Johnson Chukwu, Managing Director of Cowry Asset Management Limited on Thursday said his hope was that the 2021 budget would pull Nigeria out of the recession that was likely.
Chukwu spoke with the News Agency of Nigeria (NAN) in Lagos, against the backdrop of the 2021 budget estimates presented by President Muhammadu Buhari to the joint session of the National Assembly.
He, however, noted the challenges around the Gross Domestic Product (GDP) which is projected to be negative in the third quarter of 2020, after a decline by 6.1 per cent in the second quarter, ending a three year positive.
Chukwu said that the Federal Government’s projected growth rate of three per cent in 2021 might be difficult to achieve.
“Basically, it is necessary for the budget to pull Nigeria out of recession.
“It might be difficult for us to achieve a three per cent growth rate, also the inflation target of 11.5 per cent is very optimistic,” he said.
Chukwu said that FG’s benchmark of $40 per barrel and daily projected production of 1.86 million barrels daily to fund the budget were welcomed ideas.
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NAN reports that the president had presented an estimated budget size of N13.08tn to the National Assembly.
Based on the fiscal assumptions and parameters, total federally distributable revenue is estimated at N8.433 trillion in 2021.
Total revenue available to fund the 2021 Federal Budget is estimated at N7.886 trillion.
This includes Grants and Aid of N354.85 billion as well as the revenues of 60 Government-Owned Enterprises.
Oil revenue is projected at N2.01 trillion. Non-oil revenue is estimated at N1.49 trillion.
The 2021 Budget deficit (inclusive of Government Owned Enterprises and project-tied loans), is projected at N5.20 trillion.
This represents 3.64 per cent of the estimated GDP, slightly above the 3 per cent threshold set by the Fiscal Responsibility Act, 2007.
[NAN]
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