President of the Senate, Ahmad Lawan on Tuesday read on the floor of the Senate, the 2020 – 2021 Medium Term Expenditure Framework and Fiscal Strategy Paper from President Muhammadu Buhari.
The document forwarded to the Senate by President Muhammadu Buhari for approval proposed the sum of N12.66trillion as aggregate expenditure for 2021 on a deficit of N5.16 trillion to be financed by total loan packages of N4.28 trillion.
It further targeted N481.41billion as statutory transfers, N5.75trillion as recurrent expenditure, N3.33trillion for capital expenditure and N3.12 trillion for debt servicing.
The document equally projected $40 as oil price benchmark, 1.86million barrels as oil production per day, N360 to US dollar as exchange rate.
In the letter attached to the document, President Buhari said the presentation of the 2021-2023 MTEF/ FSP was to give the lawmakers enough time to perform its important constitutional duty of reviewing the framework.
The letter read in part: “It is with pleasure that I forward the 2021 – 2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for the kind consideration and approval of the Distinguished Senate.
“Let me seize this opportunity to express my deep gratitude for the cooperation, support and commitment of the leadership and distinguished members of the Senate in our collective efforts to sustain the restoration of the January – December financial year.
“In line with our commitment, we have worked very hard to achieve and earlier submission of the MTEF/FSP. This is to allow the National Assembly enough time to perform its important constitutional duty of reviewing the framework.
“I herewith forward the 2021 – 2023 MTEF/FSP as the 2021 budget of the Federal Government will be prepared based on the parameters and fiscal assumptions of the approved 2021 – 2023 MTEF/FSP. I seek the cooperation of the National Assembly for expeditious legislative action on the submission.”
In a copy of the document sighted by Nigerian Tribune, President Buhari expressed concern on the effect of the rampaging pandemic, Coronavirus on revenue target.
But the document revealed that the federal government was determined “to using innovative ways to raise revenues required for financing its expenditures and diversifying its revenue sources thereby increasing the Revenue to GDP ratio. The medium-term target for this remains 15 per cent. ” It noted that “higher revenue collections will enable Government to effectively deliver public services, enhance infrastructure investment and mitigate the health and economic effects of the COVID-19 Pandemic.”
The document further revealed that the federal government has seized the initiative to confront the negative effect of parlous revenue generation on capital projects.
One of the measures in the fiscal policy is to increase oil revenues, through upfront fiscal deductions by the Nigerian National Petroleum Corporation for federally funded projects.
“The NNPC is taking measures to further reduce the cost of crude oil production to $10 per barrel or below 2021.
“This will be achieved by reducing key cost drivers including logistics, security and transportation. In addition, under recovery costs by the NNPC in the course of importing petrol for the country has been eliminated with the recent elimination of subsidies in Premium Motor Spirit pricing. Other measures include accelerating licensing of Marginal Oil Fields and renewals of existing licenses as well as ramping up production from previously shut down oil wells. ”