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Nigeria’s 2021 budget outlines a deficit of N5.60 trillion, which reflects as 3.93% of the Gross Domestic Product, GDP. The FG has established that the deficits will be financed by borrowing – domestically and internationally.
The minister for finance, Zainab Ahmed has revealed the Central Bank of Nigeria, CBN lent the federal government the sum of N2.8 trillion in 2020 by Ways and Means, without a mention of repayment. She did, however, mention that there are other plans in place in regards to the debt.
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The CBN is less likely to provide funds for the budget deficit in 2021 through its Ways and Means agenda.
This is a CBN bill which allows the government to borrow from the bank. However, the bill, requires the government to pay back by the end of the year before it can acquire another loan from the CBN
Addressing revenue leakages for the 2021 budget
The minister had explained a 27% shortfall from 2020 budgeted revenue with only N3.9 trillion actualized out of 5.3 trillion. It plans to avoid shortfalls in 2021, but most importantly, to address revenue leakages.
According to the public presentation of 2021, FGN Approved Budget Breakdown & Highlights, its strategy to achieving this include:
- Conclusion of the service-wide implementation of IPPIS.
- Dimensioning cost of tax waivers and promoting policy dialogue and transparency around tax waiver regimes.
- Elimination of regressive subsidies for petrol price and electricity tariffs.
- Cost-to-income-ratio cap for Government-Owned Enterprises with a view to improving remittances to FGN’s coffers.
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There is now an option of participating in enhancing budget implementation monitoring through the citizen’s budget monitoring app (available on the google play store).
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