The Senate on Wednesday approved the N13.98 trillion budget proposal by the Federal Government for the 2022 fiscal year.
The approval was based on projections captured in the approved 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The fundmental benchmark data in the approved document included oil price benchmark of $57 per barrel, exchange rate of N410.15 to the dollar, and crude oil production capacity of an average of 1.88 million barrels per day (bpd).
Other details total recurrent (non-debt) expenditure of N6.21 trillion; personnel costs by ministries, departments and agencies (MDAs) N3.47 trillion; capital expenditure (exclusive of transfers) N3.26 trillion; special intervention (recurrent) N350 billion, and special intervention (capital) of N10 billion.
Also, the lawmakers approved total statutory transfers of N613.4 billion; Debt Service estimate of N3.12 trillion; Fiscal Deficit N5.62 trillion and a provision for a Sinking Fund of N292 billion, Pension, Gratuities & Retirees Benefits of N567 billion.
Projected Gross Domestic Product (GDP) growth rate was put at 4.20 percent and inflation rate of 13 percent.
In the approved MTEF/FSP, the Senate urged the government to carry out a review of the salary structure of all the MDAs in their ebaling Act to reflect the reality of their true financial situations.
Some of the agencies include the Nigerian Investment Promotion Council (NIPC) Act, National Lottery Trust Fund Act, Bank of Industry Act, Bank of Agriculture Act, Energy Commission Act and Nigeria Nuclear Regulatory Commission Act.
The offices of the Accountant-General (AGF), Auditor-General of the Federation (AuGF) and Fiscal Responsibility Commission (FRC) should be strengthened with adequate staffing and proper funding of their activities to achieve optimal performance, to adequately monitor remittances of all government revenues.
New Borrowings of N4.89 trillion including Foreign and domestic Borrowings87788).
To boost the level of non-oil revenue through increased royalties, ground rent and licenses renewal of all mining companies operating in the country, the Senate asked the government to urgently review all laws relating to mining businesses.
The review of the laws, the Senate said, would not only ensure transparency in the collection of revenue by the relevant agencies of government, but also check the issue of illegal mining by recommending stringent sanctions for infractions.
Besides, the Senate said the Nigeria Customs Service should accelerate the process to install scanners at all ports in the country to curb the menace of under-payment of Custom duties on imported goods and loss of revenue, while improving activities of the agency at all borders to check smuggling.
On the Petroleum Industry Act (PIA), the Senate called for its implementation to curtail the problems of smuggling and round-tripping of petroleum products imported into the country.
Analysts have criticized the approved budgetary projections as unachievable, particularly the exchange rate put at N410 to the dollar and inflation rate of 13 per cent.
With the Naira currently exchanging for about N565 to the dollar, the analysts said it would be magic to think the rate would be forced down to about N410, same as the inflation rate currently at about 18.17 percent.
For the former Team Lead, Facility for Oil Sector Transparency and Reform (FOSTER), Henry Adigun, the crude oil production capacity may be difficult to achieve in view of the instability in fiscal terms and vandalism of oil facilities.
“The country’s rig count was five a few months back, and as at last week it was at eleven. So many factors affect rig count, including crude oil price in the international market.
When crude oil price is very low, operators shut down, and it takes a lot of costs to recover.
“One other issue that affect rig count is the vandalism of oil facilities, which limit their ability to contribute to production, as a result of shut-in of production.
Although Adigun was optimistic that Nigeria may be able to realize increased oil production of 1.4m bpd in September, he said the country required extra effort to meet the output level approved by the senate in the budget.
He said the fiscal provisions in the Petroleum Industry Act were good, adding that with the fiscals now out, people would understand that it is no longer term planning to meet set targets.