The Senate has passed the revised 2020 budget of N10,805,544,664,642 that was sent by President Muhammadu Buhari. The members of the upper legislative chamber passed the budget during plenary on Thursday, a day after members of the House of Representatives approved the same figure.
A breakdown of the figure shows that the sum of N2,488,789,433,344 is for capital expenditure and recurrent non-debt expenditure has N4,942,269,241,984.
The executive also allocated N422,775,979,362 for statutory transfer, while N2,951,710,000,000 was budgeted for debt service.
In the same vein, N500 billion was earmarked as intervention funds for the fight against COVID-19, while the health sector got N186 billion allocation.
The budget report was presented by the Chairman of the Senate committee on appropriation, Jibrin Barau, during the plenary sessions at the senate.
The review of the budget was necessitated by the impact of the COVID-19 which has adversely affected the oil price and by extension the revenue projections of the government.
The passed 2020 revised budget is N300 billion more than the revised budget plan that was originally submitted by President Buhari. It also increases the projected oil price by $3 per barrel, which is from $25 per barrel to $28 per barrel.
The spending plan must now be sent back to the president for his accent after he might have been satisfied with what was passed by both chambers of the national assembly.
Lack of vaccine access will reduce Africa’s economic growth compared to rest of world – IMF
IMF forecasts that Nigeria is expected to grow by 2.5% in 2021 and 2.3% in 2022.
The International Monetary Fund (IMF) has stated that a continued lack of access to vaccines will see Africa’s projected growth at 3.4% compared to the rest of the world at 6%.
The IMF disclosed this in its Regional Economic Outlook for Sub-Saharan Africa, April 2021, which was published on Thursday.
What the IMF said
- Despite turning out better than expected, growth in 2020 is estimated to have been the worst on record at –1.9 %, leading to a sharp spike in poverty.
- In 2021, the region’s economy is expected to resume expansion at 3.4%, weaker than the 6% for the rest of the world, amid a continued lack of access to vaccines and limited policy space to support the crisis response and recovery.
- Macroeconomic policies will in many countries entail some difficult choices. Saving lives remains the first priority, which will require access to affordable vaccines, ensuring that the logistical and administrative prerequisites of vaccination rollouts are in place, targeted containment efforts, and added spending to strengthen local health systems.
The IMF urged that African leaders needed to create more fiscal space and implement transformative reforms to unlock economic growth. These include mobilizing domestic revenue, strengthening social protection, promoting digitalization, and improving transparency and governance.
The body added that the need for reforms is to reduce debt and find a sustainable footing which would be a catalyst for longer-term growth and provide opportunities for the region’s new job seekers.
On growth projections
- IMF forecasts that Nigeria is expected to grow by 2.5% in 2021 and 2.3% in 2022.
- South Africa is expected to grow by 3.1% in 2021 and 2.0% in 2022.
- Kenya is expected to have higher growth at 7.6% in 2021 and 5.7% in 2022.
- Meanwhile, Ghana is forecasted to grow by 4.6% in 2021 and 6.1% in 2022.
In case you missed it
Nairametrics reported earlier this month that the International Monetary Fund had lifted its global growth outlook to 6% in 2021 (0.5% point upgrade) and 4.4% in 2022 (0.2 percentage point upgrade), after an estimated historic contraction of -3.3% in 2020, due to the effects of the COVID-19 pandemic.
Money Printing: Emefiele threatens to recover budget support loans from state govts
Godwin Emefiele has threatened to recover intervention loans extended to State Governors
Central Bank Governor, Godwin Emefiele has threatened to recover intervention loans extended to State Governors following remarks made by Edo State Governor Godwin Obaseki that the government had printed N60 billion to fund government expenditure.
In response to the question asked by Journalists, Emefiele remarked:
“In 2015, 2016 the kind of situation we find ourselves now, which is even worse than 2015 2016, we did provide budget support facility for all the states of this country, that loan remains unpaid till now and we are going to insist on the states paying back those monies going forward since they are accusing us of giving them loans.”
The comments appear to be a threat to State Government that the Central Bank will call back loans issued to state governments which could perhaps mean deducting the loans from the monthly Federal Allocations shared between States and Federal Government.
States and Federal Government have faced severe economic challenges over the last year as Covid-19 Pandemic and the fall in oil prices hurt government revenues. To continue running the government, the central bank lent trillions of naira to the Federal and State Government through several intervention funds often backed by the Ways and Means provisions which allow the apex bank to lend money to the government.
Godwin Obaseki told his state transition committee members
”When we got FAAC for March, the federal government printed an additional N50-N60 billion to top-up for us to share. This April, we will go to Abuja and share. By the end of this year, our total borrowing is going to be between N15 and N16 trillion. Imagine a family that is just borrowing without any means to pay back and nobody is looking at that, everybody is looking at 2023, everybody is blaming Mr. President as if he is a magician.”
The Finance Minister chastised the governor for making such a comment explaining that
“The issue that was raised by the Edo State Governor for me is very, very sad Because it is not a fact….When we got FAAC for March, the federal government printed an additional N50-N60 billion to top-up for us to share. What we distribute at FAAC is revenue that is generated and in fact distribution revenue is public information. We publish revenue generated by FIRS, the customs, and the NNPC and we distribute at FAAC. So, it is not true to say we printed money to distribute at FAAC, it is not true,” Zainab Ahmed
Emefiele also attempted to explain the concept of printing money and at some point confused it with lending money. “If you understand the concept of printing of money. Printing of money is about lending money, that is our job. To print is about lending money”
“Money Printing” in economic terms is also referred to as quantitative easing and occurs in a period of a recession or economic crunch. Central Banks pump money into the economy by either buying bonds or crediting the accounts of banks or the government in the hope that this will spur economic growth. The money is often repaid via tax receipts when the economy recovers. The United States recently doled out over 1 trillion to Americans to help them recover from Covid-19.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- CSCS Plc posts profit after tax of N6.93 billion in FY 2020
- BUA Cement Plc announces Board Meeting
- Infinity Trust Mortgage Bank Plc records a 60% increase in profit after tax in Q1 2021.
- Tantalizers Plc reports a loss after tax of N422.05 million in FY 2020.
- NASD Plc announces admission of newly demutualized NGX shares.