The Federal Government has ruled out the possibility of re-introducing fuel and electricity subsidies, saying there is no provision for such in the 2021 budget.
Mrs. Zainab Ahmed, Minister of Finance, Budget and National Planning, disclosed this on Tuesday, at the virtual public presentation of the 2021 approved budget in Abuja.
“No. We are not bringing back fuel subsidy. We didn’t make provision for fuel subsidy in the budget. The impact of what was done is reducing some of the cost components that are within the fuel subsidy template. No provisions have been made for subsidy of fuel, no provisions have been made for subsidy of electricity”, she stated.
Prompt News recalls that President Muhammadu Buhari had on 31st December, 2020 signed 2021 N13.5 trillion budget into law, which is 25.7 percent higher to 2020 budget.
Giving insights into aggregate revenue to fund 2021 budget projected at N7.99 trillion (36 percent higher) than 2020 projection of N5.84 trillion, Mrs Ahmed said 30 percent of the projected revenue would come from oil related sources and 70 percent from non- oil sources.
“Over all, the size of the budget has been constrained by our relatively low revenue”, she said.
For expenditure component of 2021 budget, government projected recurrent (non- debt) sum of N5.99 trillion, indicating 44.1 percent of total expenditure and 13.39 higher than 2020 revised budget.
2021 budget comes with aggregate capital expenditure of 4.37 trillion representing 32.29 percent of total expenditure and 62.9 percent higher than 2020.
The debt service provision is N3.32 trillion representing 24.5 percent and 12.6 percent higher than 2020 revised budget.
To retire maturing bonds to local contractors, she said sum of N200 billion had been provided for in the new budget, representing 1.68 per cent of the total budget, adding that, ” over all, N5.60 trillion has been provided for borrowing to finance the budget deficit.
The borrowing, the Minister said would come in a two form- domestic and foreign sources with an equal fixed amount of N2.34 trillion respectively while another borrowing in sum of N709.69 billion is to be procured from multilateral and bi- lateral sources.
Privatisation proceeds target of N205.15 billion would form part of the proceeds to finance 2021 budget, said the minister.
In 2021 budget government’s ministries with large chunk of capital allocations are: Ministry of education N1,146.8 billion, health N600.52 billion, defence and security sector N1,114.16 billion; railway N11.61 billion for rehabilitation and railway tracking.
On measures government is adopting to curtail waivers, she said government was in the process of working out waiver cost as guide to final decision.
” As I reported in my presentation, some of the cost that we expect to incur under the tax waver, custom duties waiver, we said that what we are trying to do is first is to carry out the assessment of what is costing us.
“We are now in the process of reviewing what can be scaled back because the size of the cost of the tax waver is quite significant in terms of revenue for the country”
On how much government was targeting in assuming control of unclaimed dividends, an action provided for in finance Act of 2020, which is drawing flasks from certain quarters, she gave conservative estimate of N850 billion.
“There would be as much as N850 billion. We have to get the exact report from CBN and then Company’s Registrar to ascertain that so it could be realised into this special trust fund for unclaimed dividends and dormant account.
“Again, this is a special trust fund, it means government is keeping the money in trust for the beneficiaries at any time a registrar or a bank confirms that this is a true and bonafide beneficiary of this fund then government will release from that trust fund to the investors bankers bank entitlement”, she added.
Mrs. Ahmed said government released the sum of N1.80 trillion for capital projects execution in 2020, representing 89 percent of the provisions in the budget.
She stated that while the Federal Government had projected the sum of N9.97trn expenditure for 2020, it actually spent about N10.08trn representing 101 per cent performance.
She put the amount spent on debt servicing at N3.27trn while the sum of N3.19trn was released for payment of salaries and pensions.