The Senate on Thursday approved the 2020 to 2022 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper(FSP) submitted by President Mohammadu Buhari last week but increased the value of the 2020 budget to 10.73 trillion naira.
Part of the recommendations approved by the Senate was the decision to increase the total expenditure estimates in the MTEF/FSP by 729 billion naira from the initial proposal submitted by the president.
The increase was based on expectations of higher oil prices in the course of the year. The parliament passed a medium-term expenditure framework that increased the anticipated oil price to $57 per barrel from a previous $55 per barrel. That pushed the budget up from 10.002 trillion naira.
The finance minister had previously revised the expected oil price down from $60 per barrel to cushion against supply shocks.
The framework passed on Thursday also pegged oil production at 2.18 million barrels per day (bpd). While Nigeria is currently producing at roughly that level, it had pledged to cut it meet an OPEC cap on crude oil of 1.685 million bpd.
It also recommended an increase in the revenue target of Nigeria Customs Service(NCS) from 942.6 billion naira to 1.5 trillion naira, given the performance of the NCS in the last nine months.
It further recommended that 557.4 billion naira from the revenue increment of NCS be used to reduce borrowing by 200 billion naira and increase capital expenditure.
This, it said would help decrease the size of the budget deficit from 1.7 trillion to 1.5trillion naira and also increase capital expenditures available to MDAs by 357 billion naira from 1.01trillion to 1.367 trillion naira.
It recommended the adoption of 1.5trillion naira as the amount for new borrowing, adding that the borrowing must be tied to critical projects to increase productivity.
It also recommended the earmarking of 1 percent of the consolidated revenue to finance basic health care.
It recommended that proper investigation be carried out on the electronic collection of stamp duties domiciled with the Central Bank of Nigeria(CBN) to ensure accountability and increase revenue base.
The document is a plan Nigeria uses to prepare its annual budget. The finance minister submits the framework to the legislature, which must then approve it.
President Muhammadu Buhari is expected to present a finalised budget proposal to the legislature on Tuesday.
It further recommended that 557.4 billion naira from the revenue increment of NCS be used to reduce borrowing by 200 billion naira and increase capital expenditure.
This, it said would help decrease the size of the budget deficit from 1.7 trillion to 1.5trillion naira and also increase capital expenditures available to MDAs by 357 billion naira from 1.01trillion to 1.367 trillion naira.
It recommended the adoption of 1.5trillion naira as the amount for new borrowing, adding that the borrowing must be tied to critical projects to increase productivity.
It also recommended the earmarking of 1 percent of the consolidated revenue to finance basic health care.
It recommended that proper investigation be carried out on the electronic collection of stamp duties domiciled with the Central Bank of Nigeria(CBN) to ensure accountability and increase revenue base.
The document is a plan Nigeria uses to prepare its annual budget. The finance minister submits the framework to the legislature, which must then approve it.
President Muhammadu Buhari is expected to present a finalised budget proposal to the legislature on Tuesday.
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