Nigeria will not apply for debt relief to get out of its crippling N31 trillion debt burden, according to Finance, Budget and Planning minister.
Mrs. Zainab Ahmed gave the government’s position on Tuesday in Abuja during the public presentation of Budget 2021.
The International Monetary Fund (IMF) is currently pushing for debt relief for low income countries.
Mrs. Ahmed said the government is not considering such option at this time.
According to her, many loan agreements have been entered with various lenders, adding that asking for debt relief would portend Nigeria in the eyes of its creditors as a country that cannot repay its debts.
The minister also defended the 2021 budget deficit, which exceeds the Fiscal Responsibility Act threshold of three per cent.
President Muhammadu Buhari had presented a budget proposal of N13.08trillion up by 22.9 per cent from the N10.8trillion 2020 budget, with revenue projected at N7.5trillion.
The budget deficit is projected to grow by N5.21trillion made up of Government Owned Enterprises and project-tied loans thus representing 3.64 percent of the budget size.
The N5.21trillion budget deficit exceedes the three per cent threshold prescribed by the FRA 2007 for the annual budget.
President Buhari had proposed N13.08trillion expenditure comprising: Capital Expenditure of N3.85trillion, Non-debt Recurrent Costs of N5.65trillion; Personnel Costs of N3.76trillion; Pensions, Gratuities and Retirees’ Benefits of N501.19billion; Overheads of N625.5billion; Debt Service of N3.124trillion; Statutory Transfers of N484.49billion; and Sinking Fund of N220billion (to retire certain maturing bonds).
Former Vice President, Alhaji Atiku Abubakar, had on Saturday faulted the 2021 budget saying that it contravenes the Fiscal Responsibility Act. According to the former Vice President, “the budget deficit in the proposal is N5.21trillion. This amount is just over 3.5 per cent of Nigeria’s 2019 GDP. This is contrary to the Fiscal Responsibility Act of 2007.”
Responding, Mrs Zainab Ahmed said that although the 2021 budget deficit exceeded the three per cent threshold, the government has not breached the law.
She said that there is a provision in the Fiscal Responsibility Act that allows the government to surpass the threshold during “unusual times.”
The finance minister noted that since the country is battling the negative impact of Coronavirus pandemic and faced with the threat of economic recession, there is need to exceed the threshold to save the economy from collapse.
The Federal Government has also vowed that the era of budget delay when the Executive presented the budget and the National Assembly passed it late is over.
Director-General of the Budget Office of the Federation, Ben Akabueze made this vow during the public presentation of the 2021 budget.
According to him, “in recent times, there have been disagreement between the executive and the National Assembly over the passage of the annual Federal Government budget. As a result of the power tussle between the executive and the legislature, the budget implementation has always commenced very late into the year”.
Akabueze said, “we have put behind us an era of delay in the presentation of the budget. We ve committed ourselves to the open government principles and we have seen improvement in our budget indices. We are working on a budget that works for the people.”
Some of the selected aviation projections in the 2021 budget are: N5 billion for safety and Security of critical projects and airport certification Nationwide; N14 billion for construction of Second Run-Way at Nnamdi Azikiwe International Airport Abuja; N1.6 billion Extension and asphalt overlay of MMIA runway; N1 billion Construction of new terminal building in Enugu; N1billion Construction of Abeokuta airstrip.
Under rail for 2021 there are, N71.15 billion for counterpart funding for Railway projects including: Lagos-Kano (Ongoing); Calabar-Lagos (Ongoing); Ajaokuta-Itakpe-Aladja (Warri ) (Ongoing); Port Harcourt- Maiduguri; Kano-Katsina-Jibiya-Maradi In Niger Republic (New); Abuja-Itakpe and Aladja (Warri)-Warri Port and Refinery /Warri New Harbour.
For power, there will be N3billion for Rural Electrification access program in federal universities; N160.83 billion for multilateral and bilateral funded projects (Zungeru, NEP, Abuja Power Feeding scheme, Transmission Access Project etc) and N200 million counterpart fund for the Mambilla Hydro Power project.
For health there will be N35.03 billion Provisioned for the implementation of the National Health Act (BHCPF); N45.19 billion provided for GAVI/Immunization; N2.32 billion for Polio Eradication Initiatives; ¦ 4.17 billion for the procurement RI & non-Polio Vaccine and operational cost; and N2.65 billion for expanded midwives service scheme.
Housing in 2021 will receive N2.65 billion for provision of Infrastructure and services for Housing Programmes Nationwide; N20 billion for Social Housing Scheme (Family Homes Fund); N2.14 billion for Prototype Housing scheme in Niger and Lagos state; and N17.13 billion for FGN National Housing Programme Nationwide.
Education in 2021 will receive N70.1 billion Provided for Universal Basic Education (UBEC); N3 billion Provision of Security Infrastructure in 104 Colleges and N1.43bn for classroom/hostel rehabilitation & furnishing. N1.3 billion for take off grant for the establishment of 6 Federal Science & Technical Colleges (FSTCs); about N4.47 billion for various Scholarship allowances; and N2 billion for payment of 5,000 Federal Teachers Scheme Allowance.
– The Nation