OrderPaperToday – The N16.39 trillion budget proposal for the 2022 fiscal year presented to the joint session of the National Assembly on Thursday has generated reactions from lawmakers.
Senator Bamidele Michael Opeyemi (APC, Ekiti Central) stated that the budget shows that the government is conscious of the times the country is. He noted that since it is a legacy budget, the figures from N13trn last year to 2022’s N16.39 trillion budget show that the budget has given governance a human face with the items listed.
Opeyemi stated that “we are all concerned on the level of deficit, we are concerned about the level of borrowing. But what are the two alternatives? We have two options. One is to fold our arms or go by our internally generated revenue; in this case, we can only pay salaries. You have to abandon infrastructure development, which we cannot afford to do.”
He went further to add that the other option is to borrow. “Nigeria is not the only country borrowing. Other countries are borrowing. Nobody prayed for COVID-19. It came, paralyse the economy of nations. Nigerian cannot be an exception. We will not support a situation where money is borrowed for consumables.”
On his part, Elisha Ishaku Abbo (APC, Adamawa North) noted that the 2022 budget is the last budget to be implemented fully by the current administration, thus it is a budget of recovery following the COVID-19 pandemic.
“So, the 2022 budget is to stimulate economic recovery. By the passage of the PIB, we are confident that Nigeria will now have more money. Also, I believe the budget should be more. I know you will ask about the issue of borrowing. Nigeria is not the only country that borrows money,” Abbo said.
He added: “I have no problem with borrowing money as far as the money borrowed is used not to pay salaries. Rather it should be for infrastructure development for our children and grand children that will be coming long after we have gone. So America as strong and as big as they are, they borrow.”
Senator Uba Sani (APC, Kaduna Central), chairman of Senate Committee on Banking and other financial institutions, said with the level of socio-economic impact caused by COVID-19, countries are struggling. “We will ensure that all relevant committees do their work as we need to improve oversight. We are here not only to work with the executive but to ensure they do what is right and responsible. Borrowing is not bad in as much as we can build infrastructure,” Sani said.
Similarly, the former governor of Nasarawa State, Sen Abdullahi Adamu (APC Nasarawa West), said that since the budget is the last the present administration will implement fully, the administration will ensure that projects started are completed. “Every country is borrowing. For example, England owes over €3 trillion. So, we must borrow about N6 trillion to fund the budget. Every country is borrowing,” Adamu said.
Also, Chairman of the Senate Committee on Ethics and Privileges, Senator Ayo Akinyelure (PDP Ondo Central), said that since the budget circle has been returned, they will ensure that they passed the budget on time. Therefore, it should be signed before January 2023.
For some members of the House of Representatives, they expressed a similar position with slightly different slants. Muhammed Gudaji Kazaure (APC, Kazaure/Roni/Gwiwa/Yankwashi) said the President must ensure that people who have stolen Nigeria’s funds face the law. “We can implement the N16.39 trillion budget not by borrowing but ensure that we investigate people who have looted our treasury and mop-up this money to fund the budget. Because oil revenue has gone down.”
Kazaure added that “our youths are roaming the street without jobs. Why can’t we clear the forest and empower the youth to go into farming? We collect loans only for people to steal the money and we end up paying debt. My blood pressure went high when I learnt that over N3 trillion would be borrowed to fund the budget.”
Meanwhile, the 2022 Appropriations Bill presented by President Buhari was tagged “Budget of Economic Growth and Sustainability.”
According to Buhari, allocations to Ministries, Departments and Agencies (MDAs) in the N16.39 trillion budget were guided by the strategic objectives in the National Development Plan of 2021-2025.
The plan includes diversifying the economy with robust MSME growth, investing in critical infrastructure, strengthening security and ensuring good governance, enabling a vibrant, educated and healthy populace; reducing poverty; and minimising regional, economic and social disparities.
He added that defence and internal security would continue to be top priorities for his administration. “We remain firmly committed to the security of life, property and investment nationwide. We will continue to ensure that our gallant men and women in the armed forces, police and paramilitary units are properly equipped. And likewise remunerated and well-motivated,” President Buhari said.
On parameters and fiscal assumptions of the 2022 Appropriations Bill, the President explained that same was based on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
He said the oil price benchmark was pegged at 57 US Dollars per barrel while oil production is estimated at 1.88 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day); exchange rate at N410.15 per US Dollar; and projected GDP growth rate at 4.2 per cent and 13 per cent inflation rate.
He stated that based on these fiscal assumptions and parameters, total federally collectable revenue was estimated at N17.70 trillion Naira in 2022.
Buhari further explained that while total federally distributable revenue is estimated at 12.72 trillion Naira, total revenue available to fund the 2022 Federal Budget was estimated at 10.13 trillion Naira, which includes Grants and Aid of 63.38 billion Naira, as well as the revenues of 63 Government-Owned Enterprises.
According to him, oil revenue was projected at 3.16 trillion. At the same time, Non-oil taxes were estimated at 2.13 trillion Naira and FGN Independent revenues were projected at 1.82 trillion Naira. He said out of the total expenditure of N16.39 trillion Naira proposed for the Federal Government in 2022, N768.28 is for Statutory Transfers of 768.28 billion Naira. While N6.83 trillion is for Non-debt Recurrent Costs; and N4.11 trillion for Personnel Costs.
Others are N577.0 billion for Pensions, Gratuities and Retirees’ Benefits; N792.39 for Overheads. Also, N5.35 trillion for Capital Expenditure, including a capital component of statutory transfers; N3.61 trillion for Debt Service; and N292.71 billion Naira for Sinking Fund to retire certain maturing bonds.
However, he emphasized that the expected total fiscal operations of the Federal Government would result in a deficit of 6.26 trillion Naira. An amount representing 3.39 per cent of estimated GDP, which, according to him, is slightly above the 3 per cent threshold set by the Fiscal Responsibility Act 2007.
In addition, the President disclosed that his administration was making efforts to support the realization of fiscal projections. This will be done by reviewing the current tax and fiscal laws to produce a draft Finance Bill 2022. “We intend that once ongoing consultations are completed, the Finance Bill would be submitted to the National Assembly to be considered alongside the 2022 Appropriation Bill”, Buhari stated.
In his remarks, the President of the Senate, Ahmed Lawan, assured Buhari that the National Assembly would start work on the 2022 Appropriation Bill immediately.