President Muhammadu Buhari would, on Thursday, present the 2022 budget to a joint session of the National Assembly.
Deputy Senate President, Ovie Omo-Agege, disclosed this yesterday after reading and referring President Muhammadu Buhari’s submission of the revised 2022-2024 Medium Term Fiscal Framework to the Committee on Finance for legislative input.
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Buhari’s request seeking the parliament approval of the revised framework, is coming two weeks after the lawmakers okayed the 2022-2024 budget framework.
In the revised MTEF, the federal government increased its 2022 projected expenditure to N16.45 trillion, an increase of N2.47 trillion from the N13.98 trillion earlier approved by the National Assembly.
The fiscal deficit, according to the revised framework, is projected to increase by N692.0 billion or to 3.42% of GDP from 3.05% of GDP.
Buhari explained that the revision was necessitated by the need to reflect the new fiscal terms in the Petroleum Industry Act (PIA) 2021, as well as other critical expenditures in the 2022 Budget.
He, however, said the underlying drivers of the 2022 fiscal projections, such as oil price benchmark, oil production volume, exchange rate, GDP growth, and inflation rate reflect emergent realities and the macroeconomic outlook remain unchanged as in the previously approved 2022-24 MTEF&FSP.
Buhari noted that the increase in expenditure was due to N100 billion additional provision to INEC, to cater for the 2023 General Elections; and the provision of N54 billion to NASENI, which represents 1 percent FGN share of Federation Account.
Others are the additional provision of N510 billion in the Service Wide Votes to cater for National Poverty Reduction with Growth Strategy (N300 billion), Police Operations Fund (N50 billion), Hazard Allowance for Health Workers (50 billion), Public Service Wage Adjustments (additional N80 billion), and MDAs’ Electricity Bills Debt (additional N37 billion); and additional Capital provision of N1.70 trillion.
He explained that the provision for additional capital in the framework was as a result of projected increases in Capital Supplementation by N179.1 billion; GOEs Capital by N222.1 billion; TETFUND Expenditure by N290.7 billion; Multilateral/Bi-lateral Project-tied Loans by N517.5 billion; and MDAs Capital Expenditure by N390.5 billion (including N178.1 billion provision for population and housing census to be carried out in 2022.
Oil & gas revenue, 13% derivatives slashed
The PIA, the president said, established a progressive fiscal framework aimed at encouraging investment in the Nigerian Petroleum Industry.
“This significantly alters the Oil and Gas fiscal terms and has necessitated changes in the 2022-2024 Medium Term Fiscal Framework.
“The fiscal effects of PIA implementation are assumed to kick in by mid-year 2022. The revised 2022-2024 Fiscal Framework is premised on a hybrid of January-June (based on current fiscal regime) and July-December (based on PIA fiscal regime), while 2023 and 2024 are now fully based on the PIA”, he said.
Buhari, therefore, listed the changes to the 2022 Fiscal Framework projections to include Gross Revenue projection decreased by N341.57 billion, from N8.870 trillion to N8.528 trillion; decreased deductions for federally funded upstream projects costs and 13 per cent derivation by N335.3 billion and N810.25 million respectively; and Net Oil and Gas revenue projection declined by N5.42 billion from N6.540 trillion to N6.535 trillion.
Buhari said also to be modified in the fiscal framework was an increase in projected FGN’s Retained Revenue from N8.36 trillion to N10.13 trillion.
Giving a breakdown of the projected increase in Federal Government’s revenue, he said N837.76 billion was from increase in revenue of Government-Owned Enterprises; N697.6 billion from MDAs Internally Generated Revenue; the introduction of Education Tax of N306 billion and Dividend of N8.3 billion from the Bank of Industry as revenue lines; and FGN share of oil price royalty of N96.9 billion which is expected to be transferred to the Nigerian Sovereign Investment Authority based on the provisions of the PIA.
The Deputy Senate President, after reading the President’s letter, referred the same to the Committee on Finance.
The Committee, which is chaired by Senator Solomon Olamilekan Adeola was mandated to report back tomorrow, Wednesday, October 6, 2021.
“You will have to report back to us latest tomorrow (Wednesday), to enable us to use it as a predicate for the budget presentation on Thursday”, Omo-Agege said.
Finance ministry keeps mum on budget implementation
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed didn’t respond to the enquiry sent to her phone on the current state of 2021 budget implementation.
Text messages sent to her mobile phone weren’t returned as at press time.
Also message sent to his Media Adviser, Mr Yunusa Tanko wasn’t returned as well as at press time.
By Abdullateef Salau, Balarabe Alkassim & Chris Agabi