
