Federal Government on Friday commenced the process that will lead to the 2021 budget through an online press briefing by Minister of Finance, Budget and National Planning, Zainab Ahmed.
She unveiled a proposed Medium Term Expenditure Framework, which showed that the size of the budget would be N11.86 trillion.
According to her, projected revenue from every source is N6.98 trillion while a fiscal deficit of N5.16 trillion was being envisaged.
“The World Bank forecasts that crude oil prices will rise gradually from an average of $42 per barrel in 2021 to $44.5 per barrel in 2022, and $47 per barrel in 2023,” she said.
With this in mind, Ahmed and her team have proposed a crude oil budget benchmark of $40 per barrel for 2021.
She said achieving fiscal sustainability and macro-fiscal objectives of government will require bold, decisive and urgent action.
“Thus, key reforms will be implemented with increased vigour to improve revenue collection and expenditure management,” she added.
According to her, external reserves declined to $36.38 billion as at June 20 from $45.12 in June 2019 due to sharp decline in crude oil prices.
On human capital development, Ahmed disclosed that Nigeria ranked 150 of 157 countries in 2018 and that COVID-19 pandemic will further worsen the situation.
Although Nigeria’s total production capacity is 2.5 mbpd, current crude production is about 1.4mbpd (in compliance with the OPEC+ production quota), and an additional 300,000 barrels per day of condensates, totalling about 1.7 million barrels per day.
With oil price projected to remain low and volatile in 2020, and Nigeria’s compliance with the OPEC+ cuts by reducing base production to between 1.412 mbpd and 1.579 mbpd from June to end of the year, growth in oil GDP is expected to decline in 2020.
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