By Bassey Udo
President Muhammadu Buhari on Thursday presented to the National Assembly a N16.39 trillion “Budget of Economic Growth and Sustainability” for consideration and approval.
The fiscal proposal presented to the joint session of the National Assembly was based on the fundamental assumptions and parameters spelt out in the
the 2022 to 2024 revised Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
The assumptions included a conservative crude oil price benchmark of $57 per barrel; daily oil production estimate of 1.88 million barrels (inclusive of condensates of between 300,000 400,000 barrels per day); exchange rate of $410.15 per dollar; projected gross domestic product (GDP) growth rate of 4.2 percent, and 13 percent inflation rate.
Based on these fiscal assumptions and parameters, President Buhari said total federally-collectible revenue was estimated at about N17.7 trillion during the year.
Also, total federally distributable revenue, he said, was estimated at about N12.72 trillion in 2022, while total revenue available to fund the 2022 Federal Budget was estimated at N10.13 trillion.
He said the amount included grants and aid of N63.38 billion as well as the revenues of 63 government-owned enterprises.
Projected oil revenue, the president said was put at about N3.16 trillion, non-oil taxes at about N2.13 trillion and Federal Government Independent revenues projected at about N1.82 trillion.
Of the total expenditure of N16.39 trillion for the Federal Government in 2022, the President said comprised Statutory Transfers of N768.28 billion; non-debt recurrent costs of N6.83 trillion; personnel costs of N4.11 trillion and pensions, gratuities and retirees’ benefits of N577 billion.
Other components of the expenditure budget proposal included overheads of N792.39 billion; capital expenditure of N5.35 trillion, including the capital component of statutory transfers;
debt service N3.61 trillion and sinking fund of N292.71 billion to retire certain maturing bonds.
The President said priority of the government expenditire would continue to be on defence and internal security, allocations to ministries, department and agencies (MDAs) to be guided by the strategic objectives spelt out in the National Development Plan of 2021 to 2025.
The objectives in the plan include diversifying the economy, with robust micro, small and medium enterprise (MSMEs) growth; investing in critical infrastructure; strengthening security and ensuring good governance; enabling a vibrant, educated and healthy populace; reducing poverty, and minimizing regional, economic and social disparities.
To realise the fiscal projections, the President said the current tax and fiscal laws are being reviewed in the draft Finance Bill 2022 to be produced in line with the government plan to accompany annual budgets with Finance Bills.
He said once ongoing consultations were completed, the draft Finance Bill would be submitted to the National Assembly for consideration alongside the 2022 Appropriation Bill.
On the performance of the 2021 Budget, the President said based on the 2021 Fiscal Framework, total revenue of N8.12 trillion was projected to fund aggregate federal expenditure of N14.57 trillion (inclusive of the supplementary budget).
He said the projected fiscal deficit of N6.45 trillion, or 4.52 percent of gross domesric product (GDP), was expected to be financed mainly by domestic and external borrowings.
A review of the expenditure in the budget showed that as at end of July 2021, a total of N6.79 trillion was spent as against the pro-rated expenditure of N7.91 trillion.
Accordingly, he said a deficit of N4.17trillion was recorded as at end of July 2021, financed mainly through domestic borrowing.
The President recalles that in March 2020, the Petroleum Products Pricing Regulatory Agency (PPPRA) announced the removal of subsidy from the pricing template for petrol, to allow the price of the commodity to be determined henceforth by market forces.
He said a combination of rising crude oil prices and exchange rate combined to push the price of petrol above the approved regulated price of N145 per litre.
Regardless, opposition, led by the Nigeria Labour Congress (NLC), against the policy of price deregulation introduced by the government forced the suspension of further upward retail price adjustments to allow consultations with Labour.
The payment of the cost under-recovery, popularly called petrol price subsidy, the president said, significantly eroded revenues that should have been available to the government to fund the budget.
Despite revenue challenges, the President said the government consistently met its debt service commitments, apart from being up to date on the payment of workers salaries, statutory transfers, and overhead costs.
“As at October 4, 2021, a total of N1.732 trillion had been released for capital expenditure. I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2021,” the President said.
Capital releases during the year, he said, was prioritised in favour of critical ongoing infrastructural projects in the power, roads, rail, agriculture, health and education sectors.
Also, he said progress was being made on the railway projects connecting different parts of the country, with the Lagos-Ibadan line is now completed and operational.
While the Abuja-Kaduna Line running efficiently, he said the Itakpe-Ajaokuta rail line was finally completed and commissioned over 30 years after its initiation.
Arrangements, he said, are underway to complete the Ibadan-Kano Line while work would soon commence on the Port Harcourt-Maiduguri Line and Calabar-Lagos Coastal Line, which would connect the Southern and Eastern States to the North.
Besides, progress was also being made on several power generation, transmission, and distribution projects, as well as off-grid solutions, all aimed at achieving the national goal of optimizing power supply by 2025.
In addition, he said there equally visible progress in strategic road construction projects like the Lagos – Ibadan expressway, Apapa – Oworonsoki expressway, Abuja – Kano expressway, East-West Road and the second Niger bridge, most of which are expected to be commission before the end of the present administration’s tenure in 2023.
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