By Emma Ujah, Abuja Bureau Chief
The Federal Government 2020 budget recorded very low revenue inflows which resulted in a huge deficit that hit N6.598 trillion at the end of the budget implementation on May 31, 2021.
According to the Fourth Quarter and Consolidated 2020 Budget Implementation Report seen by Vanguard, “overall, a total of N6,598.96 billion deficit was recorded in 2020, representing a budget-to-GDP ratio of 4.33 per cent which is above the target rate of 3.30 percent.”
It said the execution of the 2020 budget was challenging due to the impact of COVID-19 which led to the collapse of the global economy and resulted in the revision of the budget.
The report said: “Despite these challenges, the government was able to deliver N1,949.94 billion capital expenditure under the 2020 budget by the end of May 31, 2021.
“This considerably contributed to the positive GDP growth recorded in the last quarter of the year. The extension of the 2020 capital budget to May 31, 2021, was to enable MDAs complete all outstanding procurement processes and utilize the funds allocated and released to them for their 2020 capital projects/programmes.”
N3. 418 trn revenue
Budget revenue projections of the federal government based on the amended 2020 Budget Framework was N5.365 trillion, indicating a quarterly estimate of N1.341 trillion.
However, the total revenue inflow of the Federal Government stood at N3.418 trillion as at the end of December 2020, representing a N1.947 trillion (36.29 percent) shortfall from 2020 annual budget estimate.
A total of N9.973 trillion (excluding GOEs Budget & Project-tied Loans) was appropriated for expenditure in the 2020 amended budget. This comprised N4.633 trillion (46.46 percent) for Recurrent (Non-Debt), N2.951 trillion (29.59 percent) for Debt Service, N428.03 billion (4.29 percent) for Statutory Transfers and N1.960 trillion (19.65 percent) for Capital Expenditure.
The implementation report indicated that a total of N4.645trillion was spent in the year 2020 as recurrent expenditure. This indicated a decrease of N297.07 billion (6.01 percent) below the annual estimate of N4.942 trillion.
On the other hand, a total of N1.960 trillion (excluding capital expenditure in Statutory Transfers, and those of the top 10 GOEs and project tied loans) was allocated to capital spending in the 2020 Budget. Capital budget implementation was put at N1. 949 trillion.
The report stated further: “An analysis of the data from the Office of the Accountant General of the Federation on 2020 capital performance for MDAs as at March 31, 2021, showed that a total of N1,949.94 billion was released and cash backed to MDAs for their 2020 capital projects and programmes.”
The details of the releases showed that: the sum of N500.44 billion was released as first releases; N290.49 billion as second releases; N212.88 billion as third releases; N294.22 billion as fourth releases; N43.01 billion as additional releases, N350.36 billion as online Authority to Incur Expenditure (AIEs) and N258.54 billion as Manual AIEs.
On debt servicing, the report showed that a total of N1. 873 trillion was proposed for FGN domestic debt service in 2020, while ¦ 1.871 trillion was actually spent, representing a difference of N1.40 billion (0.07 per cent) from the annual projection.
Similarly, a total of N805.47 billion was projected for the service of external debt in 2020, while N553.18 billion ($243.88 billion) was used, indicating a difference of N252.29 billion (31.32 per cent) from the annual estimate.