FG Proposes N536.7bn for Pension, Gratuity, Others in 2020

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Ebere Nwoji

The federal government has proposed a total of N536,717,450,121 for settlement of pensions, gratuities and retirement benefits of retired and serving workforce in the 2020 Appropriation Bill the President Muhammadu Buhari presented to the National Assembly last week.

It also allocated N16.567billion for ex- workers of the defunct Nigeria Airways and the sum of N2.3billion for entitlements of former presidents/heads of states and Vice Presidents/chief of general staff.

The breakdown of the Appropriation Bill showed that the Office of the Head of Civil Service of the Federation with respect to arrears of pension would gulp N48,897,287,441.

Under this, the unit allocation showed that gratuities amounted to N2,300,000,000. Payment of pension was allocated N467,287,441 while pension running cost estimated at N130,000,000.

Similarly, the sum of N217,593,565,984 proposed for military pensions and gratuities. A breakdown of the allocation to the military showed that pensions was estimated at N126,492,195,623; the sum of N17,917,600,447 was allocated to expected retirees; the sum of N23,191,554,357 to death benefits; administrative charges/running costs got N150,000,000; medical retirees took N1,258,074,576; arrears of 2017 to 2018 pensions has N43,800,692,518 and arrears of 2017to 2018 gratuity was allocated N4,782,448,463. 

Another allocation with respect to military retirees involved National Health Insurance Scheme(NHIS) which got a total of N10,478,000,762.

For Police pensions and gratuities, the sum of N7,408,000,000 was proposed in the 2020 Appropriation Bill. Under this, pensions took N7,308,000, 000 while pension running cost was projected to cost N100,000, 000.

With respect to Customs, Immigrations and Prison Pension Office, N8,311,000,000 was proposed, while it was expected that out of the sum, pensions would receive N8,211,000,000 and pension running cost was assigned N100,000,000.

The universities pensions including arrears was projected to cost N13,629,524,126.

The parastatals pensions and railway pensions was assigned N26,756,754,031.

The Department of State Security, was allocated N13,160,158718 and under it, pensions including arrears was estimated to take N9,007,377,311, while gratuity was allocated N3,886,521,784, just as death benefits was expected to gulp N266,259,623.

The Nigerian Intelligence Agency got N4,365,518,550, while the unit allocations showed that pensions/defendants’ benefits got N4,265,518,550, while the pension running cost was projected to cost N100,000,000.

The president had in his budget presentation said: “An aggregate expenditure of N10.33 trillion is proposed for the federal government in 2020. The expenditure estimate includes statutory transfers of N556.7 billion, non-debt recurrent expenditure of N4.88 trillion and N2.14 trillion of capital expenditure (excluding the capital component of statutory transfers). Debt service is estimated at N2.45 trillion, and provision for Sinking Fund to retire maturing bonds issued to local contractors is N296 billion.”

According to him, N556.7 billion is provided for Statutory Transfers in the 2020 budget and includes: N125 billion for the National Assembly; N110 billion for the judiciary; N37.83 billion for the North East Development Commission (NEDC); N44.5 billion for the Basic Health Care Provision Fund (BHCPF); N111.79 billion for the Universal Basic Education Commission (UBEC); and N80.88 billion for the Niger Delta Development Commission (NDDC), which is now supervised by the Ministry of Niger Delta Affairs.

He stated that budgetary allocation to the National Human Rights Commission has been increased from N1.5 billion to N2.5 billion to enable it to perform its functions more effectively.

“Accompanying the 2020 budget proposal is a finance bill for your kind consideration and passage into law. This Finance Bill has five strategic objectives, in terms of achieving incremental, but necessary, changes to our fiscal law,” Buhari added.

He said the objectives of the bill included promoting fiscal equity by mitigating instances of regressive taxation; reforming domestic tax laws to align with global best practices; introducing tax incentives for investments in infrastructure and capital markets, among others.

He said: “The draft Finance Bill proposes an increase of the VAT rate from 5% to 7.5%. As such, the 2020 Appropriation Bill is based on this new VAT rate. The additional revenues will be used to fund health, education and infrastructure programmes. As the states and local governments are allocated 85 per cent of all VAT revenues, we expect to see greater quality and efficiency in their spending in these areas as well.

“The VAT Act already exempts pharmaceuticals, educational items, and basic commodities, which exemptions we are expanding under the Finance Bill, 2019 – specifically, Section 46 of the Finance Bill, 2019.”