2022 budget: Reps approve N16.39trn expenditure, N635.4bn deficit
• endorse President’s revised MTEF/FSP
The House approved the aggregate expenditure of N16.39 trillion and N10.3 trillion retained revenue for the 2022 fiscal year.
The House also approved N635.4 billion fiscal deficit be approved for the incoming financial year.
The House gave the approval after the consideration of the report of the Committee on Finance on the revised Federal Government of Nigeria 2022–2024 Medium Term Expenditure Frame Work (MTEF) and Fiscal Strategy Paper (FSP), at the Committee on Supply, chaired by Hon. Femi Gbajabiamila.
In the same vein, the House commended the Budget Office of the Federation and Federal Ministry of Finance, Budget and National Planning be commended for insisting that Ministries Department and Agencies (MDAs) submit their revenue profile as premise for being captured in the 2022 budget proposal.
President Muhammadu Buhari is expected to lay the 2022 budget estimates before the joint session of the National Assembly on Thursday, 7th October, 2021 by 12noon.
The joint session is to be co-chaired by the Senate President, Senator Ahmad Lawan and the Speaker of the House of Representatives, Hon. Femi Gbajabiamila.
In line with the parliamentary tradition, the Senators and members of the House of Representatives are to converge at the House of Representatives Chambers.
President Buhari in a letter read by the Speaker, solicited for the permission of the House to lay the 2022 budget estimates before the parliament.
In response to the President’s request, the House in pursuant to Order 21 Rule 8(1) and (2) of the Standing Orders, resolved to admit the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria and his entourage to address a joint sitting of the National Assembly on Thursday 7 October, 2021 at 12noon, for the purpose of presenting the 2022 budget estimates.
Recall that President Buhari had via a letter dated 2nd October, 2021 formally requested for the review of the 2022-2024 Medium-Term Fiscal Framework’, with a view to increase the 2022 budget estimates from N13.98 trillion to N16.45 trillion.
According to Mr. President, the proposed revised 2022-2024 Medium Term Fiscal Framework 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.
“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, and remain unchanged as in the previously approved 2022-24 MTEF&FSP.
“The PIA establishes 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 2022-24 Fiscal Framework is the premised on 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.”
According to him, other critical expenditures that should be accommodated the 2022 Budget, the changes to the 2022 projections in the Fiscal Framework including: Gross revenue projection decreased by N341.57 billion, from N8.87O trillion to N8.528 trillion as Federation Account Revenue; Deductions for Federally-funded upstream project costs and 13% Derivation, decreased by N335.3 billion and N810.25 million respectively as well as Net Oil and Gas revenue projection declined by N5.42 billion from N6.540 trillion to N6.535 trillion.”
On the Federal Government’s Retained Revenue, Mr. President projected “decline in Net Oil and Gas Revenue by N5.42 billion. An increase in projected FGN’s Retained Revenue from N836 trillion to N10.13 trillion (inclusive of GOES), largely based on: A projected increase in the revenues of Government Owned Enterprises (GOES) by N837.76 billion and MDAs internally Generated Revenue by N697.6 billion.
“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 N969 billion which is expected to be transferred to the Nigerian Sovereign Investment Authority based on the provisions of the PIA.”
On the FGN Expenditure, President Buhari in the letter explained that the FGN Aggregate Expenditure (including GOEs and Project-tied Loans) is projected to increase by N2.47 trillion, from N13.98 trillion to N16.45 trillion.
“The increase in expenditure is due to: N100 billion additional provision to INEC, to cater for 2023 General Elections; The provision of N54 billion to NASENI, which represents 1% FG Share of Federation Account; 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 (N50 billion), Public Service Wage Adjustments (additional N80 billion), and MDAs’ Electricity Bills Debt (additional N37 billion).
“Additional Capital provision of N1.70 trillion, attributed to projected increases in: Capital Supplementation by N179.1 billion; GOES Capital by N222.1 billion; TETFUND Expenditure by N290] billion; Multi-lateral / 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).
On the fiscal deficit, President Buhari observed that the aggregate Deficit (inclusive of GOEs and Project-tied Loans) is projected to increase by N692.0 billion or to 3.42% of GDP from 3.05% of GDP.
“I herewith forward the Revised 2022-2024 MTFF. As the 2022 budget of the Federal Government will be prepared based on the parameters and fiscal assumptions of the approved Revised 2022-2024 MTFF, I seek the cooperation of the National Assembly for expeditious legislative action on the submission,” President Buhari said in the 3-page letter.
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