Business - Business & Economy - News - October 8, 2021

Mixed reactions trail Buhari’s timely presentation of 2022 Budget to National Assembly

By Bassey Udo

A university don and Nigeria’s first Professor of Capital Markets, Uche Uwaleke on Thursday hailed   President Muhammadu Buhari for his timely presentation of the 2022 Budget to the National Assembly.

But, other experts who reacted to the presentation of the fiscal appropriation by the President to the Joint session of the National Assembly on Thursday in Abuja described some of the proposals as unrealistic and unachievable.

In commending the President for presenting the 2022 appropriation bill in relatively good time, Uwaleke said he expects the National Assembly would put in the same, amount of effort, determination and commitment to ensure work was conclude on the draft budget before the end of the year.

Considering and approving the budget on schedule by the lawmakers, Uwaleke said, would enable implementation to commence in January following the President’s assent.

“Indeed, the mending of the hitherto broken budget year is a major achievement by this administration” he said.

On the budget assumptions and parameters, Uwaleke said he thinks the budget benchmarks are largely realistic with respect to a conservative crude oil price of $57 per barrel, exchange rate of N410 to the dollar and real gross domestic product (GDP) growth rate of 4.2 percent.

However, he noted that the same cannot be said of the
assumption in respect of inflation rate of 13 percent, which he said did not appear realistic.

He said that considering that the implementation of the Petroleum Industry Act (PIA) require the complete removal of fuel subsidy from pricing template of petrol, cost of goods and services are bound to skyrocket.

On borrowing domestically and externally to fund the deficit in the budget, Uwaleke agreed with the President who admitted that the concern about  increasing deficit financing through borrowing was justified.

He said the consolation however was that the declaration by the government that all new borrowings would be tied to critical infrastructure development projects.

Also, he said it was uequally noteworthy that the government made provisions for the use of Green bonds as well as public-private partnership (PPP) arrangements in financing infrastructure projects execution.

While presenting the budget to the joint session of the National Assembly on Thursday, the President announced the outlay of a N16.39 trillion  “Budget of Economic Growth and Sustainability.”

The fiscal proposal, he said, was based on the 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. 

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