FG Explains Budget Deficit, Defence Ministry Allocation

The Federal Government has explained that the 2021 Budget has a total deficit of N5.20 trillion, representing 3.64 percent of estimated Gross Domestic Product (GDP) and above the three percent set by the Fiscal Responsibility Act, 2007.

The Minister of Finance, Zainab Ahmed, explained that the deficit exceeded the limit set by the Fiscal Responsibility Act, 2007 because the nation still “face the existential challenge of Coronavirus pandemic and its aftermath.”

According to Ahmed “The 2021 Budget deficit (inclusive of Government Owned Enterprises and project-tied loans), is projected at N5.20 trillion. This represents 3.64 percent of estimated GDP”.

Also, the Government explained that the Ministry of Defence which got a colossal allocation of N840.56 billion above every other ministry was essential because of its strategic importance.

The Director General of Budget, Ben Akabueze, stressed that it is when one is secured that one could be able to do anything.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed  and the Director General of Budget, Ben Akabueze spoke at the public presentation of the 2021 Budget on Tuesday.

She said the budget deficit will be financed mainly from domestic and foreign borrowings to the tune of N4.28 trillion; multilateral/bilateral loan drawdowns of N709.69 billion and privatized proceeds of N205.15 billion.

The minister explained that the N13.08 trillion 2021 budget is 21 percent higher than the 2020 budget  with an aggregate capital expenditure of N3.85 trillion.

According to Ahmed, aggregate revenue available to fund the 2021 budget “is projected at N7.89 trillion, 35 percent more than the 2020 Revised Budget of N5.84 trillion”.