The Senate has approved the Federal Government’s plan to borrow as much as N4.28 trillion ($11 billion) from both domestic and foreign debt sources, in order to help fund its expenditure in 2021.
The members of the upper chamber gave the go-ahead on Wednesday, October 7, 2020, after debating the government’s Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) covering the next 3 years (2021 – 2023).
The lawmakers maintained the crude oil benchmark price of $40 per barrel, with daily crude oil production output at 1.86 million barrels per day for 2021, 2.09 million barrel per day for 2022, and 2.38 million barrel per day for 2023.
While submitting their report on the floor of the Senate, the Chairman of the National Assembly joint committee on finance, Senator Adeola Olamilekan, said that the adopted daily production output is due to average 1.97mbpd over the past 3 years and the fact that a very conservative oil output benchmark has been adopted for the medium term, in order to ensure greater budget realism and take into consideration disruptions caused by attacks/sabotage in the Niger-Delta, which has substantially dropped recently.
Their decision is coming barely 7 days after the House of Representatives announced largely similar decisions.
It can be recalled that President Muhammadu Buhari had announced that he would formally present the 2021 budget proposals to a joint session of the National Assembly on Thursday, October 8, 2020.
The proposed budget provides for an estimated deficit of N5.16 trillion and total expenditure of N13.08 trillion. The government has retained an official exchange rate of N379/$1 to the dollar, given the determination of the Central Bank of Nigeria to pursue the unification of exchange rates.
Debt service is projected to take N3.12 trillion, slightly less than the N3.58 trillion planned for infrastructure development.