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October 25, 2020

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The Federal Ministry of Finance, Budget and National Planning will get the lion’s share of the 2021 federal budget if lawmakers accept the proposals from the executive arm of government.

This is contained in the details of the budget proposal published on the website of the Budget Office of the Federation.

The proposed appropriation includes a total of N615.3 billion for personnel expenses; about N3.66 trillion for overheads, and about N1.13 trillion for capital expenditure.

Breakdown

A breakdown of the various allocations showed that the Federal Ministry of Finance, Budget, and National Planning headquarters was allocated N230.4 billion; Office of the Accountant-General of the Federation (N4.85 billion); the Budget Office of the Federation (N2.144 billion); Investment and Securities Tribunal (N618.3 million) and Service Wide Vote (N1.66 trillion).

Other allocations include to the National Bureau of Statistics (N6.69 billion); Pension Transitional Arrangement Department (PTAD) Headquarters (N2.82 billion); Centre for Management Development (N 2.24 billion) and Nigeria Institute of Social and Economic Research (N1.552 billion).

Apart from the provision of N2.16 million to each of the 37 Federal Pay Offices along with seven other zonal offices across the country, another N3.24 million was allocated to the Federal Treasury Academy, Orozo in Nasarawa State for the financial year.

Indications are that the 2021 appropriation would become one of the few years the budgetary provision for a ministry like that of finance would surpass that of the defence ministry.

Why the lion’s share

A closer review of the provisions revealed that the appropriation for the finance ministry was raised by the high provision in the budget for debt service and settlement of outstanding obligations to the Nigerian Bulk Electricity Trading (NBET).

Although the federal government recently announced the removal of subsidy on electricity, the electricity distribution companies (DISCOs) say over N700 billion shortfall (subsidy) is still outstanding against the government.

The shortfall, the DISCOs argue, was as a result of the government not allowing a review of electricity tariff since 2016.

Out of the total N13.08 trillion expenditure outlay in the 2021 Budget presented by President Muhammadu Buhari to the joint session of the National Assembly last Thursday, N3.124 trillion has been set aside for debt servicing and N5.65 trillion for non-debt recurrent costs.

While the Debt Management Office (DMO) was allocated about N3.35 trillion for overheads, or over 62 per cent of the total budgetary allocation for the entire ministry, 43 Federal Pay Offices and the Federal Treasury Academy, Orozo, got N96.12 million for Overheads.

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The NBET got an allocation of N152.42 billion as capital for the settlement of accumulated deficit commitments under the Power Sector Reform Programme.

Of the total allocation to the DMO, PREMIUM TIMES gathered that apart from N220 billion expected to go into the Sinking Fund, about N3.12 trillion would be for public debt charges, consisting N2.18 trillion for interest on internal public debts and N940.89billion for interest on external public debts.

Service-wide allocations

Under the service-wide vote, key provisions include N100 billion for the various zonal intervention projects, in addition to N20 billion for special intervention programmes/projects; payment of local contractors’ debts (N15 billion), and recapitalisation of Development Finance Institutions (DFIs) N15 billion.

The Presidential Amnesty Programme was allocated N65 billion, while Operation Lafiya Dole and other contingency operations of the armed forces were allocated N100 billion.

The Presidential Enabling Business Environment Council (PEBEC) was allocated N1 billion; refund to the Asset Management Company of Nigeria (AMCON) N16.7 billion; refund for the acquisition of Yola DISCO N16.7 billion; provision for outstanding pension obligations to workers of some defunct privatised agencies (N20 billion); Nigeria Airways ex-workers benefit N5.75 billion, and N5 billion for the settlement of MDAs’ electricity bills.



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