President Muhammadu Buhari said, yesterday, that the country is heading for another recession, the second in four years. He noted, however, that the Federal Government has put in place plans to ensure rapid recovery in 2021.
The President, who made the remarks while presenting the 2021 budget proposal to the National Assembly, spoke against the backdrop of a significant increase in deficit beyond the provisions of the Fiscal Responsibility Act, following revenue pressures faced by the government.
He said: “The 2021 Budget was prepared amid a challenging global and domestic environment due to the persistent headwinds from the coronavirus pandemic. “The resulting global economic recession, low oil prices and heightened global economic uncertainty have had important implications for our economy.
“The Nigerian economy is currently facing serious challenges, with the macroeconomic environment being significantly disrupted by the coronavirus pandemic. “Real Gross Domestic Product, GDP, growth declined by 6.1 per cent in the second quarter of 2020. This ended the three-year trend of positive, but modest, real GDP growth recorded since the second quarter of 2017. “I am glad to note that, through our collective efforts, our economy performed relatively better than that of many other developed and emerging economies.
‘Second recession in four years’
“GDP growth is projected to be negative in the third quarter of this year. As such, our economy may lapse into the second recession in four years, with significant adverse consequences. “However, we are working assiduously to ensure a rapid recovery in 2021. We remain committed to implementing programmes to lift 100 million Nigerians out of poverty over the next 10 years.
“As skills’ deficits limit employment opportunities in the formal economy, various skills’ development programmes are being implemented simultaneously to address this problem frontally. “For instance, the government is implementing the Special Public Works programme to provide employment opportunities to 774,000 youths across the 774 local government areas of Nigeria.
“We have also recently introduced the N75 billion Nigeria Youth Investment Fund, of which N25 billion have been provided in 2021 Budget. “We thank all Nigerians, for your perseverance and continued support during these difficult times. We remain unwavering in our commitment to actualize our vision of a bright future for everyone.”
President Buhari also gave an overview of what has happened in the implementation of 2020 budget so far. He stated: “As at July 2020, the Federal Government’s actual revenue available for the budget was N2.10 trillion. This revenue performance was only 68 per cent of our pro-rated target in the revised 2020 budget.
“At N992.45 billion, oil revenue performed well above our budget target, by 168 per cent. Non-oil tax revenues totalled N692.83 billion, which was 73 per cent of the revised target. “On the expenditure side, as at end of July 2020, a total of N5.37 trillion had been spent as against the pro-rated expenditure of N5.82 trillion. “Accordingly, the deficit was N3.27 trillion. This represents 66 per cent of the revised budgeted deficit for the full year. “Despite these challenges, we met our debt service obligations.
We are also up to date on the payment of statutory transfers and staff salaries, while overhead costs have been significantly covered. “For the first time in recent years, we commenced the implementation of this year’s capital budget in the first quarter. As at 15th September 2020 a total of about N1.2 trillion had been released for capital projects. Every Federal MDA has received at least 50 per cent of its 2020 capital expenditure budget, in line with my earlier directives.
“To bridge the infrastructure deficit, we are also implementing innovative financing strategies to pull-in private sector investment. The Infrastructure Company, which I recently approved, will become a world-class infrastructure development vehicle, wholly focused on making critical infrastructural investments in Nigeria. This Infrastructure Company will raise funding from the Central Bank of Nigeria,
the Nigeria Sovereign Investment Authority, the Africa Finance Corporation, pension funds as well as local and foreign private sector development financiers. “Under the Road Infrastructure Tax Credit Scheme, we are undertaking the construction and rehabilitation of over 780 km of roads and bridges nationwide to be financed by the grant of tax credits to investing business.
“Ongoing projects under this scheme include construction and rehabilitation of Lokoja-Obajana-Kabba-Ilorin Road Section II (Obajana-Kabba) in Kogi and Kwara States; construction of Apapa-Oworonshoki-Ojota Expressway in Lagos State; and Construction of Bodo-Bonny road with a Bridge across the Opobo Channel in Rivers State.”