Thread by @BudgITng

10 Things We Learnt About #2020BudgetNG

1. Can Nigeria double its revenue in two years? Total revenue projections of N8.15tn are overly optimistic.

FG is projecting N8.15trillion for the total revenue. As of June 2019, the revenue performance for #2019Budget is about 58% ...

This is due to the underperformance of both oil and non-oil revenue sources. Oil revenues were below target by 49% as at June 2019. FG has only realised N2.04tn as of June 2019.

#BudgITExplains #2020BudgetNG

2. Apart from oil and non-oil revenue targets, FG sets one-off revenue targets and does not meet them.

According to the 2020 proposed budget, FG projects about N3.7tn as other revenue. We realised that FG uses “other revenues” to pad the revenue numbers...

In the last three years, no amount has been realised from asset recoveries, signature bonus, stamp duty and others. Will 2020 be different?

#BudgITExplains #2020BudgetNG

3. Businesses with N25bn turnover have tax exemption.

According to Taiwo Oyedele, “firms that make N25m or less are only exempted from charging VAT, but have to pay VAT whenever they make purchases” i.e. MSMEs will bear the cost of production like other orgs but not charge VAT.

4. As FG targets N600bn increase due to minimum wage review, its statement on IPPIS coverage is in order.

In 2006, FG started the roll-out of IPPIS to properly document FG workers. This has dragged on for too long but has the capacity of reducing ghost workers in FG service.

5. Nigeria's oil production not price is the way.

FG projected that oil will sell at US$57 per barrel; and oil production will hit 2.18m bpd. However, oil production was an average of 1.86m bpd as at June 2019...

With emerging fields, Nigeria can meet production quota but Nigeria is also restricted by further production due to the OPEC quota. We don’t expect more than 1.9m barrels per day (excluding condensates - light oil).

#BudgITExplains #2020BudgetNG

6. We cannot "budget" our way to plug the infrastructure gap. We need a varied approach.

Capital spending as a % of FG's total Expenditure hit a marked high of 22.28% in 2017. BUT...

As recurrent figure of the budget grows due to implementation of minimum wage & expanding debt service costs, will Nigeria be able to spend more on capital items?

FG capital expenditure has slowed from 2017 and even lower in actual terms. How do we plug infrastructure deficit?

7. Independent revenue agencies can do more with better efficiencies.

FG is budgeting to raise N849.96bn from independent revenue agencies. However, it only realised N454bn in 2018. FG has over 100 agencies that generate revenue and they can actual do more!

#BudgITExplains

8. Statutory Agencies still have no details.

Nigerians have been asking @nassnigeria and other statutory agencies of govt to open up their budget so that everyone can know the full details of what they're spending public money on...

At the peak of their failure to do this, these agencies have a lump sum of money totalled about N556.7bn allocated to them in the budget without details.

#BudgITExplains #2020BudgetNG

9. Debt servicing is increasing astronomically

The cost of servicing debt is increasingly becoming unavoidable for Nigeria. A total of N2.15 trillion was spent in 2018 servicing debt and N2.14trillion budgeted for 2019...

In the 2020 proposed budget, the federal government has projected the sum of N2.45tn to service debt which is about 23.7% of the total expenditure. Nigeria now spends more debt servicing than capital expenditure.

#BudgITExplains #2020BudgetNG

10. The Budget still has elements of waste in the 2020 projected budget as the recurrent expenditure that has grown over the years is not reducing. However, several capital items in the budget are not specific neither are they needed considering the revenue crunch.

Below, to cap this thread, are examples of items in the budget without specific detail or do not have a direct impact on the general citizens.

#BudgITExplains #2020BudgetNG