OrderPaperToday – President Muhammadu Buhari has written to the National Assembly, requesting a 2022 budget increase from N13.98 trillion to N16.45 trillion.
The projected federal government overall expenditure increment includes Government Owned Enterprises, and Project-tied Loans is N2.47 trillion of the initial proposal of N13.98 trillion.
The request in the Revised 2022-2024 Medium Term Fiscal Framework (MTFF) was accompanied by a letter read by the Speaker of the House of Representatives, Femi Gbajabiamila, at plenary on Tuesday.
According to the President, the increase in expenditure was due to N100 billion additional provision to the Independent National Electoral Commission (INEC). The addition is to cater for 2023 General Elections and N54 billion to the National Agency for Science and Engineering Infrastructure NASENI, representing 1% Federal Government Share of Federation Account.
The letter identified other reasons for the 2022 budget increase as: “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)”.
Again, the President stated that the rise was also due to the 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 N290.7 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)”. There is also a projected increase of fiscal (budget) deficit by N692.0 billion, representing 3.42% of GDP from 3.05% of GDP in the initial fiscal deficit estimate of N5.62 trillion.
Buhari also said that it was necessary to revise the MTEF to reflect the new fiscal terms in the recently signed Petroleum Industry Act (PIA) 2021 and other critical expenditures in the 2022 Budget.
However, he indicated that 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.
Thus the changes to the 2022 projections in the Fiscal Framework demanded by the President include; gross revenue projection decreased by N341.57 billion, from N8.870 trillion to N8.528 trillion. Also, deductions for Federally-funded upstream project costs and 13% derivation decreased by N335.3 billion and N810.25 million, respectively. Similarly, Oil and Gas revenue projection declined by N5.42 billion from N6.540 trillion to N6.535 trillion.
The other amendments proposed in the MTEF include; a 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).
Thus the increase is based mainly on: “projected increase in the revenues of Government Owned Enterprises (GOES) by N837. 76 billion; MDAs (Ministries, Departments and Agencies) internally Generated Revenue was also jacked 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.“