During a meeting on Monday (22nd February) between the Leadership of the National Assembly and Ministry, the Minister of Finance, Budget and National Planning Zainab Ahmed, gave a brief on the efforts of the Federal Government that helped the country exit recession in the fourth quarter of this year. She also revealed that certain COVID-19 setbacks dropped the government’s revenue last year by sixty-five percent (65%).
She said that the government spent more than was budgeted for on debt servicing for both local and foreign debts in 2020 by about two percent.
The minister also stated that the challenges in 2020 played a major role in the disruption of the micro-economic development of the country as well as affecting the government revenue, with crude oil prices crashing to as low as $20 from $72 per barrel.
Senate President Ahmed Lawan and Speaker Femi Gbajabiamila who were present attributed the country’s freedom from recession to the harmony and cooperation between the Executive and Legislative Arms of Government. The Senate President went ahead t commend roles of the fiscal, monetary, and trade authorities.
According to the Minister of Finance;
“Another key development for Nigeria was the massive output cut by OPEC in the international market, which was designed to stabilise the crude oil market prices. This meant that the 2020 budget had to be revised. The impact of this development is that revenue went down by about 65 percent.”
The effect was that our country went into recession in the third quarter. However, due to the significant stimulus as well as other interventions by the fiscal, monetary and trade authorities, a mild recovery has been recorded in the fourth quarter of 2020 with a positive growth of 0.11 percent. This means that the country has technically exited recession as we had projected.
Oil price was fixed at $28 per barrel; oil production was 1.8 million barrel per day, but the performance was 1.7 million barrel per day. Exchange rate was set at N360, but we closed the year at N375.”
Speaking on inflation, she revealed that it was targeted at 14.13%, but the year ended with it at 14.89%.
She went ahead to say, “GDP growth rate was targeted at 4.2 per cent negative growth, but we were able to improve on that and at the end of 2020, it was -1.9 per cent.”
She added that as at the end of 2020, Federal Government’s retained revenue was N3.94 trillion, representing 73 percent of targeted revenue.
The federal government share of the revenue, Ahmed explained, was N1.5 trillion which represents 157 per cent performance over and above the target.
This, she explained, was because crude oil prices performed better than the projection.
Zainab added that, “Non-oil revenue collection stood at 79 per cent, Company Income tax and VAT performed at 82 per cent and 68 per cent respectively. Customs revenue collection was 79 per cent. Considering the challenges of the year, this is a good performance; in fact, this performance is higher than previous years.”
The Minister spoke on government’s expenditure during the year: “The N9.97 trillion amended estimate (excluding government funded enterprises) performed at 102 per cent. This means that there was two per cent spending above what was appropriated. This spending arose specifically because of a higher debt service repayment for both local and external debt.
As at the end of the year, we had N1.7 trillion that has been released as capital expenditure, representing 89 per cent of the capital expenditure. The extension granted by the National Assembly enabled the Ministries, Departments, and Agencies to implement the capital budget up to 100 per cent of the amount that has already been released to them.
The extension meant that agencies could continue to spend the money that has been released to them. Wed have made an assessment and as at the end of the first week of February, I am afraid to report that the performance report of the extended amount was averaging about 30 per cent. We are going to make another assessment by the end of February”.
She revealed that as of December 2020, the government had released about N115 billion for COVID 19 expenditure and assured that more details will be provided on that.