FEC, N/Assembly Approve N16.39trn Proposed 2022 Budget

The Federal Executive Council (FEC) and the National Assembly have approved President Muhammadu Buhari’s revised 2022-2024 Medium Term Expenditure Framework of N16.39 trillion.

The government will also borrow N6.258tr to fund the proposed budget deficit.

President Buhari will be presenting the budget to a joint session of the National Assembly on Thursday.

The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, after the Federal Executive Council (FEC) yesterday said the approved 2022 Appropriation Bill is for an aggregate expenditure of N16.39tr.

The minister, while reacting to questions after the FEC meeting presided over by President Muhammadu Buhari, defended the plan for more borrowing.

She said: “Government has been borrowing before this administration and continues to borrow and it is important that we borrow to provide developmental projects in the form of roads, rails, bridges, power and water for sustainable development in this country.

“If we just depend on the revenues that we get, even though our revenues have increased, the operational expenditure of government, including salaries and other overheads, is barely covered or swallowed up by the revenue.

“So, we need to borrow to be able to build these projects that will ensure that we’re able to develop on a sustainable basis,” she noted.

She also disclosed the key assumptions and targets underlying the budget provisions including, oil price – $57 per barrel; oil production – 1.88 mbpd; exchange rate – N410.15/US$; oil revenue – N3.15 trillion and non-oil revenue – N2.13 trillion.

The minister also announced the raise of Nigeria’s crude oil production quota by the organization Petroleum Exporting Countries (OPEC).

She said, “We had suffered some setbacks in terms of level of production, occasioned by the limits that the OPEC set. But thankfully, OPEC has changed our quota and that will also soon ramp up.

“In the event that revenues from oil and gas outperform the budget, there is always the safeguard that the excess goes into the Excess Crude Account.

“If that happens, we have not witnessed that in the past one and a half years because the revenues have been very cyclical.”

At the legislature level, the approval of the revised framework on Wednesday followed the consideration of a report by the Committee on Finance, after Buhari made the request on Tuesday.

Senate, yesterday in its recommendation approved N16.39 trillion from the previous N13.98tr for the year 2022.

It also gave its nod to the retained revenue of N10.3tr and N635.4 billion fiscal deficit.

The Chairman of the Committee, Senator Olamilekan Adeola, said the Gross Revenue Projection decreased by N341.57bn – from N8.870tr to N8.528tr.

Senate President Ahmad Lawan at the session, said the National Assembly would mount pressure on revenue generating agencies to ensure that they remit N1tr revenue annually to enable the federal government fund its budget.

Lawan said this yesterday in his remarks after the chamber approved President Muhammadu Buhari’s submission of the revised 2022-2024 fiscal framework.

The 2021 budget of N13.58 trillion has a fiscal deficit of over N5 trillion. The fiscal deficit in the 2022 budget of N16.3 trillion is projected to increase to 3.42% of GDP.

“I’m sure that those MDAs that remitted N400 billion could possibly have remitted N1tr, if we had pushed harder.

“So, we need to push harder because what this means is a revelation, that many of these MDAs have been cornering funds that ordinarily should have gone to the treasury.”

The House of Representatives also passed the revised MTEF with an aggregate expenditure of N16.39tr from the previous N13.98tr a day after, like the upper chamber did after it was referred to the Committee on Finance led by Rep James Faleke for consideration.