President Muhamadu Buhari has formally transmitted the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the National Assembly for approval.
The Speaker of the House of Representatives, Hon Femi Gbajabiamila, read the cover letter dated July 8, 2021, during Thursday plenary.
The MTEF/FSP which scaled through First Reading, is expected to be slated for Second Reading on the next legislative day.
While commending the lawmakers for the sustained January-December budget cycle, Mr President explained that the government will use the MTEF parameters to prepare the 2022 budget proposal.
“It is with pleasure that I forward 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the kind consideration and approval of the House of Representatives.
“Let me use this medium to express my deep gratitude to your enduring collaboration and commitment of the leadership and honourable members in our collective efforts to sustain the restoration of the January to December financial year.
“On our part we’ve worked very hard to sustain the early submission of the MTEF-FSP, to allow the National Assembly sufficient time to review the Framework.
“As the 2022 budget will be prepared based on parameters and fiscal assumptions as of the approved 2022-2024 Medium Time Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). I seek the cooperation of the National Assembly for expeditious action on the submission.”
The Minister of Finance and National Planning, Mrs Zainab Ahmed, who briefed journalists at the State House, said the government is projecting revenue of N6.54 trillion and N2.62 trillion to the Federation Account and Value Added Tax (VAT) respectively.
The projected expenditure stands at N13.98 trillion with a deficit of N5.62 trillion. For two years in a row, the deficit is above the deficit to GDP threshold stipulated in the Fiscal Responsibility Act.
The Fiscal Responsibility Act stipulates a three per cent threshold, however, the president can increase it with a proper justification to the National Assembly.
According to her, the N5.62 trillion deficit is expected to be financed by new foreign borrowing and domestic borrowing, both domestic and foreign in the sum of N4.89 trillion on privatisation proceeds of N90.73 billion and drawdowns from existing project tied loans of N635 billion.
Some of the parameters include; crude oil benchmark price of 57 dollars per barrel of crude oil for 2022, crude oil production of 1.88 million barrels per day, and our exchange rate of 410 to one US dollar, an inflation rate of 10 per cent in 2022, and a nominal GDP of N149.369 trillion.
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