The federal government is on the move again looking for money. This time not from tax hike or agriculture but from selling national assets all for the purpose of funding the 2021 budget. Oh yes, this means that the national asset you benefit from today for free, you may need to pay for it when this proposed move pulls through.
This latest development was revealed in a presentation, titled, ‘Public Presentation of 2021 FGN Approved Budget – Breakdown and Highlights’ recently by the finance minister, Zainab Ahmed stating that the government will sell some non-oil assets to serve as an additional source of finance for the year’s budget.
Taxmobile.Online has it on good authority that apart from its plan to engage in domestic and foreign borrowings to fund the 2021 budget, the federal government has confirmed that it will also sell some government-owned properties for the same purpose.
Reactions to budget borrowings
Already, many have condemned the federal government’s consistent resolve to borrow to fund budgets annually. For this year, the government is to borrow ₦5.6 trillion from domestic and foreign resources. The amount being the total deficit for the 2021 budget. This represents 3.93 percent of the GDP.
This paper had reported how the deficit will be financed, according to the ministry of finance.
Both the president and Ms. Zainab had said Nigeria will borrow money from the World Bank, the Islamic Development Bank, and countries like Brazil to fund the budget.
Also recall that for the 2021 budget, the recurrent expenditure was put at N5.6 trillion with capital expenditure at ₦4.1 trillion and fiscal deficit at ₦5.2 trillion (5,196,007,992,292).
Besides selling off national assets, the federal government also intends to finance the year’s budget through “Borrowing from Special Accounts.”
Although no amount was stated for this purpose, many believe the government plans to borrow money from dormant accounts, as announced earlier.
Ms. Ahmed had disclosed that the government is targeting about N850 billion from unclaimed dividends and dormant bank deposits.
The government will also finance the budget through proceeds from privatisation of some public assets which has been put at N205.1 billion.
Other means are Multilateral/Bi-lateral Project-tied Loans pegged at N709.68 billion and ‘New Borrowings’ of N4.7 trillion (N4,686,775,885,696) which includes borrowing from domestic sources of N2.34 trillion and from foreign sources of N2.34 trillion)
The government also hopes to finance the budget from its share of oil revenue- N2.01 trillion, NLNG Dividend – N208.5 billion, Minerals and Mining N2.65 billion and non-oil at N1.48 trillion.
Others are Company Income Tax (CIT) – N681.7 billion, Valued Added Tax (VAT)-N238.4 billion, Customs – N508.2 billion, and Federation Account levies at N60.5 billion.