Below are the key assumptions behind the budget and movements in the proposed fiscal parameters between the revised 2020 and 2021 Budgets:

 

Budget Assumption/ Fiscal Parameter	2020 Approved Budget	2020 Revised Budget	2021 Proposed Budget	Percentage Change
Benchmark oil price	US$57 per barrel	US$28 per barrel	US$40 per barrel	43%
Oil production volume (bpd)	2.18 million	1.80 million	1.86 million	3%
Average exchange rate	₦305/ US$1	₦360/ US$1	₦379/ US$1	5%
GDP Growth rate (%)	2.93	-4.42	3	168%
Capital expenditure	₦2.46 trillion	₦2.49 trillion	₦3.60 trillion	46%
Statutory transfer	₦0.56 trillion	₦0.43 trillion	₦0.48 trillion	13%
Debt service (inclusive of sinking fund)	₦2.73 trillion	₦2.95 trillion	₦3.34 trillion	13%
Recurrent expenditure (non-debt)	₦4.84 trillion	₦4.94 trillion	₦5.65 trillion	14%
Total revenue	₦8.42 trillion	₦5.84 trillion	₦7.89 trillion	35%
Total expenditure	₦10.59 trillion	₦10.81 trillion	₦13.08 trillion	21%
Fiscal deficit	₦2.17 trillion	₦4.98 trillion	₦5.20 trillion	4%

_{Source: Ministry of Budget and National Planning; 2020 Appropriation Act}

The 2021 Budget, which has been themed the “Budget of Economic Recovery and Resilience”, is designed to deliver on the Government’s Economic Sustainability Plan goals, accelerate the pace of Nigeria’s economic recovery, promote economic diversification, enhance competitiveness and ensure social inclusion.

The President used the opportunity of the 2021 Budget presentation to announce the preparation of the Finance Bill, 2020 by the Honourable Minister of Finance, Budget and National Planning for passage with the 2021 Appropriation Bill. The Finance Bill, 2020 will seek to support the realization of the 2021 revenue projections, adopt appropriate counter-cyclical fiscal policies and enhance the efficiency of fiscal incentives.

We will publish our 2021 Budget Newsletter after the Honourable Minister of Finance, Budget and National Planning submits the detailed budget.

For further enquiries, please contact:

Wole Obayomi

ng-fmtaxenquiries@ng.kpmg.com