The Minister for Finance, Budget and National Planning, Zainab Ahmed, has said that fuel subsidy will gulp N450 billion in 2020.
She said this on Monday in Abuja, at the public presentation of the 2020 budget proposals.
Mr Ahmed said it was called ‘under-recovery’ because it was the cost of operation of the Nigeria National Petroleum Corporation, NNPC.
“We have a provision for under-recovery of PMS in the sum of N450 billion. If you look at the Budget office website, it is in the fiscal framework, which is an annexure to the budget.”
President Muhammadu Buhari had on Tuesday, presented a budget proposal of N10.33 trillion to a joint session of the National Assembly.
He put the Federal Government’s estimated revenue in 2020 at N8.155 trillion, comprising oil revenue of N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenue of N3.7 trillion.
Other estimates are N556.7 billion for statutory transfers, N2.45 trillion for debt servicing and provision of N296 billion as sinking fund.
The 2020 budget is based on an oil production estimate of 2.18 million barrels per day, oil price benchmark of 57 dollars per barrel and an exchange rate of N305 to a dollar.
Mr Ahmed said that recurrent (non-debt) spending was expected to rise by 11.28 per cent, from N4.39 trillion in 2019 to N4.88 trillion in 2020.
This, she said, would reflect in salaries and pensions, including provisions for implementation of the new minimum wage.
Mr Ahmed said that the overall budget deficit of N2.17 trillion represents 1.52 per cent of the Gross Domestic Product, GDP, and N1.64 trillion of it would be funded by both domestic and external borrowing.
According to her, the external sources will provide N850 billion, while domestic sources will provide N744.99 billion.