The Nigerian Senate has increased the proposed 2020 budget to N10.729 trillion from the initial N10.002 trillion. This was disclosed at the Senate on Thursday while the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) was being passed.
Also, the Senate approved all the 16 recommendations contained in the report of the National Assembly joint committee on Finance and National Planning, on the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Further details: In a similar fashion, the Senate also increased the oil benchmark from $55 per barrel to $57 per barrel, representing a $2 increase. The 2020 revenue target for Nigerian Customs Service was also increased by N557.4billion, from N942.6 billion to N1.5trillion.
Meanwhile, the Senate retained the exchange rate at N305 per dollar and oil production benchmark at 2.18mbpd as proposed in the MTEF/FSP by the executive.
On debt, the Senate committee recommended the adoption of N1.5 trillion as the amount for new borrowing by the Federal Government in 2020. The Committee further called for an urgent review and amendment to the Fiscal Responsibility Act (FRA Act) and the various laws of the revenue-generating agencies to align with current realities.
The Committee’s recommendations approved by the Senate reads:
“The Committee recommends the adoption of $57/barrel as the crude oil benchmark price for the fiscal year 2020.
“The Committee recommends the adoption of N1.5 trillion as the amount for New Borrowing as a result of reduction of N200 billion which was sourced from the increase of revenue target of the Nigeria Customs Service.
[READ: FG to borrow N1.7 trillion to finance 2020 budget – Finance Minister]
“The revenue target of Nigeria Customs Service (NCS) of N942.6 billion for 2020 should be increased to N1.5 trillion, as a result of the performance of NSC in the last 9 months with 3 months still outstanding.
“The NCS revenue as of September stood at N1 trillion against the budget figure of N969. 8 billion for the year 2019. The Joint Committee commends the NCS for exceeding the targeted revenue despite the global economic challenges and closure of the Nigerian borders.
“The sum of N557.4 billion from the revenue increment of NCS be used to reduce borrowing by N200 billion and increase capital expenditure thereby decreasing the size of the budget deficit from N1.7 trillion to N1.5 trillion and also increase the total capital available to MDA by N357 billion, from N1.01 trillion to N1.367 trillion”
Increasing Revenue: While making a recommendation on increasing revenue, the committee stated that proper investigation must be carried out on the e-collection stamp duties domicile with the Central Bank of Nigeria for the past years. According to the committee, this is necessary so as to show probity and accountability, and of course, increase the revenue base of the country.
However, the committee stated that the N1.5 trillion borrowing must be project tied and the federal government must remain focused and ensure that it used to fund critical projects that will increase productivity and contribute to finance financing such debt.
[READ FURTHER: Senate rejects VAT increase, proposes 9% tax on SMS, Data usage, others]
Another trend? The increase in the 2020 budget by the National Assembly appears to have now become a trend as the National assembly also increased the 2019 budget before the final approval. As published on Nairametrics, the 2019 budget was raised from N8.906 trillion to N8.916 trillion.
