BEVERLY HILLS, January 13, (THEWILL) – A total of N4.8 trillion will go into Overhead and Personnel Costs as well as Pensions, Gratuities and Retirees Benefits as contained in Nigeria’s approved N13.59 trillion budget for the 2021 fiscal year.
This is the highest figure for the sub-heads in the nation’s budget history and is N973.82 billion over the actual expenditures for 2020, representing 24.86 per cent increase.
The cumulative amount also represents 86.52 per cent of total recurrent expenditure (non-debt) of N5.64 trillion in the 2021 budget as against 79.23 per cent of 2020 recurrent expenditure (non-debt) of N4.94 trillion.
These were contained in the details of the 2021 budget virtually presented Tuesday by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
According to Ahmed, the ‘Budget of Economic Recovery and Resilience’, is aimed at accelerating the economic recovery process, promoting social inclusion and strengthening the resilience of the economy.
She added that the aggregate revenue available to fund the 2021 budget is projected at N7.9 trillion (36.9 per cent higher than the 2020 projection of N5.84 trillion).
Further analysis of the document revealed that major components of the recurrent expenditure (non-debt) are categorized mainly under Ministries Departments and Agencies (MDAs) and Government Owned Enterprises (GOE).
Aggregate Capital Expenditure for 2021 is N4.37 trillion Naira representing 61.32 per cent over N2.68 trillion for 2020, yet less than N4.88 trillion budgeted for Personnel, Overhead and ancillary costs.
Overall budget deficit for 2021 is N5.60 trillion or 3.93 per cent of GDP as against 3.97 per cent of GDP in 2020 with overall deficit of N4.97 trillion.
The Finance Minister revealed that the budget deficit would be financed from Domestic sources N2.34 trillion, Foreign sources N2.34 trillion, Multi-lateral/Bi-lateral loan drawdowns N709.69 billion and Privatization proceeds N205.15 billion.
Nigeria’s total debt stock is N31 trillion as of June 2020.
A total of N3.35 trillion will go for debt servicing representing 24.5 per cent of total expenditure and 12.6 per cent higher than 2020 revised budget.
With projected aggregate revenue of N7.9 trillion available to fund the 2021 budget, Nigeria will spend 42 per cent of its revenue on debt servicing during the period.
“In aggregate, 30 per cent of projected revenues is to come from oil-related sources while 70 per cent is to be earned from non-oil sources”, Ahmed said.
The minister reiterated that Nigeria’s fiscal challenge hinges on revenue not debt, but analysts have expressed concern over government’s poor resource management culture both at the federal and state levels.
In a recent chat with THEWILL, Professor of Accounting and Finance and immediate past Vice-Chancellor of Nasarawa State University, Keffi, Muhammad Mainoma, took a swipe at the government bloated recurrent expenditure.
He said that budget performance that concentrates majorly on recurrent expenditure offers no reason for an applause.
“It is not actually a performance to be happy with as a lot needs to be done in power and physical infrastructures as well as capacity building to take out our people from extreme poverty”, he said.
In its publication on the 2020 Budget entitled ‘X-raying the 2020 FGN budget proposal’, PwC noted, “The cost of governance remains a cause for concern, as recurrent expenditure continues to grow annually.
“By 2020, cumulative FG personnel costs, pensions and gratuities (from 2011 to 2020) will be over 20 trillion.
“As of 2018, the federal government’s workforce was reported to be about 400,000 in total, signifying that about 0.2 per cent of the country’s population consumed about one-third (33 per cent) of the national budget.
“This figure is expected to expand further in coming years, especially given the low staff turnover in the federal civil service and the new minimum wage.”
A report earlier cited by THEWILL revealed that the renovation of the National Assembly will consume N9.2 billion while N128 billion is provided for salaries and allowances of the lawmakers and the bureaucracy of the National Assembly in the 2021 budget.
Construction of the National Assembly library will take ₦4 billion as a whopping N12.5 billion (up from N8.5 billion in 2020) is provided for the maintenance of the presidential fleet.
A total of N2.6 billion is provided for religious tourism. This comprises programmes and activities of the National Hajj Commission of Nigeria and the Nigerian Christian Pilgrim Commission.
They are to receive N1.39 billion and N1.38 billion, respectively.
The cost elements, in the case of National Hajj Commission of Nigeria, include general travels and transportation, training and consulting services, refreshment and meals, honorarium, sitting allowance, publicity and advertisement, welfare packages and monitoring activities.
The severe revenue challenge does not seem to pose any restraint on Government in funding religious tourism which is widely condemned.
“With shrinking revenues to meet priority programmes and activities, the government must cut down drastically on identified areas of wastage and frivolities in the system.
“One area of such needless wastage is using public funds to finance strictly private religious activities,” Raphael Uchenna, an Abuja based legal practitioner told Premium Times, an online newspaper late last year.
Another worrying aspect of the budget, according to the report, is the N3.97 billion provided for President Buhari and Vice President Yemi Osinbajo to take care of their food, cars and travels in 2021.
Details of the spending plan include N2.4 billion for Buhari’s international and local travels (N1.65 billion and N775 million respectively).
For the Vice President, N801 million is budgeted for travels for the year.
This is made up of N517 million and N283 million for international and local travels, respectively.
The budget also revealed that N436 million will be spent on purchasing motor vehicles for the State House.
An additional N116 million will be spent on tyres for bulletproof vehicles, plain cars, close circuit vehicles, platform trucks, jeeps, Hilux, ambulances and other utility and operational vehicles for the Presidency.
Defence has the largest allocation of the 2021 budget with N838.56 billion, followed by Education and Ministry of Police Affairs with N545.24 billion and N437.25 billion, respectively.
“Revenue generation remains the most critical fiscal issue over the medium term.
“Several measures are being instituted to improve government revenue and entrench a regime of prudence with emphasis on achieving value for money.
“Improving the tax administration framework to optimize government revenue is a major thrust of the Administration’s Strategic Revenue Growth Initiatives (SRGI).
“The Finance ACT, 2020, assented to by Mr. President contain measures to advance the SRGI’, Ahmed stated.