Nigerian Senate to consider the 2021 federal budget
The Nigerian Senate will meet today to pass the country’s 2021 federal budget.
The proposed budget consists of $20 billion in revenues and $33 billion in expenditures, with the ensuing fiscal deficit financed through domestic debt issuance and privatisation of public institutions. Notably, non-oil revenue projections in the budget have decreased by 46.8% from previous targets, as the federal government considers the pandemic’s -6% GDP effect on Nigerian businesses. This budget will mark a $5.75 billion increase over the previous proposal, which mainly focused on advancing the government’s post-pandemic Nigeria Economic Stability Plan (NESP).
Nigeria has struggled to address the public health aspects of the COVID pandemic. However, Abuja has made strides towards providing financial assistance through 50% tax rebates to businesses and cash transfers for the nation’s 87 million people living below the $1.90 per day poverty line. Lacking a robust national communication system, the government is allocating $330 million for technology acquisition to enable the implementation of the NESP.
If the government, in conjunction with international economic assistance, can effectively provide more robust economic aid, it is likely that Nigeria will be able to close 2021 with a relatively competitive economy, stronger credit rating and lower unemployment.
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