OrderPaperToday – President Muhammadu Buhari is expected to present the 2022 budget at a joint session of the National Assembly on Thursday, 7th October 2021.
The Deputy Senate President, Ovie Omo-Agege, disclosed this while presiding over the plenary on Tuesday.
Also, in a letter dated 4th October 2021, President Buhari forwarded a revised 2022-2024 Medium Term Fiscal Framework (MTEF/FSP) to the Senate for legislative input.
President Buhari explained that the revision was necessitated by the need to reflect the new fiscal terms in the Petroleum Industry Act, 2021, and other critical expenditures in the 2022 budget.
According to him, 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 2022-2024 MTEF/FSP.
Thus, the President’s letter in part stated that “the PIA established a progressive fiscal framework aimed at encouraging investment in the Nigerian Petroleum Industry. Therefore it significantly alters the Oil and Gas budgetary terms and has necessitated changes in the 2022-2024 Medium Term Fiscal Framework.”
Additionally, he said that “the fiscal effects of PIA implementation are assumed to kick in by mid-year 2022. Thus the revised 2022-2024 Fiscal Framework is premised on hybrid of January-June (based on current fiscal regime) and July-December (based on PIA fiscal regime) while 2023 and 2024 are now fully based on the PIA.”
Accordingly, President Buhari listed the changes to the 2022 Fiscal Framework projections to include Gross Revenue projection decreased by N341.57 billion, from N8.870 trillion to N8.528 trillion. Also reduced deductions for federally funded upstream projects costs and 13 per cent derivation by N335.3 billion and N810.25 million, respectively. As a result, net Oil and Gas revenue projection declined by N5.42 billion from N6.540 trillion to N6.535 trillion.
Furthermore, Buhari added that a decline in Net Oil and Gas Revenue was also to be modified in the fiscal framework by N5.42 billion. Thus it resulted in an increase in projected FGN’s Retained Revenue from N8.36 trillion to N10.13 trillion.
Giving a breakdown of the projected increase in the Federal Government’s revenue, he said N837.76 billion was from an increase in revenue of Government-Owned Enterprises. In addition, the N697.6 billion from MDAs Internally Generated Revenue; the introduction of Education Tax of N306 billion and Dividend of N8.3 billion from the bank of the industry as revenue lines. Similarly, the FGN share of oil price royalty of N96.9 billion is expected to be transferred to the Nigerian Sovereignty Investment Authority based on the provisions of the PIA.
He added that the FGN Aggregate Expenditure (including GOEs and Projected-tied Loans) is projected to increase by N2.47 trillion, from N13.98 trillion to N16.45 trillion.
Furthermore, the President noted that the increase in expenditure was due to N100 billion additional provisions to INEC. The amount is to cater for the 2023 General Elections. At the same time, the provision of N54 billion to NASENI represents a 1 per cent FGN share of the Federation Account.
Others are the 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 (50 billion), Public Service Wage Adjustments (additional N80 billion), and MDAs’ Electricity Bills Debt (additional N37 billion); and additional Capital provision of N1.70 trillion.
Also, President Buhari explained that the provision for additional capital in the framework resulted from projected increases in Capital Supplementation by N179.1 billion. While the GOEs Capital is 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.
After reading the President’s letter on the 2022 budget, the Deputy Senate President referred same to the Committee on Finance. The Committee, which Senator Solomon Olamilekan Adeola chairs, was mandated to report to the Senate tomorrow, Wednesday, 6th October 2021.
“You will have to report back to us latest tomorrow (Wednesday), to enable us use it as a predicate for the budget presentation on Thursday”, Omo-Agege said.