2021 Budget: Works, Housing, Power, Get Highest Allocation As FG Releases Expenditure Ceiling 

The Ministries of Works and Housing, Power , Transportation and Defence are to get the highest capital allocation in the 2021 Federal Government budget, analysis of the Budget Call Circular has revealed.

The 2021 Call Circular sets out the requirements and instructions that must be satisfied and followed in the preparation of the 2021 Federal Government Budget Proposal

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The preparation of the budget estimates for Ministries, Departments and Agencie is to take into consideration the 2023 Medium Term policies/strategies contained in the 2021 Expenditure Framework and Fiscal Strategy Paper which is the Federal Government’s pre-budget statement.

The MTEF/FSP outlines the development priorities of the FGN for the period covered.

Further to this, the Federal Government’s annual budget is being prepared using the Zero-Based Budgeting approach and in line with the government’s policy thrust, as articulated in the Nigeria Economic Sustainability Plan as well as other relevant circulars.

Details of the capital allocation as contained in the budget call circular signed by the Minister of Finance, Mrs Zainab Ahmed showed that the Ministry of Works and Housing is to get the highest allocation of N272.06bn.

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This is an increase of N6.2bn when compared to the N256.73bn which the sector got in the revised budget of 2020.

The Ministries of Power, Transportation, and Defence followed with the sums of N178.38bn, N120.04bn and N120.04bn respectively as against N128bn, N109.34bn and N115.87bn which they got in the 2020 budget in that order.

Also, Education ministry is to get N80.21bn as capital allocation in 2021 as against N115.87bn it this year; Water Resources N84.14bn as against N80.7bn; Agriculture N83.86bn compared to N102.49bn, Health N93.67bn as against N51.4bn.

Similarly, Trade and Investment got capital allocation of N38.14bn, Petroleum N2.8bn, Mines and Steel N7.05bn, Environment N11.21bn, Niger Delta N19.07bn, Federal Capital Territory N31.87bn, Communications Technology N7.01bn, Science and Technology N42.12bn, Aviation N54.97bn.

In the security sector, the Federal Government is also planning to allocate the sum of N35.9bn to Ministry of Interior, National Security Adviser N28.04bn, Police Service Commission N280.47m, Police Affairs N12.9bn.

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In the area of Social Development, the government is proposing the sum of N5.88bn got Women Affairs, Youth Development and Sports N9.54bn, Humanitarian Affairs and Disaster Management N58.33bn.

For the Presidency, N10.01bn is being allocated for capital projects; Labour and Employment N13.4bn; Finance and Planning N5.6bn; Information and Culture N12.9bn; Foreign Affairs N6.6bn; and Special Duties N1.4bn among others.

In preparing the budget, the document stated that these priorities must be linked to the NESP’s core objectives.

The objectives are to stimulate the economy by preventing business collapse and ensuring liquidity; retain or create jobs using labour intensive methods in key areas like agriculture, facility maintenance, housing and direct labour interventions; and undertake growth enhancing and job creating infrastructural investments in roads, bridges, solar power, and communications technologies;

Also, the plan is to promote manufacturing and local production at all levels and advocate the use of Made-in-Nigeria goods and services, as a way of creating job opportunities, achieving self-sufficiency in critical sectors of our economy and curbing unnecessary demand for foreign exchange which might put pressure on the exchange rate; and extend protection to the very poor and other vulnerable groups, including women and persons living with disabilities, through pro-poor spending.

It stated “The capital budget ceilings reflect FGN’s commitment to the effective implementation of the NESP which is the transit plan between the ERGP and the successor medium term National Development Plan.

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“Where any indicated ceiling is exceeded. MDAs are to note that the Budhet Office of the Federation will use its discretion in adjusting down to within the approved ceiling without any recourse to the MDA.”

The document put the aggregate Federal Goverment revenue available for fiscal year 2021 at N7.498trn, while the aggregate expenditure level is projected to be N12.658trn.

The aggregate expenditure is made up of Statutory Transfers of N481.41bn, Debt Service of N3.124bn, Sinking Fund of N220bn, Recurrent (non-debt) expenditure of N5.746trn and Capital expenditure (exclusive of capital in Statutory Transfers) of N3.086trn.

Of the capital expenditure, MDAs Capital is estimated at N1.485trn.

It added, “The thrust of the Federal Government’s capital expenditure programme in 2021 will be completion of as many ongoing projects as possible, rather than starting new projects.

“Thus, MDAs are hereby advised that new projects will not be admitted into the capital budget for 2021, unless adequate provision has been made for completion of all.”

In furtherance of its inclusiveness agenda, the government said it intends to sustain the Special Intervention Programme.

Accordingly, a total of N420bn is proposed to be allocated to the SIP.

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