According to a circular posted on the website of the Federation Budget Office, the overall revenue available for the budget for 2021 is projected at N7,498 billion, while the overall expenditure level is expected to be N12,658. The Federal Executive Meeting (FEC) for this purpose was chaired by President Muhammadu Buhari, Vice President, SGF, COS, NSA and a few ministers present in person at the State House Council Chambers, while the rest of the cabinet participated remotely.

These projections, the government said, are consistent with its medium-term expenditure framework for 2021-2023 and its fiscal policy. The circular, signed by Finance Minister Zainab Ahmed, noted that key parameters of the 2021-2023 fiscal framework have been set in line with global and national economic outlook. Ms. Ahmed noted that the overall expenditure consists of statutory transfers of 481.41 billion naira, debt service of 3.124 billion naira, sinking fund of 220 billion naira, recurrent expenditure (non-debt related) of N5,746 billion and capital expenditure (excluding capital in statutory transfers) of N3,086 billion.

Capital expenditure stands at N1.485 billion, the circular says. Similarly, statutory transfers of N481.41 billion consist of allocations to the National Judicial Council (NJC), Universal Basic Education Commission (UBEC), Niger Delta Development Commission (NDDC), National Assembly (NASS), Independent National Electoral Commission (INEC), National Human Rights Commission (NHRC), Public Complaints Commission (PCC), Development Commission (NEDC) and the Basic Health Care Provision Fund (BHCPF).

"These branches of government and agencies are expected to use the funds transferred strictly to achieve the purposes for which they are intended," the circular notes. "In accordance with the Fiscal Responsibility Act (2007), all recipients of statutory transfers will be required to provide periodic reports to BOF on the use and expenditure of the funds received."

In addition, N220 billion is provisioned for the sinking fund to honor maturing loans. Similarly, the lump sum of N3,086 billion, which excludes the capital component of statutory transfers, has been set aside for various critical capital expenditures. They include N1.485 billion for MDAS capital expenditure; N234.19 billion for capital supplementation; N337.06 billion for grants and donor-funded projects; 20 billion naira for the special intervention program; N4335.59 billion for public enterprises; and N674.11 billion for loans related to multilateral and bilateral projects.

As of May 30, the actual revenue of the Nigerian government stood at 16.2 trillion naira, representing 62% of the prorated revised budget of 2.62 billion naira. The 38% shortfall is attributable to the underperformance of oil and non-oil revenue streams, the circular notes. Earlier in the year, oil prices fell sharply due to Covid-19-related disruptions to economic activities around the world. The situation in the world oil market has been aggravated by a price war between the forces of the OPEC cartel, notably Saudi Arabia and Russia.

The circular added that structural weaknesses in the global economy, and the domestic environment by extension, have further aggravated the economic crisis.