SWITZERLAND, OCTOBER 08 – President Muhammadu Buhari has presented the 2020 appropriation bill, which contains the federal government budget for the year 2020 to a joint session of the National Assembly on Tuesday, October 08, 2019.
Today’s Echo gathers that the Appropriation Bill is called a budget of fiscal consolidation.
After deliberations on the establishment of the National Oil and Gas research centre and museum at Oloibiri, Delta State, the Senate moved to the House of Representatives Chamber for a joint address by Mr President.
In his address, the president said the sum of 8.15 trillion is projected as government revenue in 2020.
These are broken down into:
- Oil: 2.64 trillion
- Non-oil: 1.81 trillion
- Others: 3.7 trillion.
Explaining the increase in Value Added Tax(VAT), which is now 7.5 per cent from 5 percent, the president said additional revenues will be used to fund health, education, and infrastructure programs.
While evaluating the performance of the 2019 budget, the president said:
” The 2018 capital budget was implemented till June 2019, while the sum of N294.6 billion has been released for capital projects under 2019 budget, as of September 30, 2019.
“I have directed the Federal Ministry of Finance to release additional 600 billion Naira for capital by end of 2019.”
…” Infrastructure Tax Credit Scheme launched in January 2019, has already attracted over 200 billion Naira in private capital into reconstruction of ~800km of Federal Roads, across all 6 geopolitical zones,”president Buhari added.
The 2020 appropriation bill is predicated on the following parameters:
- Benchmark Oil Price : $57
- Production: 2.18m bpd
- FX: N305/$
- Proposed Increase of VAT from 5% to 7.5%
Further addressing the proposed increase in VAT, the president said:
” Based on new VAT rate, revenue generation will be increased and will be used to fund education, health and infrastructure. The VAT Act already exempts Pharmaceuticals, Educational items and basic commodities. More items to will be added to the exemptions.”
” The threshold for VAT registration according will be raised to N25m turnover per annum, to bring relief to small businesses,”- President Buhari added.
Remarking on the country’s external reserve, the president said:
“Nigeria’s External reserves have gone up from $23bn in Oct. 2016 to $42bn in Sept 2019.”
Meanwhile, Capital inflow into Nigeria at the end of the first quarter of 2019 stood at $14 billion as against $12 billion within the same period in 2018.
The president gave a new directive before wrapping up at the National Assembly.
“By end of October, 2019 agencies must obtain approval before embarking on a new recruitment exercise or face sanctions,” he said.