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Budget 2021

2021 Appropriation Bill


Budget 2021: Budget of Economic Recovery and Resilience

Nigeria's President, Muhammadu Buhari presented the 2021 Budget on 8 October 2020, to the Joint Session of the National Assembly. 

Highlights

  • The 2021 budget has a deficit of about N5.20tn approximately 3.64% of GDP. This is above the 3% threshold set by the Fiscal responsibility Act due to the economic challenges attributable to COVID-19.
  • The deficit is expected to be financed by new borrowings, privatisation proceeds and drawdown on loans secured for specific projects.
  • Non-debt recurrent expenditure includes N3.76tn relating to personnel costs, which constitutes the largest expense item. The President announced steps to improve expenditure efficiency including full implementation of the Integrated Personnel Payroll Information System (‘IPPIS’) platform for salary payments, and ensuring that Government Owned Enterprises obtain approvals before carrying out recruitment exercises.
  • The capital expenditure budget of N3.85tn represents an increase of about 43% compared to 2020, and about 29% of total 2021 expenditure. The President indicated that there will be focus on completing ongoing projects across different sectors

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Key takeways:

Revenue generation remains a challenge in the face of falling oil prices and economic contraction, especially as a result of the COVID-19 pandemic. Key concerns include the growing budget deficit and rising debt.

The focus on capital expenditure is expected to create the enabling environment and infrastructure for businesses to thrive and stimulate economic activities.

The annual presentation of Finance Bills and the introduction of Tax Expenditure Statement indicates government’s increased focus on taxation and fiscal policies. 

 

 

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