NIGERIA’S debt service obligations in the 2021 Budget stand at N3.124tn, according to the Budget Call Circular, released by the Budget Office of the Federation.
This will be made up of N2.183tn, for domestic debt; and N940.89bn for foreign debt.
The budget also provided ₦220 billion for Sinking Fund to retire maturing loans from bonds and Treasury Bills.
The Federal Government presented a spending layout of about ₦12.658tn in 2021, out of which ₦3.086tn (excluding capital component of statutory transfers) has been set aside for critical capital expenditure.
Spending in this category include: ₦1.485tn for capital expenditure of Ministries, Departments and Agencies; ₦234.19bn for Capital Supplementation; ₦337.06bn for Grants and donor funded projects; ₦20bn for Special Intervention Programme; ₦4335.59bn for Government Owned Enterprises; and ₦674.11bn for Multi-lateral and Bi-lateral Project-tied loans.
The Point had reported that the Federal Goverment warned Ministries, Departments and Agencies of government not to include fresh capital projects in the 2021 budget.
The warning was also contained in the 2021 Budget Call Circular.
The 2021 Call Circular sets out the requirements and instructions that must be satisfied and followed in the preparation of the 2021 Federal Government Budget Proposal.
The preparation of the budget estimates for MDAs is to take into consideration the 2023 Medium Term policies/strategies contained in the 2021 Expenditure Framework and Fiscal Strategy Paper, which is the Federal Government’s pre-budget statement.
The Minister of Finance, Zainab Ahmed, said, in allocating capital budget resources, MDAs were to accord priority to ongoing projects, especially those nearing completion that fit into government’s current priorities.
In preparing the budget, the document stated that these priorities must be linked to the Nigerian Economic Sustainability Plan’s core objectives.
The objectives are to stimulate the economy by preventing business collapse and ensuring liquidity; retain or create jobs, using labour intensive methods in key areas like agriculture, facility maintenance, housing and direct labour interventions; and undertake growth enhancing and job creating infrastructural investments in roads, bridges, solar power, and communications technologies.
Also, the plan is to promote manufacturing and local production at all levels and advocate the use of Made-in-Nigeria goods and services, as a way of creating job opportunities.
It also aims at achieving self-sufficiency in critical sectors of the Nigerian economy and curbing unnecessary demand for foreign exchange, which might put pressure on the exchange rate, while extending protection to the very poor and other vulnerable groups, including women and persons living with disabilities, through pro-poor spending.
The minister said, “As a general rule, MDAs may not be allowed to initiate new projects/programmes unless they can demonstrate that adequate provisions have been made for ongoing projects. In addition to alignment with the objectives of the NESP, the likelihood of completion within the medium-term, not later than 2023, should be considered in prioritising capital projects.
“Only expenditures on programmes/projects that are truly of a capital-nature will be admitted into MDAS capital budget proposals. Except where absolutely critical to the functioning of respective MDAs, proposals such as expenditure on vehicles, furnishing, construction/purchase of office or residential buildings and equipping of non-critical offices will not be accommodated in the 2021 budget.”
She added, “For avoidance of doubt, MDAs are reminded not to provide for recurrent expenditure in their Capital budget as a way of subverting the recurrent expenditure ceilings.
“The Budget Office shall reallocate any such provisions to Capital Projects within/outside the MDA as it deems appropriate.”
